My landlord wants to break the lease!

Q: I currently have a verbal contract with my landlord that I’d be renting my apartment for one year. I paid 4 months in advance (and I have a receipt), but recently, she told me that she wants to take it back for someone else. Other than getting back my deposit, am I entitled to any other compensation for her breaking the contract early?

In Vietnam, civil transactions between individuals and organizations are governed by the Vietnamese Civil Code and a lease contract is no exception.

One of the fundamental principles of the Vietnamese civil law, underlying any civil transaction, is the liberty given to the parties to decide on the substance and the form of their contracts. As an exception, the law requires certain specific transactions to be in writing as a condition of their validity and sometimes to be subject to formalities such as notarization, certification and/or registration with an authority or agency.

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A lease for a residential house and/or apartment is one of those contracts that must be made in writing and, if the term of the lease is at least six months, must be notarized or certified. Consequently, your verbal lease contract with your landlord with a term of one year is in principle not valid.

There are ways to correct the lack of compliance with requirements applicable to the form of a contract: upon receipt of a request from you and/or the landlord, a court may provide the parties with a period of time to conduct the required formalities.

But as of now, and until you proceed with a court and comply with the formal requirements applicable to a lease contract, there is actually no lease contract between you and your landlord, but only a nonbinding verbal arrangement.

Therefore, the landlord may ask you to return the apartment and you may not rely on your oral arrangement as a binding contract to challenge the validity of that request. As another consequence of the lack of validity of your lease contract, you may not ask for damages for unlawful termination of the contract by the landlord.

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Similarly with respect to the deposit, and from a strict legal perspective, you may not rely on your oral arrangement to request its reimbursement. But don’t worry! Vietnamese law provides that when a contract is invalid, the parties must restore everything to its original state and each party must return to each other party what it has received. Consequently, there is a legal ground for you to rely on in case your landlord hesitates before giving you back your deposit.

However, do not place too much hope in your chance of success if you plan on using that legal ground to request the reimbursement of the rent since you moved in. There is a big chance that a judge will not rule in your favor since it is not possible for you to give back to the landlord
the use of the apartment for the time you have already lived in it.

If you have any legal questions you want answered, send them to legal@oivietnam.com.

Bio: A member of the Paris Bar, Hadrien Wolff has been practicing law in Vietnam for six years, currently as a partner of Audier & Partners. He specializes in banking and corporate law, regularly advising major foreign banks and assisting foreign investors in setting up joint venture companies with Vietnamese partners in sensitive sectors such as media, power and natural resources

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