Rental contract says tenant pays ALL taxes?

[creative1000]

Just read the rental contract (haven't signed!) for a commercial shophouse, and it appears to have many hidden costs - like paying all the taxes and any other building-related costs. The townhouse claims to be worth 7.5 Million Baht. I've heard local rental tax is 12%, and property tax is around 2-3%, that will be more than what they are charging for rent. No wonder the rent appeared too good to be true....

Is this a sneaky contract, or is this normal for an office/commercial space?

Contract clause translated with Google Translate:
"Throughout the leasing period the Lessee is responsible for water, electricity, telephone charges, internet charges, waste collection, rental tax, fire insurance, local tax, building tax, bill, or any other expenses the property may have incurred. The tenant is responsible for all payments immediately in the event of fire insurance. The tenant must have fire insurance for the building. In an amount not less than 4,000,000 baht (four million baht) In which the Lessor is the beneficiary starting on the commencement of the lease agreement. And will result in protection until the end of the contract"

[86Tiger]

Contracts are negotiable and of course the "Lessor" is going to squeeze all he can.  Anything you do not agree strike out and return to landlord for revision.  If the terms are not to your liking walk.

 

 

Good on you for reading, too many sign what ever is put before them and cry when they realize what they signed.

[worgeordie]

12 minutes ago, creative1000 said:

any other expenses the property may have incurred

If it falls down you pay.....I would not be signing that lease,

plus YOU have to insure the premises for fire,but landlord

receives the money. in short they want you to pay for everything

related to the premises.

regards worgeordie

 

[creative1000]

6 minutes ago, worgeordie said:

If it falls down you pay.....I would not be signing that lease,

plus YOU have to insure the premises for fire,but landlord

receives the money. in short they want you to pay for everything

related to the premises.

regards worgeordie

Thats a great point. The owner would collect all the fire insurance, and the tenant would still be liable to replace the entire building from their own pocket. The owner would win 2x.  And, I guess I'd lose my deposit too, lol...

 

[rumak]

3 minutes ago, creative1000 said:

Thats a great point. The owner would collect all the fire insurance, and the tenant would still be liable to replace the entire building from their own pocket. The owner would win 2x.  And, I guess I'd lose my deposit too, lol...

 

Hint:  if the owner has a big thai smile and says mai pen rai more than once during negotiations, RUN.

         You sure you want to do business here ?      ( add this to  "you sure you want to get married" and "you sure you want to build that big house"   and .......... )

[Antonymous]

I have rented dozens of commercial and residential properties and have in every case had to rewrite the 'standard contract' initially presented by the owner/landlord. That Clause about the tenant being responsible for property and fire insurance is the first one to go!

 

I've only had two cases where the owner refused to have the contract changed and of course I walked away and found another property.

 

The owner should be responsible for building and fire insurance. The tenant responsible for maintaining the property in a suitable condition and (optional) for their personal contents insurance.

 

 

[creative1000]

@Antonymous Thanks for sharing that. I'll have a rethink if this property is worth the haggling. In your contracts, have you, the tenant, been responsible for taxes?

[Antonymous]

4 minutes ago, creative1000 said:

@Antonymous Thanks for sharing that. I'll have a rethink if this property is worth the haggling. In your contracts, have you, the tenant, been responsible for taxes?

No, never. You negotiate a fixed rental amount and period (1 year/3 year/longer) and terms of renewal and the owner/landlord has to consider their own expenses and factor these into the amount of rent set.

[patrick228]

According to the OP, it is a commercial (shop house) rental lease. Among others, 2 keys elements: the lessee (tenant) is expected to pay (1) all taxes and (2) fire insurance.

 

Several standard templates of rental leases are available for free download from internet, including this one relating to the lease for building. This standard template apparently indicates that it can be a common local practice to "expect" the lessee to pay for the taxes and fire insurance. 

 

https://thailawonline.com/en/thai-laws/free-contracts-and-documents.html

 

However, it is usually different for the residential lease as commonly, the lessor (owner) is responsible for all taxes and the fire insurance premium.

 

To verify, you should try to contact some reputable real estate agencies and ask them the general questions about the lease terms for shop house.

 

Knowing the local and common practice, you should negotiate the terms that suit you. Counter-offer the terms if you want the certainty of a fixed amount of total rental costs.
 

[Antonymous]

31 minutes ago, patrick228 said:

According to the OP, it is a commercial (shop house) rental lease. Among others, 2 keys elements: the lessee (tenant) is expected to pay (1) all taxes and (2) fire insurance.

 

Several standard templates of rental leases are available for free download from internet, including this one relating to the lease for building. This standard template apparently indicates that it can be a common local practice to "expect" the lessee to pay for the taxes and fire insurance. 

 

https://thailawonline.com/en/thai-laws/free-contracts-and-documents.html

 

However, it is usually different for the residential lease as commonly, the lessor (owner) is responsible for all taxes and the fire insurance premium.

 

To verify, you should try to contact some reputable real estate agencies and ask them the general questions about the lease terms for shop house.

 

Knowing the local and common practice, you should negotiate the terms that suit you. Counter-offer the terms if you want the certainty of a fixed amount of total rental costs.
 

 

I must point out that nobody should ever rely on free downloadable contracts. They are at best generic (not pertinent to your exact circumstances) and at worse, give wrong wording or most often leave out Clauses that should be inserted.

 

Some of the very worst contracts I have seen are available at some local shop, printed up ready to sign. These are what Thais refer to as 'standard contracts'. Some people accept them due to lack of experience and education (they don't really understand them) and some because they know how one sided they are and the loopholes they contain and wish to take advantage of that.

 

Standard contracts for buildings and land (standard land contracts are woefully inadequate) can and should be carefully studied and then changed as necessary. Usually anyone with common sense can see what the potential dangers are. And in most cases in my own experience the sellers/owners/landlords also understand and accept reasonable changes without argument. You may have to help them along with the process. Get the new bilingual contract typed up and ready for them to sign, rather than leave the burden to them.

 

 

[Deli]

They try all the time, don't sign and talk to the landlord about it. It you cannot come to a reasonable agreement and if you aren't deperate to get into this particular building, move on. It's a buyer's market now.

[khunPer]

If me, then I would look for another place/house to rent...

[bbabythai]

1 hour ago, Deli said:

They try all the time, don't sign and talk to the landlord about it. It you cannot come to a reasonable agreement and if you aren't deperate to get into this particular building, move on. It's a buyer's market now.

but this thread is about renting not buying