HCMC Rental Contracts: Legalities, Scam "Red Flags" &...

Renting an apartment in Ho Chi Minh City (HCMC) can be a nightmare for expats if you don’t understand the local laws and market tricks. From “ghost contracts” on Airbnb to hidden rules about taxes and residency, this article exposes the truth to protect you and your wallet.

Below is the legal handbook and the vital clauses that must be included in any HCMC rental contract for foreigners.

1. Scams & Red Flags to Avoid

Here is a quick overview of scams & red flags to avoid:

Answer-first: The rental market in Vietnam is vibrant but full of risks. Be cautious if you encounter the following signs:

The rental market in Vietnam is vibrant but full of risks. Be cautious if you encounter the following signs:

The Airbnb “Bait-and-Switch” Scam

Scammers often post pictures of luxurious apartments at unbelievably low prices on Facebook groups or booking platforms. When you contact them, they use this trick: “Someone just booked this unit, but I have an identical one in the same building.” As a result, you are taken to see a much shabbier apartment.

Absolute Warning: For tenants looking for housing via Airbnb for their first month, fake landlords often ask you to cancel the booking and transfer money directly to their bank account to “avoid platform fees and get a cheaper rate.” The outcome is the scammer disappears with your deposit.

The Fake Landlord

The person renting out the property avoids or refuses to show you the original/notarized copy of the Pink Book (Certificate of Homeownership) and their ID/Passport.

If they are a sub-leaser renting the unit out to you without the actual landlord’s consent, your contract will be completely void when the real landlord shows up and demands the property back.

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Never hand over your original passport to a landlord. They only need a notarized copy and a photo of your valid visa for police registration.

Nguyen Hoang Lam

Senior Legal Advisor, LeaseInVietnam

2. Legal & Tax Blind Spots (That Few Expats Know)

Here is a quick overview of legal & tax blind spots (that few expats know):

Answer-first: Do not sign a contract priced in USD, as it is legally void. Ensure your contract clearly states who is responsible for the 10% rental tax and mandates that the landlord will register your temporary residence (tạm trú).

Contracts Priced in USD are VOID

According to the regulations of the State Bank of Vietnam (based on the Ordinance on Foreign Exchange No. 28/2005/PL-UBTVQH11 and its amendments), all transactions within Vietnam cannot be paid or listed in foreign currency. If your contract says “Rent: $1,000/month”, in the event of a dispute going to court, this contract can be declared void. The price must be listed in VND (Example: 25,000,000 VND).

Tax Obligations (10%)

According to regulations (Circular 40/2021/TT-BTC), if the rental revenue exceeds 100 million VND/year, a 5% Value Added Tax (VAT) and 5% Personal Income Tax (PIT) apply. Many landlords do not pay this and refuse to issue a red invoice.

The Harm: If your company pays your rent and needs to include this as a valid Tax Deduction, a “tax-evading” landlord will cause trouble for your company with the tax authorities. Negotiate clearly: Does this rental price include taxes?

Housing Law (Article 133): Your Rights When the Landlord Sells

A constant worry for renters is: “What happens if the landlord sells the apartment I’m living in?“. Don’t worry. According to Article 133 of the Housing Law (Law No. 65/2014/QH13), when a landlord transfers the property, the new owner must continue to honor the rental contract with you until it expires. You cannot be evicted without cause.

Temporary Residence Registration (Mandatory)

By law (Law on Entry, Exit, Transit, and Residence of Foreigners in Vietnam), the landlord or building management must declare temporary residence for foreign guests with the local Ward Police (Form NA9). Red flag: If the landlord refuses to do this (usually to evade taxes), you will face massive problems. Without a temporary residence confirmation, you cannot:

• Extend your Visa.
• Get a Temporary Residence Card (TRC).
• Open a domestic bank account.

Read more: Guide to Temporary Residence Registration for Expats

3. “Vital” Clauses You Must Have in Your Contract

Here is a quick overview of “vital” clauses you must have in your contract:

Answer-first: To protect your deposit and your peace of mind, your contract must include a Diplomatic Clause for early termination, clear definitions of Normal Wear & Tear, a specific timeline for deposit return, and explicit rules on maintenance responsibilities.

Diplomatic Clause

This is a life-saving privilege exclusively for expats. This clause allows you to terminate the contract early without losing your deposit in force majeure situations:

• You are transferred out of Vietnam by your parent company.
• You lose your job.
• Issues with Visa/Work permit issuance. Note: To activate this clause, you usually have to give 30-60 days’ notice and provide written proof from your HR department.

Pet Clause

Vietnamese law does not prohibit keeping dogs and cats in apartments, but the Building Management Rules are the ultimate authority. If you have a pet, you must check the Building Rules before renting. Additionally, you must require the landlord to include a clause allowing pets in the contract. Otherwise, the building management has the right to force your pet out.

Normal Wear & Tear

The standard deposit in Vietnam is 2 months’ rent. To avoid unfair deductions when moving out, you must clearly define the boundary between natural wear and tear and damage.

• Normal wear & tear (No compensation required): Paint fading over time, tile grout turning yellow, lightbulbs burning out.
• Damage/Misuse (Compensation required): Children drawing on the walls, scorched mattresses, broken window panes.

Pro tip: Do a very thorough Move-in Checklist. Record a video and take pictures of every corner, scratch, and furniture condition on the day you receive the keys, and email them to the landlord for confirmation.

The Maintenance & Repair Clause (Who Pays?)

In Vietnam, there is often a culture clash regarding maintenance. Landlords may expect you to pay for everything that breaks while you live there, even structural issues. How to draft it: Your contract must explicitly state that the Tenant is responsible for minor consumables (lightbulbs, drinking water filters) and routine cleaning (AC cleaning every 6 months). The Landlord is entirely responsible for structural failures, plumbing leaks, appliance breakdowns (fridge, washing machine, AC motor) that occur from normal use, and any issues present before move-in. The contract should state that if the landlord does not fix a major issue within 7 days, you have the right to hire a contractor and deduct the cost directly from the next month’s rent.

The Deposit Return Timeline

Many generic contracts simply say “The deposit will be returned at the end of the lease.” This is a trap. Landlords will use this vague language to hold your money for months, claiming they are “waiting for the final electricity bill.” How to draft it: Write a strict timeline into the contract. For example: “The landlord must return the full security deposit (minus agreed deductions) via bank transfer within five (5) working days of the contract termination date.”

Related Articles:

• How to Verify a Rental Agent Before Transferring a Deposit
• Step-by-Step Guide to Safely Finding a Rental in Vietnam

4. FAQ: Rental Contracts in Ho Chi Minh City

Here is a quick overview of faq: rental contracts in ho chi minh city:

Does my rental contract need to be notarized to be legal?

No. Under the 2014 Housing Law and 2015 Civil Code, a housing rental contract for residential purposes does not legally require notarization to be valid, regardless of the lease duration. However, if you are renting a commercial space or a villa for business purposes, notarization is required. While not mandatory for apartments, getting it notarized at a State Notary Office (Phòng Công Chứng) adds an impenetrable layer of legal security because the notary will independently verify the landlord’s Pink Book.

Can the landlord raise the rent during my lease?

No, unless the contract explicitly allows for it. Standard 1-year or 2-year contracts lock in the rental price for the entire duration. If your contract includes a clause stating “Rent may be adjusted annually according to market rates,” demand that it be removed or capped at a specific percentage (e.g., maximum 5% increase per year).

What is a “Red Invoice” and do I need one?

A Red Invoice (Hóa đơn đỏ) is an official VAT tax receipt issued by the government. If your employer is paying your rent or providing a housing allowance, your company’s accounting department will strictly require the landlord to provide a Red Invoice so they can deduct the rent as a business expense. If you need a Red Invoice, the rental price will usually increase by 10% because the landlord must pay VAT and Personal Income Tax. You must state this requirement before signing the contract.

What happens if I break the lease early without a Diplomatic Clause?

Under standard Vietnamese civil law, breaking a lease before the expiration date (without a valid force majeure or Diplomatic Clause) constitutes a breach of contract. The standard penalty is the automatic forfeiture of 100% of your security deposit. Some aggressive contracts even try to force you to pay the remaining months of the lease, though this is rarely enforceable in court.

Conclusion: A rental contract is not just a piece of paper agreeing on a price; it’s your “shield” protecting your rights in a foreign country. Never rush to sign if you haven’t carefully read the clauses regarding taxes, diplomatic terms, maintenance, and temporary residence. If necessary, hire a legal expert or a reputable agent to accompany you.