You can also read about Vietnam home insurance compulsory for apartments buildings.
In Vietnam there is no tenant protection for expats looking to rent and apartment or home
Villa and apartment rental is very new in Vietnam; therefore there are no protective laws for tenants; you need to know the rules… or create your own.
There are no Expat tenant laws protecting you when renting a home
Forget whatever you know and think exists in your home country, home rental in Vietnam is based on the written agreement/contract between tenant and landlord/owner.
You will need to check many contracts and write your own or with the protection of your broker agent. Don’t forget to put penalties and indemnity clauses for whatever you are afraid to lose. Even though laws are not protective, Vietnamese hate litigations as a big chunk of money will go to the lawyers or the judges pockets, sometimes well beyond your deposit.
You as a client are considered a short-term tenant whatever the contract says
Renting a home in Vietnam whether an apartment or a villa is a serious matter where 5 things need checking as there are no laws regulating home rentals; all is contractual. The checks involved are:
- 1-month rent/year commission
- 2-month rental deposit (in average),
- the broker agent
- the landlord
- the contract
- the invoicing, residency registration
All can be negotiated but all above can be fakes or rogues. It can be a misunderstanding, ‘lost in translation’ or pure assumption on both parts; better safe than sorry.
The real estate agent want to make a sale for a commission
In Vietnam, there is nothing more rosy than a rental property sold by a broker agent, the commission of 1-month is sometimes equivalent to 6-month yearly salary to them. What would you do if your position was reversed, she is the prospective tenant and you are the salesman -consultant is their wording-.
The landlord want the highest rental for his property
So you think you made a good deal, think again. The landlord, even in supposedly communist country, if not your friend is subject to 3 market forces:
- The market price of your rental income,
- The selling price of a ‘desired property’,
- Any alternative business that could show up with more return
Let’s call it the +30% tolerance zone for the landlord to keep the promise of your contract to the end. You may be replaced at short notice, being paranoid when signing or drafting the contract, is not a bad habit in Vietnam where what is not written and signed is authorized.
You can check the social network of disgruntled Expats to check the various phony reasons given to terminate the rental contract prematurely.
Home rental in Vietnam: broker agents, landlords and Expat risks
As there are no house rental regulations. Legal action will cost you more in time and money If you can ever access a court of law, stating your case in Vietnamese in front of a biased judge; the contract you have signed is your only recourse.
The broker agent
His mission is to gain a commission for matching a client and a property owner 1-month/12-month rental= 8.3% of the year rent. This is 1-month paid upfront -usually from your deposit of 2-months-. Then the mission is accomplished, good bye and good luck. Unless the real estate agent has a corporate long term contract to find apartments for Expat employees, there is no incentive to keep the relationship between tenant and landlord smooth.
The landlord dues
Landlords in Vietnam are supposed to:
- Issue invoice, with VAT (declare and pay their taxes)
- Pay rental income taxes
- register the tenants -including their guests- to the local police
- deal with building and government representatives
- maintain their building/equipment
- protect their assets by insurance (home insurance is not compulsory)
On average, in Vietnam, just 2-of-6 the above duties are performed by the landlords. You want to make sure which one they do and which becomes your risk.
The house tenant risks in Vietnam
Here is a short list of few things Expats miss in their rental contract:
- Sign the 6 or more landlord dues above
- Check the neighborhood: a smart practice is to sleep at the premise during a few days as AirBnB guests: noise, neighbors, flood in rainy season
- When you made home enhancements and decoration price it and agree it is yours
- Use a reputable real estate agent for Expats as they care for their reputation, clientele and peace-of-mind… they try to stay away from rogue landlords
- Breach of contracts before the termination should be listed -or only exclude force majeure as per insurers wordings like fire and earthquakes-
- Your deposit is at stake but also you may be liable for some reconstruction costs
- Speak to the previous tenant, wherever he is to get a feel of your landlord fairness
Protecting yourself with a home insurance
There are mainly 3 things that needs your attention:
- CONTENT INSURANCE: Your belongings and what belongs to the landlord in equipment and decoration. Who will pay for the flat TV or the sound system?
- ENHANCEMENT & CONSTRUCTION: if you made some construction works for interior decoration for a long-term contract, if the landlord repossess, for whatever reason, it is fair that all costs are repaid to you. But also, any building problem should be the landlord problem
- 3rd PARTY LIABILITY: including tenants liability to the landlord is better to have to avoid any excessive financial claim on you. This cover has 2 advantages:
- the insurer will repay fair amount to the landlord or anyone’s belongings/bodily injury caused by you,
- but more importantly in case of litigation, it is the insurer’s lawyers who will be negotiating on your behalf. You can really have peace of mind.
If you decide not to protect yourself with insurance, make sure to have everything in writing and perhaps a disclaimer on the maximum amount the landlord or the apartment building management company will ask you to be responsible for and in which cases.
Over the past years You can send address and contact details of your landlord, in all confidentiality, to get information from the database home@insuranceinasia.com of troublesome owners, as they keep a record of incidents.
Read more on Home or Office insurance in Vietnam.
