If you rent property in Thailand there are new guidelines for tenants and landlords that come into effect from today. Mostly good news but there are a few exceptions that you will need to be aware of. The days of the unscrupulous landlord may be partly over.
With thanks to Thailandproperty.news and Tilleke & Gibbons, leading south east asian lawyers, here’s a quick breakdown, in English, of the main points.
Under the new laws residential property landlords will be required to adhere to a new set of terms and conditions that ensures rogue practices are eradicated and that tenants are not victims of unfair contracts.
The new laws, which were published in the Government Gazette on February 16, helps to remove many of the contentious scenarios or ‘grey areas’ which can often be disputed between a landlord and tenant.
One of the most significant points is that landlords will no longer be able to ask for more than one month rent and one month security deposit up front.
Additionally, a tenant now has the right to terminate their contract at any time, providing they give 30 days written notice to the landlord.
Landlords can not add extra charges on top of standard utility bills, protecting tenants from paying more for water and electric than they actually costs.
Landlords can no longer prevent access to the property or seize belongings should the tenant default on rent.
Landlords are also prohibited from inspecting a property without prior notice and they are also prohibited from charging a fee to renew a rental contract.
A landlord must return security deposit within seven days.
The new laws apply all residential property, including houses, condominium units and apartments.
According to Thailandproperty.news, the new laws represent major changes to Thailand’s property sector.
But it’s not all good news.
The new laws only apply to landlords who own five or more properties.
Landlords who lease or sublease five or more properties, regardless of whether they are in the same building are now defined as a “residential property leasing business”, Thailandproperty.news reported.
The Notification imposes the following requirements:
1. Residential lease agreements must include a version in Thai and must contain the following details:
a) Name and address of the business operator and its authorised person;
B) Name and address of the lessee;
c) Name and location of the property;
d) Details of the property’s physical condition, including any items and equipment in the property;
e) Term of the lease specifying its commencement date and expiration date;
f) Rental fee rates and due dates for payment;
g) Public utility fee rates and due dates for payment;
h) Service fee rates, which must be reasonable and at the actual cost paid for the services, and due dates for payment;
i) Other fees and expenses (if any), which must be reasonable and at the actual cost paid, and due dates for payment; and
j) Amount of security deposit.
2. Invoices for the fees in items (f)-(i) above must be sent to the lessee at least seven days before their due dates, and the lessee will have the right to check information related to the payments shown in the invoices.
3. Details of the physical condition of the property and equipment (if any), inspected and acknowledged by the lessee, must be attached to the lease agreement, and a duplicate must be delivered to the lessee.
4. The security deposit must be immediately returned to the lessee at the end of the agreement, unless the business operator has to investigate any damage to ascertain whether or not it is the responsibility of the lessee. If the lessee is found not to have caused such damage, the security deposit must be returned within seven days from the end of the agreement and the business operator retaking possession of the property. The business operator is also responsible for any expenses incurred in returning the security deposit to the lessee.
5. The lessee has the right to terminate the lease agreement early provided that at least 30 days’ advance written notice is given to the business operator.
6. Any material breach for which the business operator can terminate the agreement must be clearly written in red, bold, or italic font. The business operator can only terminate the agreement if written notice has been given to the lessee to rectify the breach within 30 days of receipt and the lessee fails to do so.
7. The agreement must be made in duplicate, one of which must be given to the lessee immediately upon execution.
Under section 35 of the Consumer Protection Act, any residential lease agreement which does not contain the required terms above shall be interpreted to include them as implied Terms.
Residential lease agreements must not contain:
1. Any waiver or limitation of the business operator’s liability from its breach of agreement or wrongful acts;
2. Any advance rental fee equivalent to more than one-month’s rent;
3. Any term allowing the business operator to change the rental fees, public utilities fees, service fees, or any other expenses before the end of the agreement;
4. Any security deposit of more than one-month’s rental fee;
5. Any term allowing the business operator to confiscate the security deposit or advance rental fee;
6. Any term allowing the business operator or its representatives to inspect the property without prior notice;
7. Any stipulation of electricity and water supply fees exceeding the rates specified by the relevant authorities; 8. Any term allowing the business operator to prevent or obstruct the lessee’s access to the property to seize or remove the lessee’s belongings if the lessee defaults on rental fees or other expenses related to the lease of the property;
9. Any term allowing the business operator to request any fee or expense for renewing the lease;
10. Any term allowing the business operator to terminate the agreement early other than for a material breach of the lease agreement by the lessee;
11. Any term making the lessee liable for damages incurred due to ordinary wear and tear from usage of the property’s contents and equipment;
12. Any term making the lessee liable for damage to the property, contents, and equipment that was not the lessee’s fault and in force majeure situations; and
13. Any term making the lessee liable for defects to the property, contents, and equipment incurred due to ordinary wear and tear through usage.
Under section 35 quarter of the Consumer Protection Act, a residential lease agreement that includes any of the prohibited terms above shall be interpreted as not including them.
Any business operator who fails to meet the above requirements may be subject to imprisonment not exceeding one year and/or a fine not exceeding 100,000 baht (section 57 of the Consumer Protection Act).
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