Life in Hanoi, the capital of Vietnam, is fast-changing every day. The more it develops, the more foreigners it attracts, which is clearly an opportunity for the real estate market. But what does an expatriate need to pay attention to before jumping in the Hanoi Real Estate market to find a temporary home? It’s a security deposit.
Security deposit is the amount agreed by the parties to ensure the performance of the lease. Whether it is a short-term or long-term tenancy agreement, the parties need to be aware of the deposit terms stated in the lease to avoid losing the deposit unreasonably. The deposit will ensure that the lessor or landlord will be compensated in case the tenant breaks the contract ahead of time and that the lessee will have temporary ownership towards the property throughout the agreed amount of time.
Although this deposit is to ensure the rights and benefit of both parties, the tenant is usually more likely to lose this deposit because this is the amount the tenant submits to the lessor to secure the tenancy. This clause is closely related to the term of the tenancy as well as the lessee’s responsibilities in the contract. Therefore, the tenant needs to pay attention to these contents to avoid damage when signing a lease.
Note that sometimes the landlords do not request deposit, which means you do not have to have this stated in the contract. But if there is a deposit amount (which is usually the case), read through the clauses carefully to make sure you are not on disadvantaged side and if needed, bring a friend that has some knowledge on tenancy law.
Deposit rates: When renting, tenants must bring money to deposit a mandatory amount. Usually, the deposit will be equal to 1 month’s rent for medium and large apartments for rent in vietnam with basic furniture together with a two or three-month pre-payment in advance. For a small room, the deposit ranges from 500,000 to 800,000 VND. The legal deposit rates are not specified, usually agreed by the parties. Therefore, the tenant needs to negotiate a deposit with the lessor.
In addition, the parties also need to agree on the time of delivery of the deposit and make a record of deposit and delivery to avoid later disputes. The tenant will lose the amount when the tenant decides not to continue renting or the check-out time is before the lease period in the contract. The lender will keep the deposit as compensation for ahead-of-time cancellation of the contract. In contrary, the landlord compensates the deposit when he does not want to continue renting and asking the tenant to return the room, so make sure there are provisions that will have the landlord compensate twice the amount of the deposit if he revokes the house before the term in the contract.
On top of the deposit, the tenant needs to examine the terms on other expenses such as electricity, water, clean-up, internet, etc. Everything should be clear and transparent in the contract to ensure you are not taken advantage of.
A deposit is needed as a legal tool in house renting. As long as you pay attention to every term in the contract and your landlord is negotiable in case of disagreement, renting in Hanoi will not be a hassle at all.