Pattaya Lease Question--one Year's Rent In Advance

[gguy]

Hi,

I noticed a nice apartment that wanted the full rent for one year plus security deposit paid upon lease signing.

I talked to the owner and he claims that many tenants have abused him in past by destroying property, failure to move out, etc.

I wonder if any else has run across such a practice in Pattaya.

Is there any legal want to protect the tenant in this type of situation? For example, can the lease be recorded with the local Thai officials. Would this serve as notice to potential buyers of a prepaid lease on the property? Could the tenant file a lien on the property?

To me this seems like a very big risk. A fool and his money are soon parted in Thailand.

Your experiences and possible ways to setting up the transaction to protect the tenant would be welcome.

I am totally ignore of Thai real estate law and practices.

Thanks

[patklang]

Wouldnt realy call it a lease.The guy wants a long term tenant,hence he wants a 1 year agreement wherby he gives a good rental price for a yearly contract,with a 2 month deposit,returnable when you leave.

This is common practice in Pattaya,but be aware of any damages and make a note with a signature off the owner to agree this.Also do an inventory,making a list of all items in the house and again,get the owner to agree and sign.

[Asianrider]

If you're paying him a security deposit, it is unreasonable to demand the whole year's rent in advance. If you have subsequent repair problems you may find the landlord is not so quick off the mark.

[plasticpig]

Don’t pay up front for a year.

If you get a problem he will not sort it out as he has your money already.

Plenty of houses and condos in pattaya to chouse from

Don’t do it., you will get ripped off

Don’t listen to his Bs.

[Guderian]

I've been renting here for 5 years and have never heard of anyone paying a full year's rent in advance, PLUS the security deposit!?! As already said, you'll potentially be exposing yourself to all sorts of problems. What if the neighbours turn out to be noisy antisocial sods - you've lost the option to just walk out. Really, you would cost yourself so much flexibility this way that it would be daft unless you were 110% sure about the room and the owner.

IF you did go this way, get a lawyer to check the lease wording with a fine tooth comb. Better yet, use an independent lawyer/agent to make the lease and maybe also to hold the deposit.

[tigerbalm]

Hi,

I noticed a nice apartment that wanted the full rent for one year plus security deposit paid upon lease signing.

I talked to the owner and he claims that many tenants have abused him in past by destroying property, failure to move out, etc.

I wonder if any else has run across such a practice in Pattaya.

Is there any legal want to protect the tenant in this type of situation? For example, can the lease be recorded with the local Thai officials. Would this serve as notice to potential buyers of a prepaid lease on the property? Could the tenant file a lien on the property?

To me this seems like a very big risk. A fool and his money are soon parted in Thailand.

Your experiences and possible ways to setting up the transaction to protect the tenant would be welcome.

I am totally ignore of Thai real estate law and practices.

Thanks

Is it a lease agreement or a rental agreement, as i believe there is a difference between the two.

Normally one would negotiate a lower lease or rent by paying one year or even six months up front and i would imagine if a tenant refused to move out they would be breaking the Lease/rental contract so the land lord could easily remedy this by getting the water/electric cut off.

Obviously this only applies if like me the landlord retains water/eletric in his name and i pay it in to his bank monthly.

What is the deposit two months or three is quite common.

It might also be a good idear to search the forums i seem to remember on the Chiang Mai forum a week or two ago a poster had a problem concerning his landlord and getting his deposit back..interesting post.

I am sure you will have many more help full replies here by some very knowlagable people on the subject

[MeetJohnDoe]

It is not unreasonable to pay up to a year in advance if in return, you get a discount on the rent...at least 10% I would say. Like others have said, make sure you do a through check of the unit/furnishings and make an inventory of everything and their condition and have the owner sign-off on it. Also, agree on who is responsible for any repairs that may be necessary during the tenancy.

I don't think you can record a real estate lease contract unless it is for 3 years of more. Like others have said, unless you know the area or speak to people already living there (or just hang-out there for a couple days/nights for a little while) you will not know about any noise or other nuisences that may be persent. Try to check these out beforehand.

Finally, be sure you are making an agreement with the person who actually owns the property or has the legal right to sub-lease it. Have the house book and ID card of the owner checked to be sure you know who you are dealing with.

[patklang]

It is not unreasonable to pay up to a year in advance if in return, you get a discount on the rent...at least 10% I would say. Like others have said, make sure you do a through check of the unit/furnishings and make an inventory of everything and their condition and have the owner sign-off on it. Also, agree on who is responsible for any repairs that may be necessary during the tenancy.

I don't think you can record a real estate lease contract unless it is for 3 years of more. Like others have said, unless you know the area or speak to people already living there (or just hang-out there for a couple days/nights for a little while) you will not know about any noise or other nuisences that may be persent. Try to check these out beforehand.

Finally, be sure you are making an agreement with the person who actually owns the property or has the legal right to sub-lease it. Have the house book and ID card of the owner checked to be sure you know who you are dealing with.

Good points made.

I cant believe that some posters have never heard of a 1 year contract partly to reduce the monthly rent.I have had 2 here in Pattaya and the first thing i did when i looked at the house was to chat with people around the place.Secondly i rented for 1 month with a view for a 1 years rental contract.Over 2 years i saved over 96,000 baht and got my deposit back no problem.

[pattaya_girl]

Its ok if you know the person whom you are renting from, but if you dont know them, a Year Rent up front is a bit cheeky. 3 Months sounds more like it, but not a Year...

[DonTron]

I paid a year full rental in Bangkok some years ago, and managed to get a HUGE discount by doing do.

But if you pay a full year for full price INCL. deposit - then you are a suckser :-)

[Meg_2003]

Be careful whatever you do, I have never heard of anyone having to pay so much up front before. Me, I paid a deposit of 20,000 for my house. Be careful.

[jbaldwin]

This is not usual. However, a friend of mine offered to pay 1 year up front in exchange for a 20% reduction of the rent. This offer was accepted.

[NanLaew]

There is no way I would consider a 1-year in advance payment even with discounted terms but this one smells bad. There's just too much potential to get shafted on the deal. The bottom falls out of the market in 6-months and you are stuck. The OP's potential landlord cites a bad track record with previous tenants... what's the common denominator here? Possibly a dodgy landlord? Destroying property is what security deposits are all about. Failure to move out may be due to a dispute about money owed by tenant OR services not rendered by landlord. Is this landlord drafting a formal renters agreement with clearly defined deliverables for each party? IMHO he sounds like an aggrieved and greedy individual.

The maximum I would consider is 1 month in advance for your bog-standard, cookie-cutter residence/condo and 3 months maximum for any really desirable, up-market place. Last time I looked, this was Pattaya and 12 months in advance is for dreamers and losers.

Edited May 9, 2009 by NanLaew

[ericg1953]

I have done many leases for 1 year with the rent paid upfront. Alot of the tenants are not here all the time like the guys working offshore in the oil biz and they prefer to take a good discount and pay the year upfront. That being said the condos they rent have paid up maintenance so there isnt a chance of getting stuck in a situation where repairs need to be done and the owner isnt around or isnt cooperative.

[gguy]

I passed on the apartment.

I suppose if I knew the owner it might be OK. But without any knowledge, it seems like a big risk. You don't have any legal recourse in Thailand. It nice to know if the apartment becomes a real problem for any reason, the most your out of pocket is the security deposit and last month's rent.

I found another apartment in the same building. It is much bigger but the appliances are old.

It will be interesting to see if the apartment rents with the one year provision.

[MeetJohnDoe]

There is no way I would consider a 1-year in advance payment even with discounted terms but this one smells bad. There's just too much potential to get shafted on the deal. The bottom falls out of the market in 6-months and you are stuck. The OP's potential landlord cites a bad track record with previous tenants... what's the common denominator here? Possibly a dodgy landlord?

I think you are much to negative about paying in advance. I am not talking about this particular case but in general. Basically, the parties are computing the present value of a stream of future payments to their present value. This can benefit both as the owner gets his money up front (albeit less than if he received periodic payments through the year) and he can spend or invest the money immeditely as he see fit; and the renter pockets a substantial savings on his rent.

Many owners may have cash-flow issues and are happy to receive a lump-sum rent payment in advance in return for a discount. This is very common in Bangkok and Pattaya (around the world really) and can be a win-win for both parties. As to your statement about the market tanking (rents going down in the future) that's a risk...but they could also go up too (not likely in this environment but in more normal economic/political times and so this risk is taken by both parties...just in opposite directions.

Of course, the key is to have a honest landlord (they actually do exist in Thailand), a sufficient discount to make the deal attractive (lost alternative opportunity cost), and a proper rental/lease contract.

[Basil B]

I would be concerned if the terms were to pay 1 year up front as it normal just to pay 1 month with 2-3 months rent held as a deposit.

Unless the owner is not going to be around to collect the rent every month why does he want a years money up front? possibly he's got money problems and could sell the property and you could end up being turfed out by a new owners heavy's...

It is still normal to get a discount for long term rental even paying monthly, if someone who got a good discount and pulled out early then it is only reasonable that the owner should withhold the difference from the deposit.

[plasticpig]

To the Op, look mate most people have a vested interest in pattaya that write

on this forum, So read between the lines.

Please remember, pattaya has loads of empty condos and houses all over town.

You can get great deals, with out stupid stuff like giving some tw@t the full whack up front, Only to be disappointed down the line when some thing goes wrong.

And please remember, you have no control, over who lives next door.

You could have a nightmare for a year with the, Guy, Girl, Family, Drug dealer,

next door. It could cost you a load as well, if you like a bit of confrontation.

Over , Noise, dogs, Kids, drunk Thaïs on weekend benders.

Always a laugh.

Just to save 10%, 20%, don't be a mug.

This is the time to strike great deals, with very little money up front.

You don't need to leave your self open like that.

Go strike a deal, away from the estate agents and the like.

Because there is not many people to rent property to at present.

Edited May 9, 2009 by plasticpig

[mamanoodle]

Have heard a couple of horror stories relating to this topic, first one paid 6 months rent +deposit up front 2 weeks into the rental the bank reposessed the property, Thai owner, second paid a year up front allegedly with discount and no deposit but it was the the current tenant, a farang, who gave a legit looking rental agreement. Also a lot of pay rent up front, as mentioned in a couple of previous posts, usually means little or no maintenance as money is paid already, as with most things here it is a case of buyer beware!

[NanLaew]

... why does he want a years money up front? possibly he's got money problems and could sell the property and you could end up being turfed out by a new owners heavy's...

Have heard a couple of horror stories relating to this topic, first one paid 6 months rent +deposit up front 2 weeks into the rental the bank reposessed the property

This is the basis of my strong argument against such a large deposit. My sister had a landlord (in Lancaster, UK) demand 1-year up front for the very same reasons the OP's tentative landlord did. Despite being desperate for a roof over their heads (divorced single mum with 2 teenage kids), she resisted and found a better deal on a smaller, older house. Later, she found out that the guy was a late entrant in the 'buy-to-let' game and ended up losing all 4 properties with his remaining 3 tenants turfed out as well. Maybe that 1-year deposit would have bailed him out. Maybe not. I wouldn't risk MY money on someone else's bad fiscal planning.

There's bound to be some with very stretched resources in the Pattaya property market as well and this guy sounds like one of them. Moot point anyway as the OP says he found another place and all he needs is to fork out for new appliances which you can always take with you!

Edited May 10, 2009 by NanLaew

[Tolley]

To the Op, look mate most people have a vested interest in pattaya that write

on this forum, So read between the lines.

Please remember, pattaya has loads of empty condos and houses all over town.

You can get great deals, with out stupid stuff like giving some tw@t the full whack up front, Only to be disappointed down the line when some thing goes wrong.

And please remember, you have no control, over who lives next door.

You could have a nightmare for a year with the, Guy, Girl, Family, Drug dealer,

next door. It could cost you a load as well, if you like a bit of confrontation.

Over , Noise, dogs, Kids, drunk Thaïs on weekend benders.

Always a laugh.

Just to save 10%, 20%, don't be a mug.

This is the time to strike great deals, with very little money up front.

You don't need to leave your self open like that.

Go strike a deal, away from the estate agents and the like.

Because there is not many people to rent property to at present.

Sound advice.

Why potentially put yourself in a vulnerable situation,

[midas]

Hi,

I noticed a nice apartment that wanted the full rent for one year plus security deposit paid upon lease signing.

I talked to the owner and he claims that many tenants have abused him in past by destroying property, failure to move out, etc.

I wonder if any else has run across such a practice in Pattaya.

Is there any legal want to protect the tenant in this type of situation? For example, can the lease be recorded with the local Thai officials. Would this serve as notice to potential buyers of a prepaid lease on the property? Could the tenant file a lien on the property?

To me this seems like a very big risk. A fool and his money are soon parted in Thailand.

Your experiences and possible ways to setting up the transaction to protect the tenant would be welcome.

I am totally ignore of Thai real estate law and practices.

Thanks

I'm curious to know if you have been dealing with someone I once came across?

I don't think there are many owners in Pattaya that come up with this bullshit so

did this guy happen to be from Switzerland by any chance and did he describe himself as Dr xxxxx?

He also said he was formerly a judge back in Switzerland ( i checked this out and

no one had heard of him in Switzerland) as well as a Col. in the Swiss Army?

If this is the same person he is not the owner-he is the representative of several owners

and my advice is to proceed with care

[JR Texas]

Have heard a couple of horror stories relating to this topic, first one paid 6 months rent +deposit up front 2 weeks into the rental the bank reposessed the property, Thai owner, second paid a year up front allegedly with discount and no deposit but it was the the current tenant, a farang, who gave a legit looking rental agreement. Also a lot of pay rent up front, as mentioned in a couple of previous posts, usually means little or no maintenance as money is paid already, as with most things here it is a case of buyer beware!

Given that the immigration rules could change tomorrow making it impossible for most of us to live here, I don't understand why people continue to sign long term leases and put down big deposits. It is a buyers market......just tell them where to go and move on to the next place.

[Jingthing]

When I was a crazy kid and no landlord in their right mind would rent to me, I got a place by offering to pay six months in advance. Later, the landlord still wanted to evict me ... don't ask ... (OK, it had something to do with too many "gentleman callers")

Bottom line, if you love the apartment and that's what the landlord demands, take it or leave it, but I would never do it unless I had to.

Edited May 11, 2009 by Jingthing