Legal Steps for Leasing Property in Bangkok: A Guide for Expats

Renting property in Bangkok has become an increasingly popular choice for foreigners who want to experience what the metropolis offers without the long-term commitment of buying property. It’s also a simple way to get around the laws restricting foreign ownership of property in Thailand.

At the same time, leasing and subleasing the property to tenants and short-term visitors presents a strong financial opportunity for real estate investors. Given the steady influx of tourists and relocating professionals, strategically located rental properties can yield stable returns.

Whether you’re looking to rent for yourself or lease out property as an investment in Bangkok, understanding the ins and outs of lease agreements in Thailand is a must for a secure and cost-effective rental experience.

Understanding Leasing Contracts

A lease agreement in Thailand is a legal contract between a landlord and a tenant that outlines the terms of renting a property. 

Most residential leases in Thailand, particularly in Bangkok, last between 12 and 36 months. Leases longer than this (such as the 30-year lease agreement) must be registered with the Land Department. If it is not registered, only the first three years of the lease term will be legally enforceable. Also, once the lease term ends, it is possible to extend the lease agreement, but doing so requires approval from both parties. 

The key components of a Thai lease agreement are as follows:

• Parties Involved: This includes the full names and addresses of the landlord (lessor) and the tenant (lessee).
• Property Description: This is a detailed description of the lease property, covering its location, size, and any fittings or fixtures included before the lease agreement.
• Lease Term: This specifies the duration of the lease and includes its start and end dates.
• Rent and Payment Terms: This specifies the rental amount, the due date of each payment, and the acceptable payment methods.
• Security Deposit: This specifies the security deposit amount and the conditions for its return.
• Maintenance and Repairs: This specifies the responsibilities for maintaining the property and handling repairs.
• Utilities and Other Expenses: This specifies who will be responsible for paying utilities (electricity, water, etc.) and other expenses and how the payments will be made.
• The Termination Clause: This specifies the conditions under which either party can terminate the lease and includes the notice periods and any penalties.
• Dispute Resolution: This specifies the methods that must be used when resolving disputes (should they arise), such as mediation or arbitration.

It is important to note that a well-drafted lease agreement will safeguard the rights of both the landlord and the tenant by clearly outlining each party’s responsibilities and expectations to minimize the risk of disputes. Even a poorly drafted or unfair lease agreement can be legally binding. Therefore, clarity must be ensured from the outset to prevent exploitation or unfavorable investment commitments.

That’s why it is always wise to retain the services of a property lawyer in Thailand to review the lease agreement before signing one. 

Tenant and Landlord Responsibilities

Both landlords and tenants have obligations under Thai law that must be followed throughout the lease term. For tenants, their responsibilities include:

• Making On-Time Payments: The tenant must pay the rent on time as agreed in the lease agreement.
• Caring for the Property: The tenant must maintain the property as per the agreement and avoid causing damage.
• Adhering to the Agreement’s Terms: The tenant must follow the terms of the lease agreement, including restrictions on modifications or subleasing.

For landlords, their responsibilities include:

• Having Legal Ownership of the Property: Before entering into a lease agreement, the landlord must prove that they legally own the property and have the right to lease it.
• Ensuring the Property is Suitable for Leasing: Before entering into a lease agreement, the landlord must ensure that the property is in good condition and suitable for its intended use.
• Returning the Security Deposit: The landlord must return the security deposit to the tenant after the lease ends, provided that there are no damages or unpaid bills caused by the tenant.

In terms of taxes, the landlord is responsible for paying taxes on their rental income. The same applies to tenants who sublet the property and earn rental income from it in Thailand. 

If a tenant rents from a company, the rental income may be subjected to a 5% withholding tax. However, the payment of this tax is usually the landlord’s responsibility.

Role of Property Lawyers in Lease Agreements

Property lawyers provide crucial legal guidance for landlords and tenants entering a lease agreement in Thailand, as leasing property involves several responsibilities. A property lawyer can help clarify each component of the agreement and ensure it is fair and compliant with Thai law. Their services for lease agreements include:

1. Conducting a title search to verify that the landlord legally owns the property and has the right to lease it. This measure is to prevent title deed fraud. 
2. Conducting a contract review of the lease agreement and making any necessary amendments to ensure fairness and compliance with Thai rental laws and regulations, as well as protecting the rights of both parties.
3. Assisting with registering a lease agreement with a term longer than 36 months at the Land Department. 

Having a property lawyer involved can prevent misunderstandings, protect investments, and reduce the risk of future disputes. 

Security Deposits and Lease Terms

It is common for landlords in Bangkok to require a security deposit, which normally amounts to two months’ rent. They may also ask for one month’s rent in advance before allowing the tenant to move in. This deposit safeguards the landlord against property damage or unpaid bills.

However, according to Thai rental laws, landlords must return the security deposit within 30 days after the lease ends, but not before calculating any necessary deductions for property damage and unpaid bills. When moving into the property, tenants are advised to immediately document its condition through photos or a detailed written report to help prevent disputes over deposit refunds regarding pre-existing damages.

As mentioned, most lease agreements last between 12 and 36 months, with longer leases needing to be registered with the Land Department. Throughout all of this, tenants retain the right to terminate their lease agreement before their lease term ends, but this usually requires forfeiting the security deposit. 

Professional Assistance With Leasing Property in Bangkok

Whether you’re planning to lease property to someone else or rent one yourself, lease agreements in Bangkok require careful attention to contract terms and requirements to avoid issues with the government. Having a well-drafted lease agreement will help you avoid future disputes and safeguard your investments. 

To ensure your rights and investments are protected, get in touch with Siam Legal International. We are a full-service law firm and visa consultancy in Thailand with over 20 years of experience helping foreign and local clients with their legal and immigration needs.

Our team of bilingual property lawyers has the knowledge and expertise to assist you in drafting and reviewing the lease agreement to ensure that it is legally sound, fair, and beneficial for all parties involved. We will also conduct a title search to verify the ownership of the property you choose to rent so that your tenancy is legally protected and free from potential disputes.

For a seamless and secure leasing experience in Bangkok, do not hesitate to contact Siam Legal to book a consultation!

Category: Blog