With the introduction into Thai law of the new Rental Act nn May 1 (Thai and English versions are available to download on the right of this page), several trusted industry contacts have informed me how affected Thai rental landlords are looking to recoup some of the money they could stand to lose from Thailand property rentals.
For landlords with five rental residential properties or more, they will only be able to request one month as a security deposit and one month of advance rental – two months in total and not three ,as happens now.
For some, that could be a considerable amount especially if, as I’ve heard many times, the intention is to make it as hard as possible for the tenant to receive his or her payment at the end of the rental period.
What I am hearing from independent sources is the possibility of rental landlords charging “application fees” and “end of lease cleaning charges”, the former as much as THB 500 and the latter as much as ten times that amount.
Fees prior to starting rentals are common in other parts of the world, but not currently in Thailand.
It’s been suggested by at least two trust real estate contacts that criminal and financial checks may not be out of the question for prospective rentals.
I don’t think that would go down well with Thailand’s property rental community.
One of the main questions – how a tenant will know if their landlord is the owner of five or more residential rental properties – has not been answered despite many calls to the governing authority.
In my personal opinion I do not think they will be able to cope with the number of possible complaints that could be heading their way post May 2018.
The other major change, which I spoke about last month at industry seminars, is how real estate agencies that deal with rentals will be forced to change their business models.
No affected landlord will want to pay one month in commission to any real estate agent with absolutely no guarantee their tenant will stay longer than one month – even if they sign a longer agreement.
A fixed fee rental change is they way things must go, whether it’s THB 10,000 or whatever. It’s the ONLY way to go for properties where the landlord owns five or more properties.
Let’s not get started on the role of property management companies who are employed to sign on behalf of landlords. Owners must, and should. sign and all agreements themselves.
As always, we welcome your comments.