On 15/9, the People's Court of District 1 - Ho Chi Minh City heard a house rental contract dispute between a limited liability company specializing in hospitality services (the plaintiff) and Mr. Viet, 43, the owner of a 9-story house on Thai Van Lung street in downtown Saigon (the defendant).
According to court documents, in late 2022, the company signed a contract to lease the house for 5,550 USD per month for six years, until 2/2029. They paid a deposit of over 394 million VND. Both parties agreed to a 45-day period for the company to renovate and apply for a business license, during which no rent would be charged.
The company leased the house to operate hospitality services, office rentals, and food and beverage businesses. During its operation, the company subleased a portion of the premises to two individuals to open a bar and operate food and beverage services.
Halting rent payments due to landlord's alleged failure to complete construction permits
As per the contract, Mr. Viet was obligated to complete the "hoan cong" procedure (final construction inspection and certification). If this procedure was not completed, and competent authorities suspended operations due to the building lacking a full fire prevention and fighting system, both parties would discuss the best resolution for the tenant. The contract also stipulated that any party wishing to terminate early must provide three months' written notice.
In court, the plaintiff stated they had paid approximately 2.3 billion VND in rent until the end of 5/2024, then ceased payments due to business losses. The company also claimed Mr. Viet failed to complete the "hoan cong" procedure because the building exceeded the permitted number of floors, preventing them from fully utilizing the space and causing damages.
The plaintiff testified that after signing the contract, they learned Mr. Viet had been gifted the house, while his father was the person named on the construction permit.
Alleging that the landlord violated contractual obligations and real estate business regulations, the company requested the court declare the contract void. They demanded Mr. Viet refund the rent received, the deposit, employee salaries paid, over 3 billion VND in estimated revenue from room rental operations, and over 800 million VND in investment costs for the house.
According to the company, after the dispute arose, they requested the two individuals who subleased a portion of the house to cease their contracts. Therefore, the plaintiff also demanded the landlord compensate them for a deposit of over 200 million VND and violation penalties owed to these two individuals. The total amount the company sought for reimbursement and compensation exceeded 8.9 billion VND.
Landlord files counterclaim, demanding unpaid rent
Mr. Viet disagreed with these demands and filed a counterclaim, requesting the contract be terminated. He sought to compel the company to pay outstanding rent until 7/2026, late payment interest, and any associated taxes he had to pay on their behalf.
According to the defendant, the company stopped paying rent from 6/2024 but did not hand over the house. By 7/2026, after more than two years without receiving rent, Mr. Viet repossessed the house with the witnesses of the neighborhood group and a bailiff.
Mr. Viet stated that before signing the contract, he provided ownership documents, the construction permit, and information that the house was undergoing the "hoan cong" procedure. Both parties had also anticipated the scenario where the project might not be completed and operations suspended, agreeing to discuss solutions. However, he never received any written notice from the company regarding a contract suspension.
The defendant argued that "hoan cong" is an administrative procedure, not a condition that invalidates the contract. The company was also accused of unilaterally subleasing the house to a third party and making numerous renovations without the landlord's consent.
Company ordered to pay 5.6 billion VND
After reviewing the case files and deliberating, the Judicial Panel rejected all of the company's claims and accepted Mr. Viet's counterclaim, ordering the plaintiff to pay the landlord a total of 5.6 billion VND. The company was also required to compensate over 300 million VND in deposits and violation penalties to the two individuals who had subleased a portion of the house.
According to the Judicial Panel, when signing the contract, the tenant directly inspected the property, was aware of the unauthorized construction, and knew it had previously faced administrative penalties. The landlord's failure to perform certain contractual obligations did not constitute a violation of prohibited legal provisions that would warrant declaring the contract void.
The court did not accept the plaintiff's demands for reimbursement of rent, investment costs, salaries, and estimated revenue due to insufficient supporting documentation. The company also failed to prove that the defendant violated any prohibited legal provisions.
Regarding the counterclaim, the Judicial Panel ordered the company to pay the outstanding rent until 7/2026, late payment interest, and any taxes arising from the house rental contract.
Hai Duyen
