Legal advice for landlords who rent houses to foreigners
27/08/2019 17:45 | Source:
By cause of the rising number of expats in Vietnam, the lease market for foreigners has significantly expanded in recent years. However, foreign tenants and their landlords should consider the following legal advice to avoid unwanted risk.

1. Requirements related to foreigners in renting houses

According to Article 119 of the 2014 Law on Housing of Vietnam, parties involved in housing transactions with foreigners must satisfy the following conditions:

Firstly, the entity who lease housing must be the homeowner, or the person permitted and authorized by the homeowner to enter into housing as prescribed in this Law and law on civil. If the entity is a person, he must have the full civil capacity to enter into transactions in housing as prescribed in law on civil; if the entity is an organization, it must have legal personality, except for the organization giving the house of gratitude.

Secondly, if the entity who rents housing is a foreign person or an oversea Vietnamese, he/she must have full civil capacity to enter into transactions in housing as prescribed in Vietnamese law, qualify for the homeownership in Vietnam as prescribed in this Law and he/she is not required to register temporary or permanent residence in the place where the house under transactions is located.

2. Requirements applied to rental houses

Clause 1 and 3, Article 118 of the 2014 Law on Housing stipulates that any house regarding transactions in housing sale, lease purchase, gifting, mortgage, or capital contribution shall meet the following requirements: Having a Certificate of Ownership; not subject to dispute, complaint, or proceedings for homeownership; and satisfy requirements pertaining to quality, safety regarding the lessee, electricity system, water supply and drainage, hygiene and environment.

Legal advice for landlords who rent houses to foreigners
Housing transaction related to foreigners must meet specific requirements and procedures

For landlords, as foreign tenants commonly have higher living standard and income, they have more requirements on housing quality. Foreign tenants tend to lease high-end housing products such as luxury condos, fully furnished houses or villas, which mostly located in the business office area. Thus, landlords should improve house quality, design, and utility if they want to attract foreign tenants.

3. Rental procedures

If the lessee is Vietnamese and the rental property has less than 5 rooms, the lessor only needs to report the temporary residence to the competent agency without business registration. On the other hand, the lessor must have the business registered to rent a room for the foreign lessee. Accordingly, you must go to the People's Committee of where you have a rental house to register, and when you register, you must bring related documents to prove the owner of the rental house and your identity card.

Next, you must pay the license tax and declare your tax code so that the related authority. When the lessor and lessee put an agreement to the transaction, a contract must be made with clear statements of two parties’ information, rental house status, rental price, payment method, and other commitments. 

As the contract was signed, the lessor must complete the temporary residence registration for foreign lessee at the competent agency. The last step is to pay personal tax registration for foreign lessee accordingly.

Legal advice for renting house in Vietnam
The lessor must report the temporary residence for the foreign lessee

4. How to avoid risk

Like other types of businesses, leasing houses, especially for foreign tenants, contain risks. To avoid risks and unwanted losses, the lessor must clearly state the usage purpose, the number of tenants, and other details in the contract. 

The lessor should ensure the coherence of the contract, especially high-value contracts, to minimize the risk. It recommends to has a legal consultation from lawyers or ask advice from experienced lessors.