When using someone else’s property, many people confuse “leasing” with “borrowing for use”, since both allow the use of an asset one does not own. The core distinction lies in consideration: under an asset lease contract the lessee must pay rent (Article 472 of the 2015 Civil Code); under a loan-for-use contract the borrower pays nothing (Article 494). The surprising point: although the borrower pays nothing, the borrower bears heavier preservation and repair duties than the lessee.
Repair and preservation duties in a lease
In an asset lease, the lessor is responsible for repairing major damage and defects of the asset (Article 477 of the 2015 Civil Code), except minor damage as customary. The lessee is only obliged to preserve, maintain and carry out minor repairs (Article 479.1), and is not liable for natural wear and tear of the leased asset. Saying “the lessee bears all repairs” is therefore wrong — major repairs belong to the lessor.
Duties in a loan for use — heavier than in a lease
A loan-for-use contract places the burden on the borrower: the borrower must keep and preserve the asset; repair ordinary damage; compensate if the asset is lost or damaged; and bear the risk during any delay in returning the asset (Article 496 of the 2015 Civil Code). The borrower also may not re-lend the asset without the lender’s consent (Article 496).
Eligible subject matter of a loan for use
A loan for use applies only to non-consumable assets (Article 495 of the 2015 Civil Code). Therefore “borrowing money” is legally not a loan-for-use contract but a loan contract (Article 463) — money is a consumable asset, exhausted by use.
Comparison table
| Criterion | Asset lease | Loan for use |
|---|---|---|
| Legal basis | Arts. 472, 477, 479 of the 2015 Civil Code | Arts. 494, 495, 496 of the 2015 Civil Code |
| Consideration | Rent payable | Free of charge |
| Subject matter | Any asset | Only non-consumable assets |
| Major repairs / defects | Lessor (Art. 477) | Borrower (ordinary damage, Art. 496) |
| Minor repairs / maintenance | Lessee (Art. 479) | Borrower (Art. 496) |
| Natural wear and tear | Lessee not liable | No equivalent exemption |
| Sub-lease / re-lending | As agreed in the contract (no unverified article cited) | Prohibited without consent (Art. 496) |
Legal framework and validity
The above rules are in the 2015 Civil Code (91/2015/QH13), in force as of 14/10/2026. The 2005 Civil Code ceased to be effective on 01/01/2017.
Frequently asked questions
Does borrowing an asset require payment? No. A loan-for-use contract carries no payment obligation (Art. 494) — the core distinction from a lease.
Who pays for major repairs in a lease? The lessor, under Article 477, except minor damage as customary borne by the lessee.
Can one “borrow money”? No. Money is a consumable asset, so “borrowing money” is legally a loan, governed by Article 463 on loan contracts.
Is the lessee liable for natural wear and tear? No. The lessee is not liable for natural wear and tear of the leased asset.
Need to review or draft asset lease or loan-for-use contracts for your company? Reach us via the Contact page of FLAT Law Firm.
The information in this article is for reference only and does not constitute legal advice.
The legal content of this article will be reviewed by the AI Legal Council of FLAT and submitted to the owner for approval before publication; it is not an opinion of a licensed lawyer and does not replace legal advice for specific cases.