With rapid urbanization, apartments are becoming more and more popular in cities. In addition to the purpose of settling down, many people intend to use apartments for business in the form of accommodation, hourly or daily rental in areas with tourism potential. Is this form of business legal?

The 2023 Housing Law strictly prohibits the use of apartments for purposes other than residence.

Specifically, at Point c, Clause 8, Article 3 states that apartment owners are prohibited from arbitrarily changing the function and purpose of using the common ownership and common use of the apartment building; using the apartment for purposes other than residence; changing or damaging the load-bearing structure; dividing or separating the apartment without permission from a competent state agency.

This is also stipulated in Clause 11, Article 6 of the 2014 Housing Law.

Lawyer Pham Thanh Tuan said that the 2020 Law on Residence defines legal residence as a place used for living, owned or used by citizens, including houses, ships, boats, other means of transport or other places of residence as prescribed by law. People need to register for permanent or temporary residence as prescribed.

Clause 6, Article 2 stipulates that residence is the act of a citizen staying at a place other than a permanent residence or temporary residence for less than 30 days. With such an approach, hourly or daily rental is considered a form of residence and not for living.

The lawyer said that if the apartment owner rents it out to someone else for residential purposes, it does not violate the law.

What is the penalty for violation?

Decree 16/2022 of the Government stipulates in Point e, Clause 1, Article 70, a fine of 20-40 million VND for the act of using an apartment for purposes other than residence.

Regarding the fine, Point c Clause 3 Article 4 of the Decree states that the above fine is applicable to organizations that commit violations. For individuals who commit similar violations, the fine is half the fine of an organization, equivalent to 10-20 million VND.

In addition to being administratively fined with the above amount, the organization or individual committing the violation must also take remedial measures by using the apartment for residential purposes.

In addition, when using an apartment to conduct hourly or short-term rental business and committing other violations, additional penalties may be imposed.

For example, the act of using shared areas and equipment for private use can result in a fine of 30-40 million VND for individuals or 60-80 million VND for organizations.