In daily life, we often meet rental deposit transactions between the tenant and the landlord with the aim of ensuring that the tenant will fulfill the rental commitment with the landlord. Currently, the demand for renting houses in Vietnam is increasing, but not all tenants and landlords really understand the basic legal issues of rental deposit transactions, which may lead to disputes in the future. Therefore, in this article, TNTP will answer the things you need to know about the Rental Deposit Contract to help readers refer to and better understand this civil transaction.
1. What is a Rental Deposit Contract?
• According to Clause 1, Article 328 of the Civil Code 2015, regulations on Deposits, accordingly, Deposit is an act whereby one party (hereinafter referred to as the depositor) transfers to another party (hereinafter referred to as the depositary) a sum of money or precious metals, gemstones or other valuable things (hereinafter referred to as the deposited property) for a period of time as security for the entering into or performance of a contract.
In which:
(i) Precious metals include gold, silver, platinum and other precious metals;
(ii) Precious stones include diamonds, rubies, emeralds, sapphires, pearls and other precious stones.
• To put it simple, Deposit is a term used to refer to the act of one party using their property to give to the other party for the purpose of “pledge” and as a basis for establishing other related civil relationships in the future.
Thus, the Rental Deposit Contract is a written agreement between the parties regarding the tenant delivering the property to the landlord, usually a sum of money to bind the parties to perform the contract.
2. Required content of the Rental Deposit Contract
• The law does not specifically stipulate what provisions are required for a rental deposit contract. However, according to Article 398 of the Civil Code 2015, which stipulates the content of a civil contract, the parties have the right to agree on the content of the contract. Accordingly, the contract in general may have the following provisions:
– Subject matter of the contract;
– Quantity and quality;
– Price and method of payment;
– Time limit, place and method of performing the contract;
– Rights and obligations of the parties;
– Liability for breach of contract;
– Methods of settlement of disputes.
• Compared with the above provisions, the parties may agree to modify and supplement the terms in the contract to suit the actual rental deposit transaction. The parties may consider and stipulate the following contents in the contract before conducting the rental deposit transaction, including:
– Information of the parties involved in the rental deposit contract;
– Information about the house for rent;
– Deposit asset and deposit amount;
– Deposit period and rental period;
– Rental price, term and method of rent payment;
– Methods of dispute settlement.
3. Handling deposits in case of disputes or breach of contract
• Pursuant to Clause 2, Article 328 of the Civil Code 2015, it is stipulated that:
“Upon a contract being entered into or performed, any deposited property shall be returned to the depositor, or deducted from the amount of an obligation to pay money. If the depositor refuses to enter into or perform the contract, the deposited property shall belong to the depositary. If the depositary refuses to enter into or perform the contract, it must return the deposited property and pay an amount equivalent to the value of the deposited property to the depositor, unless otherwise agreed.”
It can be understood that in the case of a deposit to ensure the conclusion and performance of a contract, if a party violates the contract leading to the contract not being performed, based on whether the violating party is the depositor or depositary, the remedy can be different, from losing the deposited property if the depositor refuses to enter into the contract, or return the deposit received and an amount equivalent to the value of the deposit to the violated party if the depositary refuses to enter into the contract.
• An example of the above regulation is as follows: A wants to rent a house from B and the parties agree to sign a House Rental Deposit Contract. The rental price is 10,000,000 VND/month and the parties agree that A will deposit half of the first three months’ rent, which is 15,000,000 VND, and the remaining amount will be paid by A to B on the day B hand over the house to A. A agrees and has paid a deposit of 15,000,000 VND to B. On the day of delivering the house, B was not present at the rental location and A contacted B many times but B said he had arrived at the rental location, but A was not present. Many times, B made excuses to not meet A to hand over the house.
In the above example, it can be seen that B is the party receiving the deposit but refuses to perform the contract (shown by always avoiding and giving reasons for not meeting A). According to the law, B is obliged to pay A the deposit of 15,000,000 VND received and an amount equivalent to the value of 15,000,000 VND, unless A and B have another agreement.
Above is TNTP’s article on “Things you need to know about house rental deposit contracts” that we would like to send to our readers. Hopefully the article is useful for those who are interested in this issue.
Sincerely,
