Commercial Lease

[pj123]

I have never done something like this here or back home so excuse the ignorance. What do I need in order to sign a commercial lease for an office building? For example, a five year lease. What kind of deposit? Do I need to have a credit history that can be checked? A work permit? Do I need to setup a company? My wife is Thai, so we could do everything in her name. Thanks.

[monty]

It's a bit of a grey area legally.

Never heard of a credit history check, deposit is up to the owner of the building, although there are legal guide lines.

The problem is that legally, if you make signatures for a commercial reason you are supposed to have a work permit.

This is something which will not be asked however, BUT if ever something goes wrong it might bite you in the back!

As an example, my friend signed for the insurance of his car, which was registered in his company name. He is a director in that company and (luckily) holds a work permit.

He totals his car. Claims with insurance. Suddenly insurance company asks for a copy of his WP (they didn't know he had one, didn't ask either when he signed up and paid!). Which he was able to give.

Asking why they needed it, they clearly stated that if he did not had a work permit AND they could prove he was in Thailand while signing the contract, they could legally get out from paying the claim as his signature was considered not valid.

Very very small chance you'll ever have a problem though, obviously insurance companies are known to be able to use the slightest (f legal) reason not to pay out claims...

Also note that commercial leases are required to be registered at the Land and House department (and tax paid), regardless of the length of the lease (non commercial lease is only required to register when longer then 3 years).

Lots of landlords will say not necessary (so they can avoid tax), but again something that might bite you later when problems might arise...

[samILO]

Dear PJ123,

YOu don't need a credit record or WP or company to sign a lease. A 5 years lease though has to be recorded at the land department to be valid against 3rd parties, otherwise you can loose the lease if the Lessor is bankrupt, sells the property or looses it through court order or dies. BEst would be to consult a lawyer or law firm on the matter and have them do due diligence on the property too.

Sam

[quiksilva]

Credit history is not a requirement, this is why they ask for a security deposit of 3 months, and lease terms in office buildings are typically for three years, unless its a serviced office arrangement where terms can be shorter (exceptions exist to prove the rule however).

Whether the landlord will allow you to sign a lease in your own name will be up to the building. Most require the lease to be in the name of the registered company, and company registration documents are often required, as well as copies of the passport and work permit of the authorised signatory(s). Some buildings will also require the lease to be sealed with the company stamp.

Each building has slightly different practices but most follow what I have described above, if in doubt check with your prospective new landlord.

[pj123]

Thank you for all three helpful replies.