Our tenants run a restaurant. Should we keep them or finish the contract?

[ubonr1971]

Im trying to make a decision as to whether or not keep our tenants or replace them. 

 

They started renting our 3 storey building 4 yrs ago. They have a busy successful restaurant. Its in prime location in our city right opposite the shopping centre

 

Positives:
- They didn’t cancel the contract during the quiet covid years
- Friendly enough. They are well off financially and travel to Europe. But not stuck up and pretentious. 
- Pay rent on time. Never defaulted on the rent. 
- Now we get 59k a month. 
- Most of their staff are from Cambodia. Very friendly to me when I do inspections. 

Negatives:
- All their staff live in the upper 2 floors. The place is really dirty but normal I suppose
- We installed a new fire alarm in Jan. At a recent inspection I was pissed to see it was unplugged. Tenants assure us it will be on all the time from now on. 
- We worry about gas explosion/ fire. They have a line of gas cookers in the kitchen. Also a cooking area in the section where the guests sit at the tables. I read online that this is illegal in Thailand. If you own a restaurant here could you please comment. 
- I drive past the building several times a day bc our land is nearby. I rarely see them inside. We think they are never there. They have several other restaurants and a hotel. I probably see him in there once a month at our building

 

We pay 50% each on 2 insurance policies. 1 for fire /explosion damage to our building. 1. For 3rd party damage to neighbours building

I suppose Im worried what happens if, in worse case scenario, gas bottle explodes in dining area with many fatalities. Ins polices might pay out for damage to building’s. If tenants don’t play ball and we have to take them to court, it could take years. Currently the contract is with them personally. But this year they changed to company structure. If we renew the contracts should we do contract with their company or keep to personal names? If you have experience with this in Thailand NOT your western country please make a comment. 

Does anyone know if a permit to operate gas cooker is required at a restaurant in Thailand or does it come with the general license issued by the local govt dept?

 

At the end of Aug’, this month, we could give them 4 months notice to terminate the contract and they are out at the end of Dec. I think its safer to rent to a motorcycle shop or a furniture outlet for example. Im seeing on the news gas explosions all the time. Warehouses, buildings and houses on fire. 

 

Am I thinking too much about this. Thai landlords probably would not give a crap about the risks. My wife doesn’t care. She says leave them alone. TIT. Should I just put my head in the sand as well??

 

New tenants could be double trouble. Just don’t know what you get when tenants first move in. 

 

Whats your opinion. What would you do in this situation getting 708,000 a year in rent for a high risk business? Or do you think its low risk. Gas bottles rarely explode.....
thanks

[JBChiangRai]

They are good tenants, you owe them some loyalty
 

if you’re worried about the fire risk, ask the insurance company to inspect and recommend any action points

[mogandave]

I agree, the pay the rent and if they’ve been in for four years you’d have to renovate if they moved. 

 

Virtually every restaurant in Thailand has gas cookers everywhere, and there are not many fires. 

 

You’re insured, yes?

 

Stop looking when you drive by. 

[BakedPanda]

 Why would it even be relevant if the owners are rich or not, or if they want to 'show off' according to 'your stereotyping' or not. And you even get paid all the time in time.

[ujayujay]

consult the psychiatrist you trust, lol

[jippytum]

I think you have a good income from people with a good business. Have the insurers check if the bottles should be relocated to a safer location within the property. 

[digbeth]

it's gas cooker on the patron's table like Moo Krata or Korean BBQ restaurant that's illegal, due to spate of fires in restaurants of that type in the 90s, they used to be plumbed in on rubber hose and split to each table, small leak and boom. 

 

these days some restaurant try to sneak in using portable gas bottle, those are  illegal too supposed to be electric only now

 

if it's only cooking hobs and not actually at the dining table, it's not illegal

 

as long as they pass restaurant permit, why bother?

[brianthainess]

15 hours ago, ubonr1971 said:

Negatives:
- All their staff live in the upper 2 floors. The place is really dirty but normal I suppose

Ask them to clean it ! have you ? and tell them you want it clean on your inspections presuming you give them notice when you are coming to do an inspection, do you ? or you will send them a cleaning bill. At 59K a month you could afford to pay 1k for a cleaner yourself. 

[Scouse123]

I've seen you make comment and ask advice on this previously in threads gone by, I remember your previous thread, and my answer is the same as it was last time.

 

It's none of your business, and you are just occupying yourself being a busybody. Equally, their other businesses or trips to Europe are not your business either.

 

You're the guy that can't sit at home and watch Netflix, you feel obliged to jump on your motorbike and go spying all the time.

 

You have good tenants that pay on time.

 

Nearly every single restaurant in Thailand has gas bottles around and in the open. The risks are minimal.

 

Why don't you listen to your wife, instead of creating problems which aren't there?

 

The way you carry on like an old woman, you don't deserve decent tenants.

[ThaiFelix]

Living off the proceeds of hard working/rich Thais?  Im sure theres a hefty fine in there somewhere, its supposed to be the opposite?

[Brn2Trvl]

Sounds like you should invest in a lawyer for advice rather than rely on know-it-all opinions you'll get here.

[NoDisplayName]

Staff live there?  They rented the building.  Anything in the contract preventing them from having staff accommodation in the building they're paying for?

 

Rewire the fire alarm so it can't be unplugged/disabled by tenants.

 

Contact city health/business inspectors to get actual law pertaining to gas cookers.  Pay for an inspection.  Don't "do your own research" online.

 

Write any new contract to cover the specifics of gas cookers according to paragraph above.

 

Find a new route to/from your property.  Don't drive by the rental several times a day.

[Dan O]

16 hours ago, ubonr1971 said:

Im trying to make a decision as to whether or not keep our tenants or replace them. 

 

They started renting our 3 storey building 4 yrs ago. They have a busy successful restaurant. Its in prime location in our city right opposite the shopping centre

 

Positives:
- They didn’t cancel the contract during the quiet covid years
- Friendly enough. They are well off financially and travel to Europe. But not stuck up and pretentious. 
- Pay rent on time. Never defaulted on the rent. 
- Now we get 59k a month. 
- Most of their staff are from Cambodia. Very friendly to me when I do inspections. 

Negatives:
- All their staff live in the upper 2 floors. The place is really dirty but normal I suppose
- We installed a new fire alarm in Jan. At a recent inspection I was pissed to see it was unplugged. Tenants assure us it will be on all the time from now on. 
- We worry about gas explosion/ fire. They have a line of gas cookers in the kitchen. Also a cooking area in the section where the guests sit at the tables. I read online that this is illegal in Thailand. If you own a restaurant here could you please comment. 
- I drive past the building several times a day bc our land is nearby. I rarely see them inside. We think they are never there. They have several other restaurants and a hotel. I probably see him in there once a month at our building

 

We pay 50% each on 2 insurance policies. 1 for fire /explosion damage to our building. 1. For 3rd party damage to neighbours building

I suppose Im worried what happens if, in worse case scenario, gas bottle explodes in dining area with many fatalities. Ins polices might pay out for damage to building’s. If tenants don’t play ball and we have to take them to court, it could take years. Currently the contract is with them personally. But this year they changed to company structure. If we renew the contracts should we do contract with their company or keep to personal names? If you have experience with this in Thailand NOT your western country please make a comment. 

Does anyone know if a permit to operate gas cooker is required at a restaurant in Thailand or does it come with the general license issued by the local govt dept?

 

At the end of Aug’, this month, we could give them 4 months notice to terminate the contract and they are out at the end of Dec. I think its safer to rent to a motorcycle shop or a furniture outlet for example. Im seeing on the news gas explosions all the time. Warehouses, buildings and houses on fire. 

 

Am I thinking too much about this. Thai landlords probably would not give a crap about the risks. My wife doesn’t care. She says leave them alone. TIT. Should I just put my head in the sand as well??

 

New tenants could be double trouble. Just don’t know what you get when tenants first move in. 

 

Whats your opinion. What would you do in this situation getting 708,000 a year in rent for a high risk business? Or do you think its low risk. Gas bottles rarely explode.....
thanks

You need to make sure they have correct licenses especially alcohol. A violation on that license if gone uncorrected can lock your property up and prevent you from use until corrected for up to 5 years. 

 

Good that you have insurance on the bldg for damages. Im sure you've checked out to make sure you're coverage isn't compromised by 3rd part use.

 

[NativeBob]

increase rent 3 folds or request 35% share of profit. Do what thais do

[soi3eddie]

16 hours ago, ubonr1971 said:

Gas bottles rarely explode.....

 

Yes, that is true. A gas bottle won't explode on it's own unless it was engulfed in an inferno already. The biggest risk is that one of the supply lines to the cookers/hobs was to leak. This could lead to a build up of gas in the building. At the right concentration, one spark and BOOM! That would be my biggest worry. As others have suggested, ensure that the restaurant apparatus is inspected periodically by any safety/licensing body (if that's even a thing in Thailand). 

 

[BusyB]

1 hour ago, Brn2Trvl said:

Sounds like you should invest in a lawyer for advice rather than rely on know-it-all opinions you'll get here.

 

And it strikes me as a bit late to be asking here for advice when the lease is due up in 7 days or so anyway.

[KhunLA]

Only read 1st part of OP.  So your crying about having good tenants.   Does boggle the mind.

[digbeth]

I'd be more concerned about them installing proper grease traps if they're running restaurants rather than gas

and making sure neigbours aren't bothered by extractor vents

[connda]

I have a gas bottle in my kitchen.  Most homes in Thailand have a gas bottle in the areas where they cook.  In the entire 17 years I've lived here, I've never hear of a gas bottle spontaneously exploding.

Can you break your own contract?  Well kick them out.  Best of luck finding another tenant.

[connda]

12 minutes ago, KhunLA said:

Only read 1st part of OP.  So your crying about having good tenants.   Does boggle the mind.

Yep - exactly.

[ChrisKC]

The positives you mention are very good for you and probably the most important!

 

The negatives are some "what ifs"

 

The balance is very much in your favour to continue - with a few minor adjustments through communication!

[JimTripper]

Sounds like you are fishing for a reason to not be a landlord or rent the place out. Could be a territorial mindset (you looking in, frequent thought rumination, etc) or an envy problem that they are doing well (you mention their other businesses, etc).

 

I would say it's envy most likely. You feel like you need to protect what's yours more, because of the threat of them doing better and symbolically taking what's yours. Related would be wanting to increase the rent because they are doing so well, so what is theirs becomes yours in a way.

[Gottfrid]

@ubonr1971 You have a contract with people who are making good business. As long as they rent, you should not care about how it looks or what they do as long as it´s legal business, which restaurant with a license is. The only time the state of the building is relevant, is when they leave. Hope you have stipulated how to do with that in your contract.

Just let them be, and let them continue rent. Why would you want to crash their business. That´s just mean and pure evil! They are paying you an unreasonable rent of 59k per month, so you should just stay quiet and happy!

Regarding their company registration. Of course you should rent write the contract with the company, as that is the business that are renting from you.

After that, you need to find something to do and stop spying on your tenants.

I also hope that all your papers are in order and that you are doing your books and paying your taxes. If you don´t have a company and rent out private, means your wife is the owner of the building, which means she rent it out. If she says ok, you have no voice! Also, if you do inspections without a work permit, which you can´t get without a company and your wife as well as minimum 1-2 employed Thais, then you are working illegally. 

[xtrnuno41]

Talk to lawyer.

Make with new contract a section where you state, they are responsible for all damages in case something is going wrong. Of course, as they are good tenants, notify them on this new section.

As they should follow restaurant regulations, if there are in Thailand.

DO you have proper electrical installation? As that one is yours. Fuses with RCBO and ground.

Thai ( well many people) dont take that serious and just do what they please with electrical wiring.

[SportRider]

19 hours ago, JBChiangRai said:

They are good tenants, you owe them some loyalty
 

if you’re worried about the fire risk, ask the insurance company to inspect and recommend any action points

100% this.  Fix the issues but keep the tenants. They sound loyal - you could end up with a lot worse. 

[jimn]

Stop worrying. Even if there was a fire I doubt if it would cause permanent damage. Don't forget the construction of houses over here, any damage can be easily repaired the contents replaced.

[kidneyw]

Why not talk to them directly about your concerns.

[CHdiver]

20 hours ago, ubonr1971 said:

I drive past the building several times a day bc our land is nearby.

Keep the tenant and sell the land. No reason anymore to drive by the building several times a day. 😎

[ubonr1971]

4 hours ago, Gottfrid said:

Also, if you do inspections without a work permit, which you can´t get without a company and your wife as well as minimum 1-2 employed Thais, then you are working illegally. 

I have a WP and we dont have a company structure. Many foreigners here do this. In fact I recently read a comment about a guy in Chiang mai thereabouts who is applying for citizenship. 

 

Respect your other comments above and agree with most of it. 

cheers

 

 

 

[ubonr1971]

3 hours ago, xtrnuno41 said:

Talk to lawyer.

Make with new contract a section where you state, they are responsible for all damages in case something is going wrong. Of course, as they are good tenants, notify them on this new section.

As they should follow restaurant regulations, if there are in Thailand.

DO you have proper electrical installation? As that one is yours. Fuses with RCBO and ground.

Thai ( well many people) dont take that serious and just do what they please with electrical wiring.

Yes we did new wiring when I renovated it 5 yrs ago. We have a clause covering our butts as you say above. But unsure how this works if we renew contract with their company structure