What is a security deposit agreement? Is it necessary to sign a security deposit contract? When to use a security deposit contract for rent? … Questions like that. You rent a house and about 10, 20 or 30 days later you move in. If you only make a verbal agreement without signing a security deposit agreement. Here’s the risk you may run into: the landlord may find another tenant without waiting for you; the landlord takes your deposit but rents it out to someone else; the landlord does not pay the deposit when you are out of the contract (very few but there are landlords like that), …
What is a security deposit agreement? Sample security deposit agreement in Vietnam 2021
A security deposit is a large sum, which can range from 1 to 3 months rent. So you need to make sure that your money is used efficiently and safely returns to you at the end of the contract. Make your deposit safer by signing a security deposit agreement with your landlord. But first, you need to understand the nature of the security deposit agreement, let’s continue with JHouse.
What is a security deposit agreement?
A security deposit contract or security deposit agreement is an agreement to secure the performance of a lease agreement between a tenant and a lessor.
The essence of a security deposit agreement is a contract for the parties to commit and guarantee the performance of another contract. In this case, the tenant and the lessor sign a holding deposit agreement to secure the performance of the lease.
A mandatory condition for signing a security deposit agreement is that the lessor agrees to let the tenant rent the house.
For the sake of simplicity, a security deposit agreement can be a provision in the lease agreement.
When to use a security deposit contract for rent? Security deposit agreements are often used when tenants have not moved in immediately, but deposit in advance to keep the house and ensure that they will rent the house as promised. Avoid the situation where the lessor leases the house to others.
If you are interested in what is the meaning of the security deposit? as well as how many types of security deposits are available and 14 important questions you need to know about security deposits. Find out before signing a security deposit agreement.
6 basics every security deposit agreement should include
1. Subject of contract – house/apartment information
Information about the house/apartment needs to be detailed and accurate such as: Building name, block, apartment code, floor, area, purpose of use, date of moving in, number of occupants, rental period, …
2. Deposit amount and payment time
- Tenant deposit terms must include a detailed and accurate deposit amount. The rental deposit will include: a rental security deposit, a pet deposit, a deposit for valuables, and a car parking deposit.
- Must have a payment period (specific payment date). Usually the same day of signing the deposit contract or 1-2 days after.
3. Interest rate of the deposit
In Vietnam, you are not required to deposit a rental security deposit. Just pay the deposit and the landlord will keep them. To avoid trouble, owners often leave the interest rate at 0%, which can be understood as no interest charged on the deposit amount. However, you need to ask the landlord about the interest rate on the deposit, if any.
4. Responsibilities of the parties
Include all the jobs, responsibilities and rights of the parties when signing a security deposit agreement. Party A needs to prepare the apartment ready, repair, buy more furniture if any, … Party B needs to pay a deposit
5. Loss and deduction of deposit
The deposit contract should clearly state the circumstances in which you have your deposit deducted or your rental deposit lost. Include specific reasons and conditions.
What you really find out before signing a lease is when can a landlord deduct from my security deposit?
6. Refund of deposit
The deposit agreement should include the process and conditions for returning your deposit. Deposit return period – certain number of days, e.g. after 7 days from the end of the tenancy.
Latest sample security deposit agreement
Below is an example of a security deposit agreement that you might sign with a landlord. Normally, the security deposit contract will be prepared by the landlord/management company. You don’t have to prepare it yourself, but JHouse wants to provide you with a sample agreement that you can use and compare if needed.
Socialist Republic of Vietnam
Independence – Freedom – Happiness
Security Deposit Agreement
Ho Chi Minh City, day ___ month ___, 2021.
The lessor (Party A)
Full name: Year of birth: ID card:
As the legal representative/owner of the house/apartment:
Tenant (Party B)
Full name: Year of birth: ID card:
After discussing and reaching an agreement, we agree on the terms of this security deposit agreement as follows:
Article 1: Subject matter of the contract
Party A agrees to lease the apartment to Party B with the following details:
- Building name:
- Apartment code:
- Purpose of use: To stay
- Number of occupants: ___ people
- Date of moving in: ___/___/ 2021
- Rent: ___ VND, excluding management fees and other expenses.
- Contract period: ___ months
Article 2: Deposit and payment time
This deposit is a security that Party B will perform and comply with all the terms of the lease. Deposit amount, payment time and payment method are as follows:
- The total rental deposit that Party B needs to pay to Party A is: ___ VND.
- Payment time: ___/___/ 2021
- Payment method: By cash or bank transfer.
This security deposit cannot be used to pay rent without Party A’s prior written consent.
Article 3: Calculating interest on the deposit
The two parties agree that no interest will be charged on this rental deposit.
Article 4: Responsibilities of Party A and Party B
Responsibilities of Party A:
- Be sure to be the legal owner/user/manager of the apartment.
- Prepare rental contract and inspection records, hand over equipment – furniture to Party B.
- Prepare the apartment, clean it, notify the building management, and buy more equipment – furniture as agreed with Party B.
- Ensure full and private use rights for Party B.
- Timely repair damage caused by natural wear and tear to the apartment.
- Pay taxes arising from rental income (if any).
- Perform this deposit contract. If Party A fails to perform/ violates the deposit contract/rental contract, Party A needs to refund the entire amount of the deposit received by Party B and compensate for the breach with an amount equal to ___ times the amount that Party A has received. Party B has made a deposit.
- Provide party B with a receipt for the rental deposit.
- Party A is not responsible for settling disputes about deposits between tenants.
Responsibility of Party B:
- Sign and perform the rental contract as agreed with Party A.
- Pay the deposit in accordance with regulations.
- Pay your rent and utility bills in full.
- Use the apartment for the right purpose.
- Non-transferable tenancy agreement.
- Repair, timely replacement of damage – loss of property inside the apartment.
- Implement other terms stated in the tenancy agreement.
Article 5: Loss and deduction of deposit
Party B shall lose the entire deposit in the following cases:
- Failure to perform the rental contract, after ___ days from the date of moving in, if Party B does not move in, Party B will lose the entire deposit.
- Ending the lease agreement ahead of time.
- Failure to pay rent.
Party B shall deduct the deposit in the following cases:
- Damage, loss of equipment – furniture inside the apartment that Party B’s fault caused and did not fix. Eliminates natural wear and tear.
- Cost of repainting the apartment (if any).
- Cost of cleaning and re-cleaning the apartment. If when moving out, Party B does not clean the apartment.
- Cost of transporting furniture and equipment that Party B left behind after moving out.
- Failure to pay utility bills if any under the terms of the rental agreement.
For the costs of repairing damage, replacing, repainting, cleaning, transporting furniture, etc., Party A will provide invoices/receipts for such expenses.
Party A does not deduct the deposit for damage caused by natural wear and tear and force majeure issues (flood, storm, fire, war, epidemic, …)
Article 6: Refund of deposit
Party A will return the deposit to Party B with the following contents:
- Time to return the deposit: after ___ days from the end of the tenancy agreement.
- Amount: ___ VND
- Deposit refund method: Cash or transfer to Party B.
- Party B notifies in writing or email to Party A of the termination of the tenancy contract 30 days before the end of the tenancy contract.
- Party B fully pays the rent and utility bills.
- Party B repairs damage, replaces lost properties, cleans, repaints (if any), cleans Party B’s belongings out of the apartment.
- Return all apartment keys to Party A.
- Do not violate other terms specified in the tenancy agreement.
This security deposit agreement takes effect from the date of signing and is made in two copies of equal value, each party keeps one copy.
Confirmation signatures of Party A and Party B
If you need to download the Word file, JHouse has prepared it for you, click on the link below to download and customize it for you.
Free download: Latest security deposit agreement form 2021 (Vietnamese/English bilingual)
In addition to the security deposit agreement with detailed terms as well as policies and procedures for the deposit. You need to ask the landlord to confirm receipt of the deposit with a security deposit receipt for rentals. The deposit receipt is considered proof that the landlord has received your deposit.
Risks are always hidden, it is better to know and stay away from them. The security deposit agreement will ensure your funds are used efficiently and safely returned to you at the end of the contract. Through this guidance, JHouse hopes that you have understood what is a security deposit agreement with the required terms and can use a sample security deposit agreement when needed.
Note: The information provided on this article is for guidance only. It is not legal advice. Please contact a consulting attorney for advice specific to your case.
JHouse Content Team
The in-depth content development team on housing services for foreigners & Vietnamese in Vietnam. The content is simple, easy to understand, logically arranged to bring readers useful topics and information from real experiences. JHouse welcomes sharing & copying from you – Attach source & quote from JHouse, please!