Is it possible to run an Airbnb business legally in Thailand?

[SS1]

Airbnb businesses are becoming popular here and all over the world as people want to make money with their empty condos and houses. If you manage to get regular guests, the profits can be probably much greater compared to just regular renting on a 1 year contract or so. 

 

However, most condos are now filled with big signs saying this is illegal, referring to various laws such as hotels act and immigration act. I guess most people just ignore these, but my question is, is it actually possible to legally rent a condo using Airbnb? Afterall, Airbnb is just a website that connects those interested in renting with condo/house owners. So I am wondering, which part of such rental activity is actually illegal, if you do everything as per a normal rental arrangement, such as informing immigration of the guests etc. Many condo's have a sign saying "daily rental not allowed". So which law is this based on and what is the minimum time one can legally rent a condo for then? a week? a month? Where is the actual limit, before it can be considered running a hotel business? 

I am not too familiar with Airbnb, but for example, say you set a minimum period for renting for a week. You make a rental contract, and inform immigration of your guests. At which point does it get illegal? 

[upside]

The point you turn it into a brothel. 

[Don Mega]

I am not too familiar with Airbnb, but for example, say you set a minimum period for renting for a week. You make a rental contract, and inform immigration of your guests. At which point does it get illegal? 

 

I think the part where the rental period is less than 30days is the part where it becomes illegal.

[claffey]

The point is that people don't declare income from the daily rentals and the government loses out on a source of tax. That's why it's illegal. They want to control everything so they can extort money from the masses at every opportunity..

[SS1]

1 minute ago, Don Mega said:

 

 

 

I think the part where the rental period is less than 30days is the part where it becomes illegal.

 

This could be easily sorted by making a 30 day contract with each guest. However, the contract would be a flexible one, cancellable with 7 day notice (or you get the idea). 

[juehoe]

The point is that people don't declare income from the daily rentals and the government loses out on a source of tax. That's why it's illegal. They want to control everything so they can extort money from the masses at every opportunity..

That the reason why I pay taxes in Thailand.


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[Don Mega]

5 minutes ago, SS1 said:

 

This could be easily sorted by making a 30 day contract with each guest. However, the contract would be a flexible one, cancellable with 7 day notice (or you get the idea). 

good luck getting people to sign a 30day contract for a week long stay.

[SS1]

2 minutes ago, Don Mega said:

good luck getting people to sign a 30day contract for a week long stay.

 

If they only pay their duration in advance (or however Airbnb works) and the contract says cancellable with one day notice - I don't see any issues. 

[Don Mega]

29 minutes ago, SS1 said:

 

If they only pay their duration in advance (or however Airbnb works) and the contract says cancellable with one day notice - I don't see any issues. 

And what is to stop from going to the police to make a complaint that the renter signed a 30day contract but skipped out after 7 days without paying the balance ?

[yaagjon]

There is a house in our village that is rented out through AirBNB. Monthly rent on the house would be 35 to 40,000 a month I would imagine. They have it listed on Air BNB at $160 AUD a night.

[steve187]

14 minutes ago, yaagjon said:

There is a house in our village that is rented out through AirBNB. Monthly rent on the house would be 35 to 40,000 a month I would imagine. They have it listed on Air BNB at $160 AUD a night.

i like the way you used 2 different currencies, just to make the non Aussie turn to google.

[Asiantravel]

6 hours ago, Don Mega said:

And what is to stop from going to the police to make a complaint that the renter signed a 30day contract but skipped out after 7 days without paying the balance ?

 

because they could try it on just once (and probably fail  miserably) and then be banned permanently for doing any more business with Airbnb . Duh !

 

Edited October 10, 2016 by Asiantravel

[Ronuk]

6 hours ago, SS1 said:

 

If they only pay their duration in advance (or however Airbnb works) and the contract says cancellable with one day notice - I don't see any issues. 

See how long it takes for other condo owners to report you. 

[SS1]

8 hours ago, Don Mega said:

And what is to stop from going to the police to make a complaint that the renter signed a 30day contract but skipped out after 7 days without paying the balance ?

 

A clause in the contract that says it is cancellable with 1 day notice. 

 

2 hours ago, Ronuk said:

See how long it takes for other condo owners to report you. 

 

Right yes, but my original query was to do if you would be able to cover the legal side, so if you get reported nothing the condo management can do. 

[blackcab]

There are several threads in the Real estate forum about this. To answer the OP's question, it is illegal to rent a condo for less than a 30 day petiod as it is contrary to the Hotel Act 2004.

 

Condos are not licensed under the Hotel Act, and it is almost impossible for a condo to be simultaneously registered as a hotel.

[seedy]

As has been stated - rental for less than 30 days is Illegal.

 

Therefore, any other discussion in this Thread should keep well clear of the 'How can I circumvent this Law' questions.

[starky]

12 hours ago, SS1 said:

 

If they only pay their duration in advance (or however Airbnb works) and the contract says cancellable with one day notice - I don't see any issues. 

So you know it's illegal, your probably going to do it anyway and your just waiting for someone stupid enough to tell you that they are already doing it. Or are you waiting for someone to tell you its alright? And throwing off and saying continually that you don't know anything about airbnb makes you look ridiculous. Here I'll help just do it you'll probably be sweet just make sure You've got a work permit, your declaring your income and of course are paying the appropriate tax on that income. Simple.

[balo]

If you're a condo owner respect the law , how hard can it be ? Lots of people are looking for longer rental periods, anything from 30 days to 6 months .  If you try to rent out on a daily basis , like a hotel , you're in trouble here. 

  

Edited October 10, 2016 by balo

[retoohs]

authorities all around the world are looking at this type of rental at the moment. It has hurt communities everywhere by people removing properties from the local rental market to place them on the vacation market at higher rates. Many communities around the globe now have a shortage of workers longterm rental properties which then forces the prices of what is available up (supply and demand). Authorities are considering how to regulate and tax these properties so  that longterm rental will again be an attractive proposition for landlords. This will be achieved by requiring registration, resource consent (some countries), rates and taxation.

[Henryford]

18 hours ago, SS1 said:

 

This could be easily sorted by making a 30 day contract with each guest. However, the contract would be a flexible one, cancellable with 7 day notice (or you get the idea). 

 

My condo fines anyone who rents for under 30 days. We would do the same in this case.

[alant]

From previous reports the main problem seems to have arisen in condos where the new guests often seem to disturb the long term residents. Not sure about the tax aspect, I have come across small time bike rental where the authorities have said to small to bother etc. That may not be relevant here.

[aidon]

My advice to all here professing to know condo law and how to circumvent it is to actually hire a lawyer or talk to your juristic person.

 

It is not as simple as you are saying here, 30 days is only relevant if the build permit and the building committee alow it.

 

Condominiums are built as residences not hotels or serviced apartments.

[SS1]

7 hours ago, starky said:

So you know it's illegal, your probably going to do it anyway and your just waiting for someone stupid enough to tell you that they are already doing it. Or are you waiting for someone to tell you its alright? And throwing off and saying continually that you don't know anything about airbnb makes you look ridiculous. Here I'll help just do it you'll probably be sweet just make sure You've got a work permit, your declaring your income and of course are paying the appropriate tax on that income. Simple.

 

Well this was what I was asking for in the OP, which part of it is actually illegal. I did get the answer already which is 30 days. Now I know it. I am not looking "for someone to tell me it's alright", what are you on about? As far as knowing about Airbnb I know how it works in principle, but have not yet tried using it as a customer or host. Reason I am interested in this was, because my girlfriend is considering buying a condo as an investment and thinking whether it would be possible to run an Airbnb business legally. 

[DavidB4]

My ex-wife does this in the US but she has 3 small houses she rents out so it's more like a farm/hotel. If you could get several bungalows then you could probably avoid the 30 day rental requirement. 

[williamgeorgeallen]

21 hours ago, SS1 said:

 

If they only pay their duration in advance (or however Airbnb works) and the contract says cancellable with one day notice - I don't see any issues. 

think most people would be shy to sign up for 30 days pay for 7 and then cancel for fear of loosing the full 30 days off their credit card.

running accommodation in thailand is more hassle than it is worth. i had 2 guest houses in pattaya and gave up on renting for less than a month at a time. even then the monthly rental was so low it was not worth the hassle so i sold up both buildings and thank god i got my money back out.

[AlQaholic]

The Hotel Act (2008) requires any place that provides accommodation for less than a period of one month in exchange for payment is defined as a “Hotel”, regulated by the Hotel Act, and requires a hotel license.

 

 

There is a limited exception to this. A license is not required if:

1) the said place has less than five rooms; and

2) cannot accommodate over 20 guests at a time; and

3) the income being earned for such is merely “additional income”.

However, even in this case the owner must report such accommodation activity to the relevant local authorities.

I suspect if you have a unit in a condo development item 1 is interpreted as meaning the hole condo and not just your unit, same with item 2, but item 3 should override item 2 and 3 if you just have one unit that you rent out.

But I think local officials are doing the hotel associations bidding....

Edited October 11, 2016 by AlQaholic

[SS1]

Thanks for all the informative replies. The law seems now very clear to me.

[louse1953]

22 hours ago, claffey said:

The point is that people don't declare income from the daily rentals and the government loses out on a source of tax. That's why it's illegal. They want to control everything so they can extort money from the masses at every opportunity..

Nothing wrong with govt wanting tax as long as it goes to improve society.

[Steiner]

The biggest issue is the hotel commission, they have been applying pressure to condominiums and threatening them with legal action if they don't make an effort to stamp it out.
Most condos will stop your guests as soon as they catch them.
LPN have been turning water off to rooms, blocking electronic access cards and calling the owners to insist the tenant be evicted.

Same with Aspire, Midst, Life Rhythm etc.

Across the river seems worse, some condos stop every person walking in with luggage and ask for details of room etc.

 

There are a few condos 'allowing' this to happen, simply because with the number of rooms rented to AirBnB hosts, if they were shut down overnight and 60-80 rooms went back on the market, they would take a year to clear.
Of course that would affect the rental and resale price of the condominium, so they let it fly...

I know one condo in Bkk with at least 140 rooms on AirBnB and rented by Chinese travel agencies.

 

On the whole the guests don't make much trouble, in Bkk anyway.

I've heard way more complaints from condos for long term stayers than I have for AirBnB hosted rooms and on inspection at the end of the contract they are in generally excellent condition, probably because there are maids in every few days and because the hosts run them as a business that depends on good reviews, so appearance is important.

 

The law is clear, no short time lets of less than 30 days in residential buildings, of course condominium committees can do as they wish, however being mostly comprised of older Thai people, for whom 'face' is top of their list, that doesn't bode well for short term renters in their condo building.

 

Attached image is typical of many found in condo lobby's and elevators.

Although your guests would simply get dumped on the street and your contract broken/deposit lost if you didn't be upfront with the owner and get sublets in your contract, you can see how hostile most condos are.
 

[aidon]

42 minutes ago, Steiner said:

The law is clear, no short time lets of less than 30 days in residential buildings,

 

I'm afraid you are absolutely wrong, the Hotel ACT states that any rentals for less than one month contravene the hotel act not that you can rent a condominium in a residential building for more than 30 days. The Condominium Act is not as strict but relies on the build permit and EIS to define the type of Condo. A Condominium is strictly a residential building and, in some cases especially those built before 2008, you cannot rent at all unless 100% of the owners agree to change the rules for that Condominium.

 

And you CANNOT rent condominiums for a month at a time unless the condo is registered as a serviced apartment building.

 

And yes we do know because the Administration Arm of the government has helped us pursue people illegally using our condominium to rent both daily and monthly. And it has far reaching effects such as people illegally using the premises being banned from the premises, juristic persons and committee being removed and never allowed to serve on a committee or as a juristic position in ANY building ever again, individual condo owners being charged with using the condo room illegally in the courts, paying taxes as hotels do (back dated for 10 years) and personal income tax and penalties.

 

So it is quite severe if there is evidence to prosecute.

Edited October 11, 2016 by aidon