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.

Rental Agreements

The new 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.

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. 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.

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.

Now for the bad news which limits the rental law:

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 a property lawyer in Thailand is 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.

Leasehold Agreements

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.

If you are going to take a leasehold on the commercial property then you will also need to take a look at the zoning laws. The property zoning in Thailand is strictly enforced. If you are going to start a factory or a bar then you will need to ensure that the location of your business is allowed in the zoning laws of Thailand. You need to ensure this before you sign the leasehold agreement.

 

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

Leasehold Agreements FAQ

FOREIGNER LEASING LAND IN THAILAND?

As a foreigner in Thailand you generally cannot own land however you can lease land in Thailand. This lease has to be registered with the Land Department in Thailand as it is usually a 30 year leasehold agreement. Note that a foreigner is not allowed to farm in Thailand.

IS A 30 YEAR LAND LEASE THAILAND POSSIBLE?

Yes the 30 year land lease agreement is possible. You are not allowed to farm as a foreigner but many do opt to build on the land under a registered superficies where you own the building or house on leasehold land. There are options outside of a leasehold agreement.

WHAT IS THE THAILAND LEASE AGREEMENT ACCORDING TO THE THAI LAW?

Thai law will set the rules for leasehold agreements in Thailand. The current limit is 30 years on a land lease agreement. You can have back to back lease agreement however these might not be enforceable when the time comes. There have been many disputes in the past in this regard.

CAN YOU CREATE YOUR OWN RENTAL 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.

CAN FOREIGNERS LEASE LAND IN THAILAND?

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.

WHAT FOUR THINGS WILL BE IN THE 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
These are the 3 main issues in a rental agreement.