Bangkok rental prices are likely to rise following the introduction of Thailand’s new property rental laws at the start of May, 2018.
These are the words from today’s Bangkok Post (May 29, 2018), and if you think you’ve read this before you’d be right.
On May 4, ThailandProperty.News reported that Bangkok rental prices were already rising, and this was just days after the implementation of the new regulations.
The Bangkok Post said today that according to legal and property consultants: “As the new regulations do not allow property owners to collect rents more than three months in advance, monthly rents might be raised,”
The new law stipulates that only one month’s rental may be collected in advance, along with a one-month security deposit.
The new law only applies that landlords renting five residential units or more.
It also reported that landlords are not allowed to profit from utility charges.
One lawyer quoted by the newspaper said some owners have decided to raise rents by between THB 500 and THB 1,000 baht per month to cover common area expenses.
He also said a group of owners representing more than 6,000 projects nationwide have submitted a letter to the Administrative Court seeking to stop the new regulations, which are widely seen to be tenant-friendly.
Suphin Mechuchep, the Managing Director of property consultants JLL Thailand, added that the payment of water and electricity bills in line with actual costs may not be practical, due to variations in monthly cycles and the dates tenants actually move in.
She also admitted that Bangkok property rents will need to rise eventually to cover other expenses like facilities and maintenance.
So, in other words, landlords have been losing money on their previous rental costs. Really?
The real estate agency boss also said that a one-month deposit is too small, in her opinion as the time period provides landlords too little time to track down delinquent tenants.
As we’ve previously reported, it also makes it hard for real estate firms to charge a one-month commission for a rental that, under the new law, may only last 30-days.
This month, we know several real estate firms have amended their business model to adopt a fixed fee for rentals conducted through their agencies.