Summary of Notable Judgments on House Lease Contract Disputes in Vietnam

1) Judgment No. 153/2019/DS-PT dated August 29, 2019, on the request for payment of rent, security deposit, and penalties by the High People's Court in Da Nang.

a) Case Content:

Mr. Y and Mr. T signed a House Lease Contract on January 27, 2018; the leased asset is real estate located at No. 42 P Street, N District; the rent is 2,400 USD/month; the term is 5 years. Mr. Y paid a total of 21,600 USD (including 6 months of rent and 3 months of deposit). Upon handover, the house and furniture were completely damaged and unusable. Mr. Y spent 30 million VND on cleaning, but on March 11, 2018, Mr. T arbitrarily locked the door, cut off electricity and water, and unilaterally terminated the contract without notice.

Legal Petition: Mr. Y requested the cancellation of the signed house lease contract, and requested Mr. T to refund the deposit, the prepaid rent, and pay a contract violation penalty (equivalent to 3 months' rent). The total compensation requested is 28,800 USD, converted according to the bank exchange rate to 667,008,000 VND.

b) Findings of the Appellate Court:

[1.1] Regarding the plaintiff's request to cancel the lease contract, refund the security deposit, and prepaid rent; it is found that: The house lease contract was established on January 27, 2018, between Mr. Y and Mr. Tran Van T, specifying the rent in USD, and in practice, the parties also made payments in USD. This transaction was carried out within the territory of Vietnam, therefore, it is governed by the provisions of Vietnamese law. Pursuant to Article 22 of the 2005 Ordinance on Foreign Exchange and Articles 3 and 4 of Circular No. 32/2013/TT-NHNN dated December 26, 2013, of the State Bank of Vietnam, which guides the implementation of regulations restricting the use of foreign exchange within Vietnam, this contract violates a legal prohibition. Therefore, the First-instance Court's decision based on Point c, Clause 1, Article 117; and Article 131 of the 2015 Civil Code, declaring the aforementioned lease contract void and forcing the parties to restore the original state and return what they received, is in accordance with the law. Thus, there are no grounds to accept Mr. T's appeal on this content.

[1.2] Regarding the counterclaim of the defendant, Mr. Tran Van T: Mr. T requested Mr. Y to compensate for property damage caused by Mr. Y's arbitrary dismantling and selling, amounting to 500,325,000 VND. However, throughout the proceedings at the First-instance Court as well as the appellate stage, Mr. T failed to provide evidence of the handover of the aforementioned assets to the tenant; besides the lease contract, there was no contract appendix or asset handover minutes to prove the assets and their value for the compensation claim. Meanwhile, the plaintiff did not accept Mr. T's request and claimed that upon receiving the house, all equipment was completely damaged and had no utility value. Therefore, the First-instance Court's rejection of Mr. T's counterclaim is grounded, and there is no basis to accept Mr. T's appeal.

c) Ruling of the Appellate Court:

Reject the appeal of Mr. Tran Van T; uphold the first-instance judgment. Pursuant to Articles 117, 122, 123, and 407 of the Civil Code; Article 22 of the 2005 Ordinance on Foreign Currency; Articles 3 and 4 of Circular No. 32/2013/TT-NHNN; Article 244 of the Civil Procedure Code; Resolution 326 on court fees and charges.

Decision: Terminate the plaintiff Mr. Y's request to force the defendant Mr. Tran Van T to return 30,000,000 VND spent on cleaning and dismantling damaged equipment. Partially accept Mr. Y's petition regarding the "Request to cancel the lease contract; Request for payment of rent and deposit." Declare the house lease contract signed on January 27, 2018, between Mr. Y and Mr. Tran Van T void. Compel Mr. Tran Van T to return the amount of 500,256,000 VND to Mr. Y. Reject the plaintiff's request regarding a contract penalty of 166,752,000 VND against Mr. Tran Van T. Reject the defendant's counterclaim to force the plaintiff to compensate for property value amounting to 500,325,000 VND.

2) Judgment No. 1635/2020/DS-PT dated September 28, 2020, regarding a House Lease Contract dispute by the People's Court of Ho Chi Minh City.

a) Case Content:

According to the lease contract dated November 10, 2016, and its appendices (No. 01, 02, 03, 04), between the plaintiff (tenant) and the defendant (landlord) for the house at address X, Binh An Ward, District 2, Ho Chi Minh City, the lease term ended on March 31, 2018. After this date, neither party wished to renew. The tenant (plaintiff) paid the rent in full until March 31, 2018. The landlord (defendant) was to return the deposit of 102,285,000 VND. On April 1, 2018, the plaintiff handed over the house. However, to date, the defendant has not returned the deposit. Legal Petition: The tenant requests the refund of the security deposit.

b) Findings of the Appellate Court: 

[1] Regarding the plaintiff's request for the deposit of 102,285,000 VND: According to the contract, the deposit of 102,285,000 VND paid to Ms. H1 (transaction document of Vietcombank East Saigon to Ms. H1’s account on December 2, 2016) shall be returned upon contract liquidation, after deducting any outstanding expenses. The "accrued expenses" accepted are: Electricity and water: 2,280,000 VND (incurred by the plaintiff). Cost of moving the wooden kitchen from the 3rd floor to the ground floor: The contract required the tenant to return the kitchen cabinets to their original position. At the trial, the parties agreed on a cost of 25,000,000 VND. Thus, the court accepts the plaintiff's request for the deposit after deducting reasonable costs, totaling 75,005,000 VND.

[2] Regarding the defendant's counterclaim: There are grounds to accept 27,280,000 VND for utilities and kitchen relocation. Regarding rent from April 1, 2018, to May 11, 2018: The lease ended on March 31, 2018. The tenant had a handover minutes on April 1, 2018, and sent notices expressing the intent to return the house. Any property damage should be settled via compensation liability, not as a reason for the landlord to refuse to receive the house and demand rent for that period. Therefore, this claim is groundless. Regarding air conditioners (LG, Reetech, Daikin): There was no evidence that these units were part of the handed-over assets or belonged to the defendant. Therefore, the court accepts 27,280,000 VND of the counterclaim and rejects the remaining 102,370,000 VND.

c) Ruling of the Appellate Court:

- Compel Ms. Phan Thi Kim H1 to pay Company X the remaining deposit of 75,005,000 VND. Compel Company X to pay Ms. Phan Thi Kim H1 27,280,000 VND.

- Reject the defendant's counterclaim regarding rent (78,580,000 VND) and air conditioner values (23,790,000 VND).

3) Judgment No. 722/2018/DSST dated June 7, 2018, regarding a House Lease Contract dispute by the People's Court of Ho Chi Minh City.

a) Case Content:

On September 3, 2014, A Packaging Production Co., Ltd. signed a contract to lease apartment C1-2202 at address I, Ward O, District P, HCM City, from Mr. Nguyen Phuong T for an expert's residence. Term: 1 year (Sept 8, 2014 – Sept 8, 2015). Rent: 25,560,000 VND/month. Deposit: 51,120,000 VND (2 months' rent), to be returned upon termination. The company fulfilled all payments. However, after the contract ended, Mr. T did not return the deposit despite multiple requests via phone and email. Legal Petition: Company A requests the Court to compel Mr. T to refund the 51,120,000 VND deposit in one lump sum.

b) Findings of the First-instance Court:

[1] Based on the contract dated Sept 3, 2014, the lease was for one year with a deposit of 51,120,000 VND.

[2] Based on testimonies and bank transfer slips, the plaintiff paid the deposit and all rent until the end of the term.

[3] According to Article 8 of the contract: "If the tenant terminates the contract in accordance with clauses 7.1 and 7.2, the landlord shall refund the prepaid rent for remaining days and the deposit within 02 weeks... after the tenant has paid all utility costs."

[4] Thus, there are grounds to accept the plaintiff's petition.

c) Decision of the First-instance Court:

- Accept the petition of A Packaging Production Co., Ltd: Compel Mr. Nguyen Phuong T to refund the deposit of 51,120,000 VND to the Company.

- Payment term: One-time payment immediately after the judgment takes legal effect.

- Late payment interest shall apply as per Clause 2, Article 468 of the 2015 Civil Code if the defendant fails to execute the judgment.