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Vietnam office lease contract terms to check first
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Vietnam office lease contract terms matter more than the rent figure, because the Civil Code of 2015 leaves most of the deal to what you write. The code has been in force since 1 January 2017. It sets a few firm rules and many defaults. Read six things before you sign: price, term, deposit, rent dates, repairs and handback.
Source: Civil Code (Law No. 91/2015/QH13), effective 1 January 2017, Articles 472 to 482.
Start with the law that applies
Article 472 defines a lease as an agreement where the lessor hands over property for a set time and the lessee pays rent. It adds that leases of houses, and of premises for other uses, follow the Civil Code, the Law on Housing and other related laws. So the Civil Code is your base, and other laws can add to it.
Ask your adviser which other rules touch your building and your use of it. An office in a mixed-use block may have extra rules in the building's own regulations. Put the contract in writing and have a Vietnamese version, so that every clause can be checked against local law.
Source: Civil Code (Law No. 91/2015/QH13), effective 1 January 2017, Article 472.
Price and term
Article 473 says the parties agree the price, or a third person sets it if both sides ask. If the contract has no price, or an unclear one, the market price at the place and time of signing applies. Do not rely on that fallback. Write the rent, the unit it is counted in, and any service charge or management fee as separate lines.
Article 474 says the parties agree the term. If they do not, the purpose of the lease sets it. If neither works, either side may end the contract at any time with reasonable notice. That is a weak position for a tenant who has paid for a fit-out. State a fixed term, say how and when you may renew, and say what notice each side must give.
The code has no renewal right of its own, so a renewal option exists only if you write it. Set the rent rule for the renewal now, such as a fixed rise or a cap, so that a later talk does not start from zero.
Source: Civil Code (Law No. 91/2015/QH13), effective 1 January 2017, Articles 473 and 474.
Deposit
Article 328 covers a deposit paid to secure a contract. If the contract is made and performed, the deposit is returned or counted against payment. If the depositor backs out, the receiver keeps it. If the receiver backs out, the receiver returns the deposit and pays an equal sum on top, unless the parties agree otherwise.
Check which kind of money you are handing over. A deposit paid before signing, to hold the space, follows that rule. A security deposit held during the lease should have its own clause. Say how many months it covers, where it is held, what may be deducted, and how many days after handback it must be returned.
Article 329 also covers a deposit for the return of leased movable property, such as furniture, which is given back once the property is returned and the rent is paid.
Source: Civil Code (Law No. 91/2015/QH13), effective 1 January 2017, Articles 328 and 329.
Rent, currency and payment dates
Article 481 says the tenant must pay the full rent on the agreed date. With no agreed date, local custom decides. If that cannot be found, rent is due when the property is returned. Your contract should name the day of each month or quarter, the bank account, and any late fee.
The same article lets the lessor end the contract if the tenant misses three rent periods in a row, unless the parties agreed otherwise. You can negotiate a longer cure period. Also name the currency of the rent in the contract. Ask your adviser how the rules on foreign currency apply to your lease before you agree a figure in dollars.
Source: Civil Code (Law No. 91/2015/QH13), effective 1 January 2017, Article 481.
Repairs, use and subletting
Under Article 477 the lessor must keep the premises in the agreed condition for the whole lease and must repair faults, except small damage that custom leaves to the tenant. If the lessor is told and does not repair in good time, the tenant may repair at reasonable cost and ask for a refund. Article 479 makes the tenant responsible for care, upkeep and small repairs, but not for natural wear.
Article 480 requires the tenant to use the space for the agreed purpose. If you use it for something else, the lessor may end the contract. So describe the use broadly: office, meeting rooms, storage, training. Article 475 allows subletting only if the lessor agrees, so ask now if you may share space with a partner or a sister company.
Article 479 also says the tenant may improve the premises with the lessor's consent and ask for reasonable costs. Get that consent in writing before any fit-out.
Source: Civil Code (Law No. 91/2015/QH13), effective 1 January 2017, Articles 475, 477, 479 and 480.
Handback and what to do before signing
Article 482 says the tenant returns the premises in the state received, apart from natural wear, or in the state agreed. If value has fallen, the lessor may claim damages. If the tenant is late, the lessor may demand the space back, rent for the late period and damages, and any agreed penalty applies. The tenant also carries the risk of loss during the delay.
Before you sign, do these five things.
- Attach a photo and condition list of the space on the day you take it.
- Agree in writing who must remove fit-out at the end.
- Set the notice periods for renewal and for early exit.
- Check that the lessor has the right to lease the space, and ask to see the papers.
- Have a qualified adviser read the Vietnamese text.
This article is general information, not legal advice. Before you sign an office lease, have a Vietnam-licensed lawyer read the exact clauses, since rules on leases can shift.
Source: Civil Code (Law No. 91/2015/QH13), effective 1 January 2017, Article 482.
Sources
- Civil Code, Law No. 91/2015/QH13, National Assembly of Vietnam, Articles 328, 329 and 472 to 482 (Vietnamese text as published in 2016, read at https://web.archive.org/web/20160210232645/http://thuvienphapluat.vn/van-ban/Quyen-dan-su/Bo-luat-dan-su-2015-296215.aspx).