Compensation for early termination of lease

1. Do I need to give notice to terminate a lease early?

During the rental period, although the parties are not allowed to terminate the rental contract before the term, there are still some exceptions as follows:

- Tenant: If the lessor commits the following acts, the lessee may unilaterally terminate the lease contract: Failure to repair the house when it is seriously damaged; unreasonable price increases or failure to notify in advance as agreed...

- Landlord: The tenant has committed acts such as not paying rent for 03 months or more; using the rented house for the wrong purpose; arbitrarily breaking, expanding, or renovating the rented house; lending or subleasing without the lessor's consent; causing disorder and having been fined 03 times without remedying...

However, for whatever reason and whether it is the tenant or the landlord, it is still necessary to meet the notice period prescribed in Clause 4, Article 132 of the 2014 Housing Law:

The party unilaterally terminating the housing lease contract must notify the other party at least 30 days in advance, unless otherwise agreed by the parties; if the provisions of this clause are violated and cause damage, compensation must be paid in accordance with the provisions of law.

Thus, when wanting to terminate a rental contract early, the following conditions must be met:

- Follow the agreement of the parties if the parties have an agreement on termination of the lease contract.

2. Do I have to pay a deposit when terminating a rental contract early?

Renting a house is not a case where a deposit is required because this is only an act to ensure the performance of the rental contract.

At the same time, according to Clause 2, Article 328 of the 2015 Civil Code, when the lease contract is executed, the deposit will be returned to the tenant or deducted from the rent. However, in reality, in many cases, the deposit is retained by the lessor, waiting until the tenant terminates the lease before returning it to the lessee.

Therefore, to determine whether a deposit must be paid when terminating a lease early, both parties need to based on previous agreement stated in the lease agreement and may be specified in some In the following cases the deposit may not be returned.:

- Neither party paid a deposit before signing the rental contract.

- Both parties agree not to charge a deposit penalty if one of the two parties terminates the lease contract early.

- The deposit is deducted from the rent the following month when the tenant moves into the rented house.

- Both parties are at fault or there is a force majeure event, objective obstacle... as prescribed in Resolution 01/2003/NQ-HDTP...

What compensation is given when terminating a lease early?

As stipulated in Clause 4, Article 132 of the Housing Law, if either party violates the regulations on prior notice of termination of the lease contract and causes damage, compensation must be paid.

However, first of all, the parties can agree on the level of compensation, form (money, goods, work performance), method (one time, many times). If an agreement cannot be reached, the damaged party can file a lawsuit in court to request compensation.

About the level of compensation for damages, the following types of damage can be identified:

- Property damage: Benefits associated with the use and exploitation of the rented house are lost or reduced; costs to remedy damages caused by the rental house being claimed early...

- Health damage: Actual income lost/reduced due to early repossession of rented house. If not determined, then calculated based on the average income of similar type of workers...