Potential Breach Of Contract

[Tompa]

We just signed a 2 year rental contract for the house we’re living in, but now the owners are keen on selling it. They have people coming by for inspection on Sunday. I’m obviously not too happy about this, but not sure were we stand legally. Can they proceed to sell the house and kick us out even though we have a rental contract?

Tompa,

[malcolminthemiddle]

We just signed a 2 year rental contract for the house we’re living in, but now the owners are keen on selling it. They have people coming by for inspection on Sunday. I’m obviously not too happy about this, but not sure were we stand legally. Can they proceed to sell the house and kick us out even though we have a rental contract?

Tompa,

What are the termination conditions within the contract?

[473geo]

We just signed a 2 year rental contract for the house we're living in, but now the owners are keen on selling it. They have people coming by for inspection on Sunday. I'm obviously not too happy about this, but not sure were we stand legally. Can they proceed to sell the house and kick us out even though we have a rental contract?

Tompa,

I guess you need to check if there is a notice period for termination in your contract......if there is say a 30 day notice period?

[InterestedObserver]

We just signed a 2 year rental contract for the house we're living in, but now the owners are keen on selling it. They have people coming by for inspection on Sunday. I'm obviously not too happy about this, but not sure were we stand legally. Can they proceed to sell the house and kick us out even though we have a rental contract?

Tompa,

The short answer appears to be no, unless there is a termination clause in the rental contract. Section 569 of the Civil and Commercial Code states that a contract of hire of immovable property is not extinguished by the transfer of ownership of the property hired. The transferee is entitled to the rights and is subjected to the duties of the transferor towards the hirer.

[katabeachbum]

Basicly you would have the right to refund for what is prepayed if you are not allowed to live there any more.

This is a country for propertyowners. Not tenants

[mjperry]

My understanding is that they can sell the property with a tenant in-place and the contract continues with the new owner.

Martin

[Tompa]

Hi,

Thanks for the replies. There is no termination condition in the contract, just that it runs until the end of june, 2011.

Tompa,

[katabeachbum]

My understanding is that they can sell the property with a tenant in-place and the contract continues with the new owner.

Martin

Nope

rentalagreement is cancelled for both parties when transfer of ownership, according to thai law

[malcolminthemiddle]

To the OP.

Are you sure the landlord is not selling the property with the benefit of a sitting tenant, you?

What makes you think the landlord or the new landlord intends on canceling your rental agreement?

Are you jumping to conclusions.

Edited July 25, 2009 by malcolminthemiddle

[InterestedObserver]

My understanding is that they can sell the property with a tenant in-place and the contract continues with the new owner.

Martin

Nope

rentalagreement is cancelled for both parties when transfer of ownership, according to thai law

What Thai law would that be? I cannot seem to locate it in the Civil and Commercial Code under Hire of Property.

[crocodilexp]

This is a country for propertyowners. Not tenants

Sure, law particularly favors non-citizen property owners...

This is a country where things go wrong in unpredictable ways with little or no recourse to the legal system. In such circumstances, renting means you at worst lost the deposit...

I truly don't see why some Farang have a home-owning fetish (even if they can't own a home in their name). We can only own condos. A 2m baht condo in Bangkok would have a rent of ~10k baht, so you it'll take 16+ years until buying pays off over rent (assuming no nasty surprises along the way).

[aussiebebe]

I've rented houses in Thailand and had a similar problem to the OP about two years ago. The landlady was selling the house that I was renting. I had a consultation with a local Thai laywer (for which I was charged) and was advised that my contract effectively wouldn't protect us against such a situation. It all depends on the contract. I thought the landlady may not return my deposit, so I stopped paying for 3months and moved, which seemed acceptable to her.

I truly don't see why some Farang have a home-owning fetish (even if they can't own a home in their name). We can only own condos. A 2m baht condo in Bangkok would have a rent of ~10k baht, so you it'll take 16+ years until buying pays off over rent (assuming no nasty surprises along the way).

I couldn't agree more, except 16 years is too short! If 2MTB had been invested abroad for a theoretical 16 years, even in a tax-free savings account, it could have appreciated arguably more than a condo in Thailand. However, if you were the owner you'd have to pay monthly service charges and dues to the sinking fund. Although you'd hopefully sell a condo 16 years later for more money than you originally paid for it, when you adjust for inflation, buying may never pay off over renting, I think it depends on luck and timing of the sale.

[samILO]

Hi,

Thanks for the replies. There is no termination condition in the contract, just that it runs until the end of june, 2011.

Tompa,

The contract is still valid. If you agree to terminate for a certain compensation this is totally your decision. Any agreement up to 3 years if not registered with the land department is valid and binding to a new owner. I would make clear with a new owner coming to view the property, that you do hold the lease agreement until such time and intent to use it.

[mjperry]

The contract is still valid. If you agree to terminate for a certain compensation this is totally your decision. Any agreement up to 3 years if not registered with the land department is valid and binding to a new owner. I would make clear with a new owner coming to view the property, that you do hold the lease agreement until such time and intent to use it.

Yes, this was my understanding also, as have recently had to compose a lease document for a property, as long as it meets the local law, so as long as the contract length is under 3 years then no registration is required at the land department to make it binding but if over three years it has to be registered to become binding

Martin

Edited July 26, 2009 by mjperry

[stgrhe]

My understanding is that they can sell the property with a tenant in-place and the contract continues with the new owner.

Martin

Nope

rentalagreement is cancelled for both parties when transfer of ownership, according to thai law

Wrong, read this! http://www.samuiforsale.com/Civil_Code_tex...sh_II.html#Hire Se section 569!

[Tompa]

To the OP.

Are you sure the landlord is not selling the property with the benefit of a sitting tenant, you?

What makes you think the landlord or the new landlord intends on canceling your rental agreement?

Are you jumping to conclusions.

The owners are moving overseas which is why they wish to sell it. The potential buyers came yesterday to have a look, and we had a quick chat to them. They are interested in moving to this area, so would not be interested in buying it for investment (rental). We did mention to both them and the owners that we have a current rental contract running for another 2 years. When this was brought up the owners changed subject quite quickly

The potential buyers have looked at a lot of houses (they are building new ones here as well), so we'll see what will happen.

Tompa,