A law in Thailand said that the business of renting residential properties becomes a contract-controlled business. This means you have protection standards if the landlord is conducting a rental property business under the law.
If you’re thinking about renting long-term then you should make yourself familiar with the following sections of the Civil and Commercial Code.
Section 537
Section 537 ‘A hire of property is a contract whereby a person, called the lessor, agrees to let another person, called the hirer (tenant/ lessee), have the use or benefit of a property for a limited period of time and the hirer agrees to pay rent’
A lease should clearly state the rent and payment terms. In practice, most residential leases are not registered at the Land Office. Registration is typically relevant only when the lease term exceeds three years, in which case the lease must be in writing and registered with the competent official. Registration fees and related taxes may apply based on the registered lease terms.
Section 538
538 Civil Code ‘A hire of immovable property is not enforceable by action unless there be some written evidence signed by the party liable. If the hire is for more than three years or for the life of the lessor or tenant, it is enforceable only for three years unless it is made in writing and registered by the competent official’
This means everything needs to be backed by official documentation that is properly stamped and witnessed. This will take time and money but you should always do it this way.
Section 540
Thai law translation section 540 Civil and Commercial Code: ‘The duration of a hire of immovable property cannot exceed thirty years. If it is made for a longer period, such period shall be reduced to thirty years. The aforesaid period may be renewed, but it must not exceed thirty years from the time of renewal.’
So therefore you can’t just hand down a rental apartment or property in perpetuity to a family member as if it was your property.
Section 544
Section 544 (Civil and Commercial Code): ‘Unless otherwise provided by the lease contract, a lessee/tenant cannot sublet or transfer his rights in the whole or part of the property hired to a third person. If the lessee fails to comply with this provision, the lessor may terminate the contract.’
This could turn out to be a big issue if you decide to make a quick buck on the side. The implications could be severe if you decide to sublet through AirBnB or to just do it yourself. As a rule, don’t do it unless you have a specific clause that allows you to do it, which in any case will be very rare to non-existent.
Section 564
Section 564: A contract of hire is extinguished at the end of the agreed period without notice.”
You should be aware that there is no automatic rollover period for a rental agreement in Thailand unless you wish to make another separate agreement that is relevant to the future time period.
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