When a landlord unilaterally terminates a commercial lease while the tenant is fully performing, the tenant is not obliged to simply move out — the law gives tenants a toolkit: from demanding continued performance to damages and interim relief. For the general termination and handover process, see industrial lease termination and handover; this article focuses on the tenant’s rights and remedies when the landlord unilaterally terminates.
1. First: is the termination lawful?
The 2023 Law on Real Estate Business (No. 29/2023/QH15, effective 1 August 2024) is strict:
- Article 18.2(g): the lessor may unilaterally terminate only where the tenant breaches — rent delayed 3+ months, misuse, intentional serious damage, or unauthorized renovation/sub-lease.
- Article 19.1(g): the lessor may not unilaterally terminate where the tenant duly performs the contract.
- Where termination is allowed, the lessor must give 30 days’ prior notice (unless agreed otherwise).
Compare the landlord’s termination notice against these grounds and the contract terms: if the tenant is not in breach, the termination is unlawful, triggering the remedies below.
2. Remedy 1: Demand continued performance
The tenant may demand the landlord perform the contract properly — i.e., continue the lease through its term. For commercial premises (retail shops, malls, offices), this is especially valuable because location advantage is irreplaceable: foot traffic, brand recognition tied to the address, relocation costs. Article 19.1(e) of the 2023 Law on Real Estate Business also obliges the lessor to ensure stable use during the lease term.
3. Remedy 2: Claim damages
A landlord who unlawfully terminates must compensate losses caused by its fault (Article 19.1(i) of the 2023 Law on Real Estate Business; Article 419 of the 2015 Civil Code). For commercial premises, losses typically include:
- Fit-out and renovation costs — Article 479.2 of the 2015 Civil Code: the tenant may renovate/improve the leased property with the lessor’s consent and claim reasonable costs. Hence the landlord’s written consent to renovation is pivotal evidence;
- Relocation and replacement-premises search costs;
- Rent differential between the old and equivalent new premises;
- Lost profits and goodwill — proven through books and actual revenue records.
4. Remedy 3: Contractual penalty
If the contract contains a penalty clause, the tenant may invoke it (Article 418, 2015 Civil Code). Commercial leases commonly stipulate 1–3 months’ rent as penalty for unlawful unilateral termination — check this clause carefully, as it is the most “certain” recovery, requiring no detailed loss proof unlike damages.
5. Remedy 4: Interim urgent measures
Where the landlord shows signs of dissipating assets, re-leasing to a third party, or altering the premises to apply pressure, the tenant may ask the court for interim urgent measures under the Civil Procedure Code (asset seizure, prohibition on altering the disputed property’s status quo, etc.). This is the shield during proceedings — apply early, at the first sign.
6. Recommended action sequence
- Respond in writing immediately: assert the termination is unlawful and demand continued performance; use a provable delivery method.
- Preserve evidence: the lease + renovation annexes, landlord’s consent documents, fit-out invoices, the termination notice, premises condition records, photos/videos, revenue books.
- Negotiate: present a quantified loss calculation — many cases settle here once the landlord sees litigation costs exceed settlement.
- Sue if negotiation fails; consider simultaneously requesting interim urgent measures.
- Do not “hold over” to apply pressure — overstaying may oblige you to pay holdover rent and weaken your legal position.
FAQ
Q: The landlord gave 30 days’ notice before terminating — is that lawful?
A: The 30-day notice is only a procedural condition (Article 19.1(g), 2023 Law on Real Estate Business). Without a substantive termination ground (tenant not in breach), the termination remains unlawful despite notice.
Q: Can I recover renovation costs without the landlord’s written consent?
A: Very difficult. Article 479.2 of the 2015 Civil Code ties the cost-recovery right to the lessor’s consent. Always obtain written consent before renovating leased premises.
Q: Can I both demand continued performance and claim damages?
A: Yes, in combination: continued performance as the primary claim, plus damages already incurred (costs, penalties). The court assesses each claim on evidence.
Legal sources
- Law on Real Estate Business No. 29/2023/QH15 (Articles 18, 19) — effective 1 August 2024 — thuvienphapluat.vn
- 2015 Civil Code (Articles 418, 419, 428, 479) — thuvienphapluat.vn
- Civil Procedure Code (Consolidated 99/VBHN-VPQH) — interim urgent measures
This article is for general information only and does not constitute legal advice for any specific case. Drafted by AI and pending review by the QA Council (FLAW AI Legal Council); not reviewed by a human lawyer.
Read more: Industrial lease termination and premises handover · Contact FLAT Law Firm
