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Hourly leased apartments to be regulated by law

The HCM City Real Estate Association (HOREA) has proposed amending the Housing Law and 2014 Law on Real Estate Business to recognize short-term leasing of apartments as a legal business.

Voters have recently reported big problems in managing apartment hourly leases. In many cases, leased apartments are used for prostitution activities, drug trafficking and hi-tech crimes.

 

 

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They have asked for new regulations related to the use of apartments for hourly rentals and sanctions on violators.

In reply, the Ministry of Construction cited the 2014 Housing Law which says house owners who are domestic institutions, households, individuals, or overseas Vietnamese have the right to use houses for residential purposes and other purposes not prohibited by law.

Decree 99 dated in 2015 stipulates that the act of using an apartment for non-residential purposes, such as providing short-term or hourly leasing services, is strictly prohibited by law.

Meanwhile, HOREA said leasing houses, including apartments, under the mode of ‘sharing rooms’ for the short term is a new renting mode, such as used by Airbnb, that fits the ‘sharing economy’.

However, the association pointed out that existing legal documents are not sufficient to manage the business of ‘sharing rooms using the Airbnb service’, thus resulting in negative consequences. It causes loss of state budget revenue and affects social safety and order. In many cases, leased apartments are used for criminal activities.

There have also been ‘conflicts of interest’ between leasers using Airbnb services and local residents, because unfamiliar tenants regularly appear, causing insecurity and affecting the private space of the households in the same residential quarters.

However, despite the problems, HOREA believes that the business of renting out apartments will continue to develop in the future with the strong development of digital technology.

The Airbnb service is popular in many countries, and it can help attract domestic and foreign travelers in Vietnam, especially those who don’t have a high income and want to save on accommodation costs.

Airbnb is convenient also. Leasers and tenants don’t have to meet because they can make transactions online.

An analyst said that the business would develop rapidly in the future because of the high demand from people who have empty apartments and travelers who want to save costs.

“The ‘prohibit all that is unmanageable’ thinking will not work. It is impossible to prohibit hourly leasing business, because this is a real need of life. Where there is demand, there will be supply,” HOREA chair Le Hoang Chau said.

Meanwhile, Lawyer Nguyen Thanh Toai from Hung Dong Law Firm said the Housing Law stipulates that houses must not be used for wrong purposes. Therefore, it is necessary to amend the law if this type of business is recognized. 

Thuy Nga

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