House Rental - Two Deposits?

[tuktukwan]

A friend is thinking of renting a 2 bedroom house in Pattaya. The monthly rental is B30,000, minimum contract is 12 months. Having seen a few photos it seems to be a fair price. The house is new, presently unfurnished and on a small development. The developers will furnish the property with all the basics, beds, kitchen equipment, chairs, tables, sofas, etc. but not a TV and the like. He's puzzled because they (developers) want two months security deposit (B60,000) AND B50,000 for a furniture deposit! Is this usual for Thailand? Having read the horror stories on this forum about members not managing to get their deposits back I'm wondering if he's doing the right thing. Are there any members who have been asked for similar when entering into a rental contract? Two months rent appears to be the norm but the furniture deposit is rather excessive in my opinion! Is there anything that he can do to safeguard his deposit(s).

Any advice appreciated.

[Axel]

2-3 months deposit is common in my experience.

The rental ontract might than specifiy amounts allocated for rental of house and furniture. I understand that furniture rental-income attracts a lower tax-rate.

[Livinginexile]

Furniture deposit? I've never heard of than one.

I would be interested to know if this is a common requirement for high end furnished rentals.

[dave111223]

If the furniture is not yet purchased it may be worth just keeping the 50,000 and buying the furniture himself.

[smartecosse]

i can just see the conversation when he goes to leave

"so sorry sir, plates have scrathes, and bed not totally flat anymore - no deposit back"

furniture deposit - what a joke......

[think_too_mut]

If the furniture is not yet purchased it may be worth just keeping the 50,000 and buying the furniture himself.

I have never heard of the furniture deposit. If it is for real, the logic behind it could be - the apartment portion of the deposit will be retuirned intact (if you don't drill the walls etc) and the % of the furniture one would be for damage done to it. I am afraid, that would not tolerate normal wear and tear.

About keeping 50K and using it to buy the furniture - it won't buy much in a reasonable shop like SP Furniture.

[chuchok]

50K will buy a <deleted> load of furniture if you know where to buy.50k deposit!!!...tell them to stick it sideways up their bottom.

[think_too_mut]

50K will buy a <deleted> load of furniture if you know where to buy.50k deposit!!!...tell them to stick it sideways up their bottom.

It would. Lotus/Tesco furniture department or smallish shops around Phrakhanong. A big wardrobe would be 2500B.

Then, you would have to beat that feeling of temporarity/camping in your own home.

If one wants to stay (not live) in the apartment, that's the way to go.

On the other hand - 50K deposit for the furniture is a nonsense. Could be, they just want the tenant to to go away.

[Heng]

50K will buy a <deleted> load of furniture if you know where to buy.50k deposit!!!...tell them to stick it sideways up their bottom.

It might not even get you half an antique door frame from River City though. Some properties have valuable furnishings and it's NOT out of the ordinary for landlords to request a deposit on said furnishings. A lot of times it's simply a token reminder not to damage the property, it may well be just a 50k deposit on several million in decor. Of course... it MAY really just be 50k or less in decor/furnishings and you could be dealing with a real tightwad of a landlord.

It's pretty simple really... if you're not comfortable with the lease or deposit, shop somewhere else.

Edited December 2, 2006 by Heng

[dave111223]

If the furniture is not yet purchased it may be worth just keeping the 50,000 and buying the furniture himself.

I have never heard of the furniture deposit. If it is for real, the logic behind it could be - the apartment portion of the deposit will be retuirned intact (if you don't drill the walls etc) and the % of the furniture one would be for damage done to it. I am afraid, that would not tolerate normal wear and tear.

About keeping 50K and using it to buy the furniture - it won't buy much in a reasonable shop like SP Furniture.

Where do you think the landlord is going to go shopping for the furniture?? Guaranteed it will be absolute bargin basement anyways....

Do you really think that the landlord is going to spend more than the 50k on the furniture?

[Briggsy]

This could be simply a starting point for negotiations. Come back with an equally outrageous figure and see if they accept it. You never know.

Also watch out for "depreciation" in the contract. A friend of mine lost 10% of his deposit immediately on this. They were being very illogical with accounting terms here.

[think_too_mut]

If the furniture is not yet purchased it may be worth just keeping the 50,000 and buying the furniture himself.

I have never heard of the furniture deposit. If it is for real, the logic behind it could be - the apartment portion of the deposit will be retuirned intact (if you don't drill the walls etc) and the % of the furniture one would be for damage done to it. I am afraid, that would not tolerate normal wear and tear.

About keeping 50K and using it to buy the furniture - it won't buy much in a reasonable shop like SP Furniture.

Where do you think the landlord is going to go shopping for the furniture?? Guaranteed it will be absolute bargin basement anyways....

Do you really think that the landlord is going to spend more than the 50k on the furniture?

I did not think too mut. The SP furniture was there, landlord bought it.

But not everything. We bought a workstation and a wall wide shelf. Just about 1000US$ for those 2 pieces and it matched what was already there.

[quiksilva]

Many landlords will split the 'rent' into three agreements (sometimes just two). The rental, service and furniture hire agreements. Why? Well Property tax (12.5%) is payable on rent and only VAT 7% is payable on furniture hire and services. So sometimes the proportion of split is geared towards furniture hire and service fees.

If you are paying, say 25K for funiture hire in addition to the 30K rent, then this may make sense.

If not, walk away and find somewhere else.

[chiang mai]

A friend is thinking of renting a 2 bedroom house in Pattaya. The monthly rental is B30,000, minimum contract is 12 months. Having seen a few photos it seems to be a fair price. The house is new, presently unfurnished and on a small development. The developers will furnish the property with all the basics, beds, kitchen equipment, chairs, tables, sofas, etc. but not a TV and the like. He's puzzled because they (developers) want two months security deposit (B60,000) AND B50,000 for a furniture deposit! Is this usual for Thailand? Having read the horror stories on this forum about members not managing to get their deposits back I'm wondering if he's doing the right thing. Are there any members who have been asked for similar when entering into a rental contract? Two months rent appears to be the norm but the furniture deposit is rather excessive in my opinion! Is there anything that he can do to safeguard his deposit(s).

Any advice appreciated.

The scenario you describe is not uncommon and is due as already posted to the taxation rates of the two entities. But if you go that route be sure to take lots of photo's of all of the furniture AND the apartment before you sign the lease and write into the contract that those photo's are to be used in arbitration to determine the wear and tear factor at the end of the lease. I did that with my one year lease in CM and it worked very much in my favor when the manageress at the end of the lease claimed all kinds of nonesence which was when the pictures came into their own - fortunately the actual owner was a very reasonable guy but often the on site managers are less than honest.

[GuestHouse]

I suspect that the root of the problem is the Owner's inexperience in property renting and/or lack of understanding of the ecconomics of the business.

That in itself suggest that at the time of leaving you may have problems with getting deposits back where the landlord has not calculated depreciation into his plan.

They do that.. Oh I invested this much, I get this much income, I've made this much on property growth... (And I'll dump all the depreciation on the tenant).