How does current Vietnamese law regulate this new type of apartment? Please read the article below.
I. Understanding Lease Contracts for Office-Residence Hybrid Apartments
An office-residence hybrid apartment (also known as Officetel) is a type of real estate that can flexibly combine functions such as working, residing, and vacationing. Accordingly, 'Officetel' is an abbreviation of 'Office' and 'Hotel'.
Currently, the Officetel model is no longer entirely new, both globally and in Vietnam. Notably, this model is projected to become a future trend in real estate investment, targeted by major players. In the context of rising demand for office space, its excellent adaptability for busy individuals in the technology era, and particularly its ability to save rental costs under the influence of the US-China trade war, are entirely understandable.
Following this trend, an increasing number of officetel lease contracts are being signed. However, the current status of lease contracts for office-residence hybrid apartments in Vietnam presents both positive and negative aspects:
- Positive aspects: Lease contracts for office-residence hybrid apartments are specifically and clearly regulated by law, creating a solid foundation for the parties involved in the transaction. This not only helps ensure the legality of the contract but also provides a legal basis for resolving any disputes that may arise during its execution. Nowadays, these contracts are increasingly refined in content, including comprehensive basic and detailed clauses. As a result, the relevant parties can easily have a clear understanding of their rights and obligations.
- Negative aspects: Despite significant progress, lease contracts for office-residence hybrid apartments still have negative points. Some current contracts are not yet fully and rigorously drafted, which can lead to unwelcome disputes when specific situations arise. Furthermore, some contracts contain unclear provisions, easily causing misunderstandings for the parties involved in the transaction. Ambiguity in clauses can create arguments over the rights and obligations of the parties, increasing the risk of conflict.
II. Legal Provisions on Lease Contracts for Office-Residence Hybrid Apartments
1. What is a Lease Contract for an Office-Residence Hybrid Apartment?
A lease contract for an office-residence hybrid apartment is a type of real estate service contract, whereby the lessor undertakes to provide the lessee with the right to use an office-residence hybrid apartment for a specified period and under agreed-upon conditions.
2. Essential Contents of a Lease Contract for an Office-Residence Hybrid Apartment
To ensure a complete legal basis and protect the legitimate rights and interests of the parties, a lease contract for an office-residence hybrid apartment must include the following main contents:
- Names and addresses of the parties;
- Information about the real estate;
- Lease price;
- Payment method and term;
- Term for delivery and handover of the real estate and accompanying documents;
- Warranty;
- Rights and obligations of the parties;
- Liability for breach of contract;
- Penalties for contract violation;
- Cases of contract termination, cancellation, and remedies;
- Dispute resolution;
- Effective date of the contract.
3. Can a Private Enterprise be a Party to an Office-Residence Hybrid Apartment Lease Contract?
Pursuant to Article 188 of the Law on Enterprises 2020 (*Luật Doanh nghiệp năm 2020*), a private enterprise is a type of enterprise. Therefore, like other business enterprises, a private enterprise is an organization with its own name recognized by the state through the issuance of a Certificate of Enterprise Registration; the purpose of a private enterprise is to regularly and continuously carry out profit-seeking business activities. Due to its nature as an organization, a private enterprise can still be a party to an office-residence hybrid apartment lease contract.
III. Common Questions Regarding Lease Contracts for Office-Residence Hybrid Apartments
1. When is a Lease Contract for an Office-Residence Hybrid Apartment Invalid?
According to current Vietnamese law, a lease contract for an office-residence hybrid apartment is invalid when:
- It violates a legal prohibition or is contrary to social ethics;
- It is simulated (a sham contract);
- It is established or performed by a minor, a person who has lost civil act capacity, a person with difficulties in awareness and control of their acts, or a person with limited civil act capacity;
- It is due to mistake (error);
- It is due to deception, threat, or coercion;
- It is established by a person who is unable to perceive or control their acts;
- It fails to comply with regulations on form;
- Its object cannot be performed (impossible object);
2. Should Penalties for Violations be Stipulated in Office-Residence Hybrid Apartment Lease Contracts?
Stipulating penalties for violations in office-residence hybrid apartment lease contracts is necessary to protect the rights of the participating parties. Establishing forms of penalties encourages compliance with contractual obligations, minimizes disputes, and creates fairness in the relationship between the parties. Therefore, provisions for penalties for violations should be included in office-residence hybrid apartment lease contracts.
3. When Can a Lease Contract for an Office-Residence Hybrid Apartment Be Unilaterally Terminated?
Pursuant to Clause 2, Article 172 of the Law on Housing 2023 (*Luật Nhà ở năm 2023*), the lessor has the right to unilaterally terminate the contract and recover the leased apartment in one of the following cases:
- The lessor leases an apartment that is public property, social housing, housing for the people's armed forces, or worker accommodation in industrial zones without proper authority, to the wrong subjects, or without meeting the conditions stipulated by housing law;
- The lessee fails to pay the full rent as agreed in the contract for 03 months or more without a reason agreed upon in the contract;
- The lessee uses the apartment for purposes other than those agreed upon in the contract;
- The lessee arbitrarily drills, expands, renovates, or demolishes the leased apartment;
- The lessee transfers, lends, or subleases the leased apartment without the lessor's consent;
- The lessee causes public disorder, environmental unsanitariness, or seriously affects the lives of neighbors, and despite being issued a written record three times by the lessor or the head of the residential group, village chief, hamlet chief, etc., fails to rectify the situation;
- If the lessor renovates the apartment with the lessee's consent, the lessor has the right to adjust the apartment's rental price if the remaining lease term is one-third or less of the total contract term. The new rental price shall be agreed upon by the parties; if an agreement cannot be reached, the lessor has the right to unilaterally terminate the apartment lease contract and must compensate the lessee in accordance with legal provisions.
Pursuant to Clause 3, Article 172 of the Law on Housing 2023 (*Luật Nhà ở năm 2023*), the lessee has the right to unilaterally terminate the lease contract in one of the following cases:
- The lessor fails to repair the apartment when it suffers serious damage;
- The lessor increases the rent unreasonably or increases the rent without prior notice to the lessee as agreed in the contract;
- When the right to use the apartment is restricted due to the interests of a third party.
IV. Legal Consulting Services Related to Lease Contracts for Office-Residence Hybrid Apartments
At NPLAW, our team of professional lawyers will provide clients with the highest quality legal consulting services related to lease contracts for office-residence hybrid apartments. Should you have any related questions or require further clarification, please contact NPLAW using the following contact information:
