New laws provide greater protection for people who rent property in Thailand

[webfact]

New laws provide greater protection for people who rent property in Thailand

 

FILE photo

 

People who rent property in Thailand will be given greater protection from unscrupulous landlords, under new plans announced by the Thai government.

 

Under the new laws, which come into effect on 1st May 2018, 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 16th February, 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 from 1st May, 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.

 

Legal firm Tilleke & Gibbins published full details of the new requirements on their website.

 

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 authorized person;

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 ter 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.

 

FILE photo

 

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 THB 100,000 (section 57 of the Consumer Protection Act).

 

-- © Copyright Thai Visa News 2018-02-26

 

[mogandave]

Good news that.

[smutcakes]

Some of it is good, some of it is impractical and stupid. There are incredibly poor tenants as well as poor landlords, so landlords need protection as well.

[supremeville]

Quote

The new laws only apply to landlords who own five or more properties.

 

So basically, just business as usual for most landlords.

[dotpoom]

"Additionally, a tenant now has the right to terminate their contract at any time, providing they give 30 days written notice to the landlord."

     So what's the point of having a contract at all for more than 30 days?

[lordpeps]

so does that mean a business operator doesn't have to pay the full 3 years lease up front

[kcpattaya]

Not very thoughtful.
Yet another one "brilliant idea" that completely misses the point... 

[stud858]

Can anyone tell me where I can view this Government gazette online?

[YetAnother]

18 hours ago, webfact said:

The new laws only apply to landlords who own five or more properties.

foolishness; must be a lot of these law-makers that own 4 properties

[stud858]

2 minutes ago, YetAnother said:

foolishness; must be a lot of these law-makers that own 4 properties

Seems silly.I Agree. I'd like to Confirm that regulation.  May be a mistranslation from Thai. Hope to view original regulation in Thai one sunny day.

[geisha]

Any mention of obligation to Notify at immigration for people renting ?

Many people say that their owners won’t comply . I would have thought this point very important.

[stud858]

4 minutes ago, geisha said:

Any mention of obligation to Notify at immigration for people renting ?

Many people say that their owners won’t comply . I would have thought this point very important.

It seems the regulations not always enforced to the exact description. I've taken this approach.  I'm a foreigner. I go to report TM30 for anytime away from my apartment more than 24 hours. No exceptions.  Can't lose that way.  Except for your wasted time. 

[worgeordie]

The wife will have to sell a couple of properties or transfer into daughters name,

as these laws have gone too far the other way,

what's the use of having tenant sign year contract,when they can give 30 days notice to 

quit,after you have paid agent months finders fee.

1 months security deposit is not enough incentive for people to take care of your property,

If tenants default on rent,seems you cannot do much.

 

sure some landlords do take advantage of tenants by not returning deposits,etc,

how is this going to affect agents who take months rent in fee,when tenant is not

obliged to fulfill 12 months contract,and can quit with 30 days notice.

regards worgeordie

[halloween]

Hmmm............for the last 7 years I have paid my rent annually in advance in return for a 12.5% rate cut, and as the lease has been renewed each year there have been no rent increases in that time. Changing my lease to monthly could also see rent rise to the current monthly price, which has increased by 25% over those 7 years.

I have an excellent relationship with my landlord, hoping he ignores the new legislation.

[Autonuaq]

2 hours ago, smutcakes said:

Some of it is good, some of it is impractical and stupid. There are incredibly poor tenants as well as poor landlords, so landlords need protection as well.

Poor landlord?

You have to take care and do maintenance of the property.

And for that you collect rent and a part is for the maintenance.

There is no poor landlord. Only people who not take care.

 

And this new law address some of the problems.

[cornishcarlos]

9 minutes ago, Autonuaq said:

Poor landlord?

You have to take care and do maintenance of the property.

And for that you collect rent and a part is for the maintenance.

There is no poor landlord. Only people who not take care.

 

And this new law address some of the problems.

 

You think every landlord is rich ? 

Some people buy an investment property as a retirement plan and rent it out. Rent doesn't necessarily make the owner a profit, just covers costs. Some landlords end up very much out of pocket, due to bad tenants !!

[stud858]

http://www.mratchakitcha.soc.go.th/

This site holds official gov. Gaz. but only in Thai. If you can read thai you could confirm the government regulations here.

[gk10002000]

1 hour ago, dotpoom said:

"Additionally, a tenant now has the right to terminate their contract at any time, providing they give 30 days written notice to the landlord."

     So what's the point of having a contract at all for more than 30 days?

yeah.  While I would never sign any long term lease that did not have some sort of escape clause, maybe an extra penalty for early termination, etc.  But to allow all long term leases to be able to be so simply broken may not be so fair to the landlord.  Can the landlord terminate the lease with 30 day notice?  That would be unfair to the tenant.

[YoungBrit]

How does a tenant know if the landlord has 5 or less? For that matter, how does an agent know too unless they manage for an owner?

[laislica]

11 minutes ago, gk10002000 said:

yeah.  While I would never sign any long term lease that did not have some sort of escape clause, maybe an extra penalty for early termination, etc.  But to allow all long term leases to be able to be so simply broken may not be so fair to the landlord.  Can the landlord terminate the lease with 30 day notice?  That would be unfair to the tenant.

 

As far as I can see:

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.

 

As has been mentioned, this goes to far in the renters direction.

[smutcakes]

47 minutes ago, Autonuaq said:

Poor landlord?

You have to take care and do maintenance of the property.

And for that you collect rent and a part is for the maintenance.

There is no poor landlord. Only people who not take care.

 

And this new law address some of the problems.

I meant poor in a responsible way not financial. Yes tenants need protection from unscrupulous landlords, but also there are many tenants who are unscrupulous and landlords should have law and recourse against them to. Not just a one way street.

[Lucky mike]

So what right of entry does a landlord have ? Can they enter and take fruit and veg growing there ?

[brucegoniners]

They kind of ruined it with the 5 or more properties stipulation.

 

I’ve been a landlord and a renter and every landlord screwed us in some way (all Thais of course).

 

However the rule that allows people to bolt on one month’s notice isn’t fair to landlords. A lease is signed for a reason. Normally if you violate the lease you forfeit your security deposit. That’s only fair.

[mike324]

As a landlord with a handful of properties in Bangkok, I think some of the new laws are unfair.

 

Return security deposit after 7 days? Water, electricity, tv/internet bills usually don't come in after 7 days they move out, unless it just happens to fall right on time. Majority of times it does not, most tenants don't know how much to pay until their last water/electricity bill. Often times I have to deduct the security deposit (on the request of tenant, since most have moved abroad, and do no wish to transfer money).

 

Security deposit of 1 month I can live with, since most damages are wear and tear, and unless the tenant tears the house down, small fixes usually cost couple thousand.

 

Written notice of 30 days is too short - on average it takes 1-3 month to find a new tenant. Plus most tenants would not accept to move out after 30 days as well if the landlord wants them to. So a 2-3 month notice is more fair for both sides. Also agents usually takes 1 month rent as agent fee, so its not fair if the tenant moves out less than a year. 

 

I think penalizing the landlord with a heavy fine for not returning deposit after 30 days would be better as protection for tenants, since you hear so many stories about landlords not returning.

[alex8912]

12 minutes ago, tomster said:

One month is the standard deposit in the UK for example, the 2 months deposit normally done here is unreasonable. It seems to exists so agents can charge a full month commision which on properties worth more than 10k is quite frankly ridiculous.

 

One month deposit and an agency fee is much more realistic, anything that moves the market towards this is a positive move.

I disagree. A first month rent a last month rent AND a one month security deposit are fair to charge. I actually doubt just one month is normal in the UK especially in a transient area like London . What many tenants think is ok when just first month rent and a one month security deposit is taken is that when they decide to leave they don’t pay their last month rent and think that the security deposit will/ can cover it. That is complete BS and there would be no reason for a security deposit in the beginning if that was ok.  There is sometimes damage that would need to be deducted and sometimes there is none. A thirty day period for the landlord to pay back the deposit is also fair but I do believe if it is not paid back within 30 days then the landlord should pay a penalty. As for an agency fee what is wrong with that? If you really find a great apartment that fits all your needs then just pay it and live in the place two or three years or more.  It is a one time fee and  the agent has to do work in order to rent it and prepare lease etc. Some people look at 15 or more apartments with an agent then complain about a fee!  Sometimes it takes just one or two viewings of places and you find your dream home ( then you saved yourself A LOT of time and should be happy to pay the agents fee). 

Many foreign and Thai renters here especially in Pattaya, Bangkok and Chiangmai are just not the best and some are wonderful. Landlords are the same but many times you don’t even deal with a landlord just the buildings staff here and that is convenient. Some landlords are great too. It’s a two way street but many posters on TVF come out on these rental threads and show their true ugly colors ( not you) and they are just crappy people in general and crappy tenants as well. 

[mogandave]

I think the 30 day's notice is reasonable, assuming the tenant forfeits the security deposit. 

[smutcakes]

3 minutes ago, mogandave said:

I think the 30 day's notice is reasonable, assuming the tenant forfeits the security deposit. 

And the landlord can give you 30 day notice and return SD?

[alex8912]

5 minutes ago, mogandave said:

I think the 30 day's notice is reasonable, assuming the tenant forfeits the security deposit. 

I hope you mean they pay their  last month rent ( after giving the 30 day notice) and the security deposit of one month rent is used as a early termination/ lease break fee. If that’s not what you mean then I call BS! 

Edited February 27, 2018 by alex8912

[Destiny1990]

Why both parties sign a one year lease if one party is allowed to cancel only  with a 30 days written notice without any financial damage compensation to the landlord?

 

[Hooliganzone]

3 hours ago, dotpoom said:

"Additionally, a tenant now has the right to terminate their contract at any time, providing they give 30 days written notice to the landlord."

     So what's the point of having a contract at all for more than 30 days?

I agree...No point at all, 30 day contracts from now on lol what a load of crap.