More people are becoming aware of Thailand’s new property rental law, which will come into effect in less than one week.
For landlords who own five or more rental properties, and their tenants, there are some big changes afoot.
Here are five predictions that we believe will impact Thailand’s rental sector during the coming months.
More landlords will opt to list themselves
Despite some property experts insisting the number of landlords with five or more properties is small, our experience is that it is the majority of the Bangkok rental market. Do not underestimate the number. With the prospect of a maximum tenancy of one month, regardless of any existing or new contract, many will be extremely reluctant to pay commission equal to one month to real estate agents for their rental deals. These landlord listings will mostly be in Thai.
Thai language will dominate
The new law is in the Thai language, understandably, and it specifies a Thai language agreement must be included as part of the rental deal. Tenants – do not sign anything that you do not understand and insist on a certified translation in a language you are comfortable with. That translation will only be as good as the translator, hence the need for a certified version by an approved translator.
More questions for tenants
Much like in other parts of the world, tenants entering a new rental agreement can expect to eventually encounter some form of personal checks about their prior rentals. In the U.K., for example. Credit checks are commonplace but we don’t think they will happen in the short-term in Thailand. But questions regarding prior rentals, reasons for leaving, work, family, pets, etc., can and should be expected soon. If we were landlords we would ask them.
Everything in writing
As a tenant, get everything in writing. Do not skimp on any details. Your first question to your new landlord should focus on whether they own five or more properties. Whatever the answer, get it in writing from the landlord themselves or your chosen rental agent. If they are unclear or refuse to answer, treat it as a warning sign.
New law supersedes all applicable agreements
If you signed a one-year rental agreement, paid one-month in security and two-months in advance, and your landlord has five or more properties, on May 1 the new law with make your existing agreement null-and-void, and you will be legally entitled to request a repayment of one month’s rental. Whether you get it will depend on whether you want to pursue a claim with the governing authority, the Office of the Board of Consumer Protection, and risk a rift with your current landlord.
In reality, only time will tell how much this new law will impact the rental sector. Rents could increase, which we personally think could happen in some cases, but demand will remain. People still need places to rent and landlords still need people to rent.
This new law is too pro-tenant, and it would not surprise us to see further amendments, maybe not in the very short term but perhaps even before the end of this year.