Rental Agreements

Rental agreements or leasehold agreements are not very common with the lower-end property. New property laws in Thailand had been brought in during May 2018 with regards to rental agreements and removing some of the grey areas when it came to renting a condo. Most foreigners tend to rent before they buy a condo in an area. Buying property in Thailand can become complicated and renting a condo is what most expatriates in Thailand do. Always consult a property lawyer in Thailand for more information.

The new property laws that have been brought in this year state that you can only be asked for one month’s rent as a security deposit. This has been a bit of a grey area for years with some landlords wanting a 6-month deposit. By law, you can now only be asked for a 1-month rental deposit. Tenants may also now break a contract on condition that they have given the landlord 30 days’ written notice. See more below on the lease agreement  in Thailand or speak to our Thai real estate lawyer for more assistance. 

One big contention for years has also been covered by the new law being that the landlord may not add additional charges to the utility bill. The utility bills especially electricity bills have been exploited by landlords for years causing conflict in the rental market. Can you draft your own agreement? Yes you can write your own rental agreement however it has to fall within the law. You will need to take a look at the relevant laws. Most rentals in Thailand tend to be month to month rental agreements with a one month security deposit and are done verbally.

Common Rental Issues

Landlords are also not allowed to lock you out when in default so you cannot access your goods left in the apartment or condo. They also cannot make a surprise inspection when they want and now have to give prior notice of an inspection. You should also consider ll of this if you want to buy an apartment in Thailand.

Renewing a rental contract has also had it problems where landlords had asked for a fee to renew the contract and this has also been disallowed in the new rental agreement laws. If you have left the apartment or condo the landlord is now also by law compelled to return your security deposit within 7 days after leaving. Most people tend to live out their last month on the security deposit but those who don’t will need to get their money back within a week.

The new laws cover residential property, including houses, condominium units, and apartments.

Rental Law Limitations

The law is only applicable to landlords who own more than 5 properties. This is The Stipulation of Residential Property Leasing as a Contract Controlled Business B.E. 2561 (2018) and only covers what is defined as residential property leasing businesses.

• – Your rental agreement is normally in both Thai and English.
• – Name and address of the business operator and its authorized person;
• – Also the name and address of the lessee;
• – Name and location of the property;
• – Details of the property’s physical condition, including any items and equipment;
• – Term of the lease specifying its commencement date and expiration date;
• – Rental fee rates and due dates for payment;
• – Public utility fee rates and due dates for payment;
• – Amount of security deposit.

Speak to our  property lawyer if you are looking at a long-term rental agreement as it has to be registered against the title deed of the property. Speak to us for more information and assistance. Also look at land ownership in Thailand and look at real estate law in Thailand for more information on rental agreements and leasehold.

If you are going to lease property in Thailand such as a house, condo, or business or commercial premises then you will need to understand the basics of the leasehold agreement. This leasehold agreement or rental agreement in Thailand is limited to a maximum of 30 years if it is a long term agreement it has to be registered with the Land Department as it is added to the title deed.

If you are going to draft a leasehold agreement for land then you will also need to take a look at other options such as superficies as well as a usufruct, depending on what you wish to use the land for. As Thailand does not use the Metric system entirely you will also need to understand the size of the land under the land size conversions in Thailand which will allow you to convert the Thai system to the metric system.

Property Zoning

Important – Many business owners over the years have taken lease agreements on restaurants as well as on other business properties. Just because a business is successful does not have any guarantees. Over the years there have been many bars and restaurants sold in Thailand, from Bangkok to Pattaya. Even though the business does well now, the business could very well be drawn by a personality.

Buying a Business

There was a good case in Pattaya with the sale of a very popular live entertainment venue. One of those live bands with restaurant type settings. Once the owners changed hands, the business did not do as well. The point was that the personality was what sold the business. The problem now was that there is not much foot traffic passing the venue and the owner has moved on. Before you sign a leasehold agreement or commercial agreement when buying a business. always do proper research as to how well it performs as well as what makes its so attractive. Many leasehold agreements in Pattaya and Bangkok run into millions of Baht.  

Note that leasing land has it limitations. Yes, however there is a limit as it cannot be for more than 30 years. These leasehold agreements have to be registered with the Land Department as it is placed against the title deed.

In Conclusion 

With all of this, there is also going to be the issues of the location and the issuing of licences, be this cigarette and alcohol licenses.  You can view this is the Entertainment Places Act of Thailand as well as the entertainment license for more background. If you have any questions, you are more than welcome to ask us about the legalities on commercial lease agreements for your business in Thailand. Waht are the 4 things needed in a rental agreement. The 4 main parts of the rental agreement is

1) being the property and parties identified
2.) the monthly quarterly or annual cost of the rental
3) The length or duration of the agreement
4) The rules of use of the property, repairs and maintenance

The information contained on our website is for general information purposes only and does not constitute legal advice.