Renting your Property

The rental of real estate constitutes an important part of the income of the foreign investments in Thailand. Thus, many rentals of Condominium, Apartment, Villa, House. These different types of rent property mentioned above are often encountered in Thailand. Of course, other properties can be rented in Thailand, such as buildings, bungalows, huts or land, provided that the property is registered with the relevant authorities. Apartments and condominiums are generally the most rented properties in Thailand.

Of course, a foreigner can rent property in Thailand, provided that he is the owner of the rented property. For this purpose, the access to full ownership is very limited in Thailand for foreigners. They can own in their name condominium units, corresponding to the building companies that have the condominium license.

Any person of Thai or foreign nationality is free to rent property. Of course, it is essential to be the owner to rent property and not to sublet a property without the owner’s agreement. It is also important to note that short term rentals (less than one month) are very restrictively regulated or prohibited in short term condominiums. In addition, Thai law governs the procedure for renting property in Thailand, and it is also essential to make a written contract with the tenant for the rental of your property for legal protection. Therefore, several steps are necessary to be considered by the landlord who wishes to rent property in Thailand. Before proceeding with the rental, make sure that you can rent your property. The following checks are necessary:

The first step is to check the title to confirm that you are the registered owner of the property. Indeed, after signing the real estate purchase contract, the transfer of ownership to the new buyer is not automatic. The registration of the new buyer must be done at the appropriate land office.

Property buyers in Thailand who want to be able to choose their property with confidence should consider the rules and condominium regulations of each complex, as well as county regulations before renting their property. For rentals of less than one month, Thai law strictly regulates rentals, the “Hotel Act defines the conditions”, and limitations on short-term rentals differ depending on the type of property being rented. Thai law has allowed short-term rentals at the following properties:

“any lodging place that has no more than four rooms, whether located in a single building or in multiple buildings, and whose total service capacity does not exceed that of the guests 20 is operated as a business providing a source of income to the owners.”

For this reason, short-term rental of a villa or apartment is possible, while rental of a condominium unit is limited. However, other regulations apply, such as the difference between renting a condominium unit and a house for a short period of less than 30 days.

Short-term rentals of apartments and condominiums: Condominium rentals of less than 30 days can only be made by licensed establishments. This means that they have a hotel license. However, condominium owners can legally rent out their properties for periods longer than 30 days, with the exception of guesthouses registered with the Ministry of Tourism. In addition, most condominium rules and regulations specifically state that short-term rentals are not permitted. In order for the corporation to even approve this practice under its own rules, 100% of the complex owners must agree to allow short-term rentals. But changing the condominium rules is only the first step. Owners who rent out their property for a short time without a hotel license are subject to prosecution, substantial fines per day of rental, and up to a year in jail. Numerous police checks are carried out, particularly in condominiums, to identify these illegal rentals. However, there are other ways to rent a condominium legally.

Short-term rental of a house or villa: Renting a villa or a house in Thailand is possible, provided that the hotel law is respected. Also, the regulations of the municipalities can impose a preliminary registration to proceed to the short-term rental of your villa or your house. Therefore, we recommend that you call in an expert before renting your property to confirm the compliance of your rental. A specificity applies to the foreigner owner of the villa (owner of a long term lease or usufruct), the first step is to make sure that a legitimate Thai company is running the rental business, complying with Thai law, preparing the accounts and paying the taxes. Next, they must familiarize themselves with health and safety requirements, including the installation of fire extinguishers. Finally, they must keep detailed records of their guests (including copies of passports for TM 30 reporting) and ensure that names are reported weekly to the hotel manager.

In Thailand, leasing of real estate can be done without a lease agreement. However, a legislative restriction the Contract-Controlled Business B.E. 2561 (2018) is to impose since May 1, 2018, the leasing of real estate in Thailand for commercial operators who lease five or more units of property to individual lessees, for residential purposes, regardless of whether the units are in the same building.

Failure to comply with the above requirements may result in a jail sentence of up to one year and a fine of up to THB 100,000.

In any case, it is recommended that the landlord and the tenant sign a written contract to establish the terms of the lease. Indeed, this contract defines the rights and obligations of the owner and the tenant. Its importance lies in the fact that it allows to avoid possible disputes. Secondly, its objective is to set out the rules of the contract between the landlord and the tenant so that each party knows what it is entitled to ask and what it is obliged to do. This contract is binding on both parties. Our model rental contract contains essential elements such as the contact details of the signatories, the duration, the notice period, the amount of rent, the charges and the security deposit. You can download it directly on our platform.

At the entrance, the inventory of fixtures allows to note in which state the tenant receives the premises. You will thus be able to keep the deposit in case of deterioration of the property following the rental period. Also, the inventory of fixtures at the beginning of the rental period allows you to establish that the property you are renting to your tenant is in a good state of use and repair, as required by Thai law. With Themis Partner, you can benefit from an inventory of fixtures for the current management of your property.

Manage your rental property yourself with Themis Partner, thanks to our property management documents. By following up the rental yourself, you will be aware of any problems that need to be resolved quickly with your tenant. In direct contact with the tenant, you will have in real time all the information concerning the rental management of the rented property, such as unpaid rents, the need to carry out the work or repairs that the rental law places on the landlord, the possible nuisances caused by your tenant or on the contrary the disturbances of use that he undergoes from the other residents of the building. If the tenant defaults, you can use our formal notice to request repairs or payment of the unpaid rent.

Whether you’re looking to move out of your home-based business or looking for a larger space, commercial leasing can come with many risks and concerns. So it’s essential to follow specific procedures:

First, take stock of your business to determine your real estate needs. How much space will you need over the next few years? If you’re expanding, it may be best to sign a short-term lease or find a building where you can expand.

Finding commercial space for lease can be a long and tedious process. You need to be aware of the purpose of the space, as some condominiums may limit the use of commercial space to specific activities. It is essential to find out beforehand what activities can be carried out in the space you wish to lease. Finally, consider the costs of setting up your business.
As you can see, the choice of location for a business is important.

Once you’ve found an attractive space, don’t immediately sign the lease offered by the landlord. It is usually possible to negotiate the terms. The rental of a space in which a commercial activity will be carried out must be the subject of a signed lease agreement. This contract must be well studied and mastered by both parties because it is the key element of the commitment of both parties. Indeed, it governs the obligations and rights of the lessor and the lessee in the context of their interactions relating to the lease in question. At the beginning of the lease, a security deposit is usually required by the lessor. It remains in the hands of the lessor for the duration of the lease and serves to guarantee the lessor against the payment of sums that the lessee may have to pay upon vacating the premises. Themis Partner provides you with a model of commercial lease contract adapted to your personal use.

In order to provide the best possible framework for your rental and to protect you against possible disputes, a certain number of rules must be scrupulously respected.

The first step is to choose the right tenant. To do this, do not hesitate to meet the tenant in person and to discuss with him or her to judge his or her seriousness. You are entitled to ask for a detailed file with a copy of the payslips and the last rent receipts. To select the best tenant, use our rental application for your property and get all the information and profiles of potential tenants for your property.

Most often, landlords ask their tenants for a one or two month security deposit when they sign the rental agreement. The security deposit encourages the tenant to respect the property and provides security for the landlord. If damages are found, the landlord can keep the entire deposit.

Before you start renting a professional property, it is essential to contact a professional. Indeed, the lease in Thailand is a contract which frames the relations between the two parties (the lessor and the tenant) and mentions their various obligations. It is therefore essential to know one’s rights and duties and to call upon an expert or to download a model lease contract written by professionals. The importance of contacting Themis Partner for the drafting of this document allows the tenants and the owner to be informed of the different clauses included in the lease. By calling on us, it becomes possible to be better informed about the obligations and duties of each. But you should also know that we propose models of rental contract or put you in contact with a lawyer who masters perfectly the real estate law in Thailand.

The inventory of fixtures is an essential step when you rent a property. This document, established in duplicate and signed by both parties, must be carried out in a thorough way. Go around each room, note the general state of the walls, floors and equipment. Small details should be mentioned: the presence of a light bulb in the living room, the shape of the taps. The inventory of fixtures will serve as a reference document when your tenants leave the apartment. If you notice any damage, you must indicate it on the outgoing inventory. You will then be entitled to use all or part of the security deposit to make the necessary repairs.

A tenant may have the right to sublet his apartment or house. To do so, he must respect precise rules that we will see later. Whether it is the landlord or the price of the sublet, it is a very controlled process when it is authorized. Subletting can be a useful way to pay part of the rent during your absence while increasing the occupancy rate of the property. It is a valuable asset particularly sought after in large cities such as Bangkok, where there is a large rental supply.

According to Thai law, the tenant is not allowed to sublet his rental without the written consent of the owner. The first thing to do is to ask for the landlord’s written consent to sublet his apartment. If you take the risk of subletting your apartment for which you have a rental contract for your main residence, you expose yourself to:

The maximum term for registration of a lease with the Land Department is 30 years. Registration of a lease in the name of a stranger to the land is possible and consists of entering that person’s name on the back of the title to the property, as a tenant, under a lease agreement attached to the title. To say that a 90-year interest can be registered in the land registry is false. On the other hand, renewals are possible, yes: The law is clear on this point as Article 540 of the Civil Code is Commercial states:

“The duration of a real estate lease may not exceed 30 years. If it is concluded for a longer period, this period must be reduced to 30 years. The said period may be renewed, but the duration of the renewal may not exceed 30 years from the date of the renewal.”

Thus, the law does not prohibit renewal, since it is provided for in the body of the law. It is customary for the lease agreement to be renewed at least twice, for a total term of 30 years plus 30 years plus 30 years. However, if this term is exceeded, the Thai judge may interpret it as a circumvention of the law and an attempt to confer full ownership in a disguised manner. It is therefore essential to use the services of an advisor to insert the clauses inherent to the transmission of the contract to his heirs. Themis Partner will be happy to put you in touch with a Thai specialist in real estate law and will be able to answer your questions. Finally, it is essential to draft the clauses of the contract properly in order to provide for the possibility of contractual renewal.