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Leasehold and rent laws are important when moving to Thailand. Most foreigners who come to Thailand tend to rent the property before they buy it. It is always a good idea that before you buy property in Thailand you rent property in the area or the condominium itself. This will allow you to decide if the traffic, location, or pollution are an issue.
A very good example in Bangkok has been explained on this website called “Inspecting Property”. Likewise as stated in the article it is always a good idea to check the inside filter on the air conditioning unit to see how much dust enters the home. Lastly, always check for dampness in the property around the rain-facing walls as well as around the kitchen units and the bathroom. This becomes important later as explained when renting property or leasing commercial property.
There will always be issues as to what the state of the property was when you signed the lease or rental agreement. Make sure this is noted in writing. With bathrooms in Thailand, the person above you normally drains their shower water into the main pipe via your ceiling. So, always push the tile of the suspended ceiling back to check for dampness and leaks. These are the most common leaks you will find. It then damages the ceiling boards. Read further on the brief coverage of leasehold and rent laws.
Under the Civil and Commercial Code, Section 546 (Duties and liabilities of the lessor) the laws state that the lessor is obligated to provide the hired property in a satisfactory condition of maintenance. Likewise, always check the property as explained above.
Similarly, Section 547 states that the lessor is responsible for reimbursing the lessee for any essential and reasonable expenses they have accrued. This is to uphold the condition of the leased property, excluding costs related to routine upkeep and minor repairs. In Thailand (essential and reasonable expenses) should always be done after discussing this with the owner first. Problems do arise from these as many of the older condominium units in Thailand suffer from dampness. Likewise, many cheap condo units use louver windows. The glass tends to slip out so many glue the glass to the louver mechanism. Also, the winder which is made of cast iron does not last long. This is much like the cast iron taps.
If these types of problems exist and you find major defects then this is covered. Section 548 states that if the property provided for lease is not in a suitable condition for the intended purpose, the lessee has the option to cancel the contract. This would be rare as many people inspect the property before they sign the rental agreement.
The following is also a possibility when it comes to property in Thailand. This is covered by Section 549 stipulates that the transfer of the property, the lessor’s accountability in instances of flaws and dispossession, and the implications of a clause absolving liability are regulated by the relevant regulations outlined in the Code. If you have a lease for longer than 3 years the lease has to be registered by the local government against the property. This is helpful and not as rare as you might think. That one day the police will place a court order on your gate as the owner of the property had defaulted on their mortgage bond.
The issue of repairs if covered again under Section 550 establishes that the lessor bears responsibility for any arising defects throughout the agreement, necessitating the fulfillment of all essential repairs, except those specifically designated by law or tradition as the lessee’s responsibility. Likewise as explained before that a leak from the unit above you that leaks into your bathroom. This is the responsibility of the owner. Your responsibility is only to maintain the property to the standard you received it in. Likewise, you paint the unit due to dust and moisture.
In addition when it comes to responsibility. Section 551 outlines that when a defect in the leased property is not of a nature to deny the lessee the property’s utility and advantage. Yet it is within the lessor’s capacity to rectify. The lessee is obligated to inform the lessor of the issue for resolution. If the defect remains unaddressed for a reasonable duration, and if the defect justifies such action. The lessee has the right to terminate the contract.
You may only use the property for what has been intended. This again is covered in Section 552 establishes that the lessee is restricted from utilizing the leased property for objectives beyond those that are customary, regular, or explicitly outlined in the agreement. As an example is when the property is leased as a rental unit for living. Then the person starts a small manufacturing business in the unit. When a person rents the unit to live in and decides to manufacture small trinkets in the unit creates a noise from the unit.
Looking after the property is also important. When a house or condo is rented then it is the responsibility of the person who lives there to care for the property. Section 553 mandates that the lessee must exercise a level of care over the leased property comparable to what a reasonably prudent individual would exert over their belongings. Likewise including the performance of routine upkeep and minor repairs.
Section 554 states that in the event the lessee behaves in contradiction to the guidelines outlined in Sections 552 and 553, or in opposition to the stipulations of the contract, the lessor holds the authority to alert the lessee to adhere to these regulations or contract terms. Should the lessee fail to comply, the lessor is entitled to terminate the contract.
Note that the owner of the property can inspect the property. Section 555 obligates the lessee to permit the lessor or their representatives to conduct inspections of the leased property during reasonable intervals.
Likewise, when property needs to be upgraded it will depend on what needs to be done. Also how long this will take to complete? The owner might want to replace the floor tiles during the period of the agreement. Most upgrades in Thailand tend to be completed between rental periods however long-term rentals do present an issue. Section 556 specifies that if the leased property necessitates immediate repairs while the contract is in effect, and if the lessor intends to perform a necessary action for these repairs. Likewise, the lessee is not entitled to decline permission for said action, even if it leads to inconvenience. Nevertheless, in instances where the repairs would require an excessive duration, rendering the property unfit for its designated purpose, the lessee has the option to terminate the contract.
Section 557 does the same. In any of the subsequent scenarios. When the leased property necessitates repairs by the lessor. A precautionary action is essential to avert a hazard. Likewise when a third party trespasses onto the leased property or asserts a claim to it. The lessee must promptly notify the lessor of the incident unless the lessor is already aware of it. Likewise in terms of damages. Should the lessee neglect to adhere to this regulation, then they are accountable to the lessor for any harm arising due to the postponement caused by such negligence.
Note that when a rental unit be this a condo or a house you are not allowed to make alterations to the unit. Section 558 stipulates that the lessee is prohibited from making modifications or additions to the leased property without the lessor’s consent. If the lessee proceeds without obtaining this permission, they are obligated, upon the lessor’s request, to revert the property to its original state. Furthermore, any loss or damage resulting from such unauthorized alterations or additions renders the lessee liable to compensate the lessor.
Rental or lease agreements are usually paid monthly. If however in the absence of a designated payment timeframe outlined in the contract or customary practice. Then Section 559 mandates that the rent should be settled after each specified period. To elaborate, if the property is leased on an annual basis, the rent is due at the end of every year; if the property is leased every month, the rent is due at the close of each month. Paying once a year in Thailand would be very rare even for a commercial agreement.
Should you not pay your rent then Section 560 states that if rent goes unpaid, the lessor retains the right to terminate the contract. However, if the rent is due at intervals of a month or longer, the lessor must initially alert the lessee. Then allow a minimum of fifteen days for the lessee to make the required payment.
Let’s look back at the condition of the property when the lease or rental agreement was signed. Note that the condition of the property becomes important. Section 561 outlines that if no written account detailing the property’s condition has been established and signed by both parties, the lessee is assumed to have received the property in a satisfactory state of maintenance. Consequently, the lessee is obliged to restore the property to this state upon the conclusion or cessation of the contract. This is unless they can substantiate that it was already in disrepair upon delivery.
Most agreements do not allow for sub-leasing of the property. With commercial property, however, some do sub-let a section if the property is larger than what they will use. Section 562 establishes that the lessee bears responsibility for any harm or destruction incurred by the leased property due to their negligence. This or that of individuals residing with them or acting as sub-lessees. Nonetheless, the lessee is exempt from accountability for loss or damage stemming from appropriate and reasonable usage.
Prescription is also covered when it comes to leasehold agreements or rental agreements. The final section states that under Section 563 dictates that any legal action pursued by the lessor against the lessee related to the lease agreement must be initiated within six months following the return of the leased property.
The lease agreement or rental agreement comes to an end on the specified date in the contract. There are exceptions as you will see below. Section 564 concludes that a lease agreement comes to an end upon the completion of the stipulated duration, requiring no formal notification. The exceptions are listed under Section 565 establishes that leasing of garden land is assumed to be arranged for one year, while leasing of paddy land is presumed to be organized for the agricultural year. Lastly, if the property is destroyed then the agreement comes to an end under Section 567.
The agreement can be adjusted under Section 568 specifies that if a portion of the leased property is lost without any negligence on the part of the lessee, they have the right to request a proportional reduction in rent corresponding to the lost portion. Additionally, if the remaining part of the property is insufficient to fulfill the purpose for which the lease was established due to the loss, the lessee has the option to terminate the agreement. The following is an example of the use of this section. Note that in their agreement they agreed that the rent would not change with the reduction of advertising space available.
In line with Section 568, paragraph one of the Civil and Commercial Code. It is indicated that the lessee is entitled to request a proportional reduction in rent. This phrasing inherently implies that the lessee isn’t obligated to demand such a reduction. This provision doesn’t mandate a rent reduction in cases of partial property loss.
The lease agreement stipulates that the defendant must pay rent annually to the plaintiff. This irrespective of any reduction in the number of fences or advertising space. As the annual rent remains unchanged, this arrangement doesn’t violate the law. The contract contains a provision stating, “Should the lessee (defendant) fail to adhere to the rent terms specified in the contract, the lessor (plaintiff) reserves the right to forfeit the security deposit. (Judgment of the Supreme Court No. 679/2536)
Note that if the lease or rental is longer than 3 years it has to be registered with the government against the property. Hence Section 569 states that the lease agreement for immovable property remains valid even when the ownership of the leased property changes hands. The new owner, or transferee, inherits the rights and responsibilities of the previous owner in relation to the lessee.
An example of this is based on a long-term commercial leasehold where the property has been attached by a court order. Recall above where the police attach the court order to your gate. What happens next is an example of the new owners not wanting to honor the agreement of the original owner. This is with a registered leasehold agreement in place that has been registered for 28 years against the property.
Now the expression “good-faith intention” is important as someone could register a shelf company A and register a lease in its name from company B the actual business. All are the same owner who can see that company B is not doing financially well and will collapse. Yet, after bankruptcy paying minimal rent to whomever the new owner becomes. Then continue to operate on low rent as company A.
The interpretation of the contract should be conducted in alignment with good-faith intentions. Likewise, taking into account customary practices, as outlined by Section 368 of the Civil and Commercial Code. The involved parties executed a documented lease agreement, duly registered with the appropriate authority, spanning 28 years.
This registration signifies their shared intent to maintain the lease’s validity until the contract’s culmination as stipulated. This without granting the lessor the ability to prematurely terminate the agreement. This is particularly relevant in scenarios where the leased property is seized by court order. This due to actions on the part of the lessor unrelated to the defendant’s conduct.
It’s important to note that despite the ongoing lease. The plaintiff has assumed the role of the assignee for the leased property. Thereby inheriting both the rights and responsibilities of the assignor in relation to the lessee. Following Section 569 of the Civil and Commercial Code. The plaintiff lacks the authority to terminate the lease or initiate eviction proceedings against the defendant. (Judgment of the Supreme Court No. 3092/2539)
Very common in Thailand but without a written agreement. Section 570 establishes that when the lessee continues to occupy the property after the initially agreed-upon period has concluded. Likewise the lessor is aware of this arrangement without raising any objections. It is considered that the parties have automatically extended the contract for an unspecified duration.
Finally, those who have paddy fields. Section 571 states that if a lease agreement for paddy land is concluded or ends after the lessee has planted paddy. The lessee then has the right to retain possession of the land until the harvest is complete. This provided they continue paying rent. This is a summary of leasehold and rent laws in Thailand.
The information contained in our website is for general information purposes only and does not constitute legal advices. For further information, please contact us.