Residential Rental Contract
Nowadays, the business of property rentals is growing rapidly, especially this year. In the Eastern region of Thailand, foreigners are increasingly choosing to rent rather than buy. This trend may be due to the area’s appeal as a prime location for expats—living by the beach, enjoying fresh seafood, and having access to affordable hotels and restaurants. Rental properties are easy to find and are generally available at reasonable prices.
For landlords, having a rental contract is essential when leasing out a property. A proper contract helps prevent and protect both parties from potential issues that may arise during the tenancy or upon check-out.
Below is a summary of the key legal points for signing a rental agreement, based on the Royal Gazette Notification on Residential Building Leasing as a Contract-Controlled Business B.E. 2562 (2019).
Definition of “Residential Rental Business” as a Contract-Controlled Business (2019)
- “Residential rental business” means the business in which an operator agrees to allow a tenant, who is a natural person, to use a building for residential purposes in exchange for rental payment. This applies to cases where five or more rental units are offered, whether in the same building or multiple buildings combined.
- “Building” means a room, house, condominium unit, apartment, or any other type of residence intended for rental as a living space. This does not include dormitories or hotels.
- “Business operator” means the person who provides residential rental services and collects rental fees from the tenant.
- “Tenant” includes any sub-tenant who is a natural person entering into a rental agreement for the purpose of residing in the premises.
- “Security deposit” refers to the amount deposited by the tenant with the business operator as security against damages or similar charges. This includes any amount collected to cover damages to the property or unpaid expenses, excluding rent.
- “Service charges” refer to the operator’s expenses for providing facilities or safety related to the building’s use by the tenant, but do not include costs directly related to the operator’s business operations.
- “Advance rent” refers to the rent paid in advance by the tenant, which the operator keeps as a security for rental payment. It must either be refunded at the end of the lease or used to cover the rent for the final month as per the rental agreement.
Rental Agreement Requirements
- The rental contract must be in Thai language, clearly visible and legible, with font size not smaller than 2 millimeters and no more than 11 characters per inch.
- Name and address of the business operator or authorized representative.
- Name and location of the building.
- Details of the building’s condition, including assets and equipment provided.
- Rental period, specifying the exact start and end day, month, and year.
- Rental rate and the due date for rent payment.
- Utility charges, such as electricity, water, and telephone fees.
- Service charges.
Additional Regulations:
- The business operator must provide a written invoice to the tenant at least 3 days before the rent due date.
- The business operator must prepare a property handover record (including any provided facilities, if any), attached to the rental agreement, and provide the tenant with a copy for reference.
- Upon lease termination, the operator must immediately return the security deposit to the tenant, unless there is damage caused by the tenant. If no damage is found, the operator must return the deposit within 7 days from the end date of the lease and the return of possession of the property.
- The tenant has the right to terminate the lease early, provided that:
- They have resided in the property for at least half of the agreed lease term, and
- They give written notice at least 30 days in advance, and
- They have no outstanding rent or service payments.
- Breach of contract conditions must be written in red text, bold black, italics, or underlined, and must be clearly more prominent than other text in the contract.
- In case of termination due to the tenant’s behaviour that directly affects the peaceful cohabitation with other tenants, the operator must notify the tenant in writing at least 7 days in advance.
- If the tenant violates laws related to public order or moral conduct, the business operator may terminate the lease immediately without prior notice.
The operator must not exclude or limit their liability for significant contractual breaches or wrongful acts without justifiable reason.
Prohibited Contract Clauses:
- The operator must not exclude or limit their liability for significant contractual breaches or wrongful acts without justifiable reason.
- Charging more than three months’ worth of rent in total for advance rent and security deposit combined.
- Allow the business operator to change the rental rate, utility charges, or service fees before the lease ends.
- Allow the business operator to forfeit the security deposit or advance rent without fault on the part of the tenant.
- Permit the business operator or their representative to enter the property without prior notice to the tenant, except in emergencies that affect other tenants.
- Allow the operator to charge for electricity or water at a rate higher than what is charged by the actual service providers.
- Give the operator the right to block the tenant’s access to the property, seize or remove the tenant’s belongings without first lawfully terminating the lease.
- Require the tenant to pay a fee to renew the lease.
- Allow the operator to terminate the lease without the tenant breaching any essential term of the agreement.
- Make the tenant liable for damage or wear and tear that occurs through normal use of the property or its equipment.
- Make the tenant responsible for damage to the property, assets, or equipment caused by events not due to the tenant’s fault.
Key Legal Provisions
1. Scope
- Applies to businesses leasing 5 or more residential units, regardless of whether they are in the same building.
- Covers houses, apartments, condominiums, or similar properties used for living, but excludes dormitories and hotels.
2. Contract Requirements
- Rental contracts must be in Thai language with clear and legible font (minimum 2 mm size and no more than 11 characters per inch).
- Must include:
- Full names and addresses of both landlord and tenant
- Building name and location
- Description of the unit and its condition, furniture, and appliances
- Start and end date of the lease
- Rent amount and due date
- Utility rates (electricity, water, etc.)
- Service charges
3. Advance Notice & Documentation
- Landlords must:
- Provide billing invoices at least 3 days before payment due date.
- Prepare a move-in inspection document with property condition and deliver a copy to the tenant.
- Return the security deposit immediately upon lease end, or within 7 days if there’s no damage.
4. Tenant’s Right to Early Termination
- Tenants may terminate the lease early (with 30 days’ written notice) if:
- They have stayed for at least half of the agreed lease term
- They are not in breach of contract
5. Fair Contract Terms
- Prohibited clauses include:
- Collecting advance rent + security deposit totaling more than 3 months’ rent
- Changing rent, utility rates, or fees before lease ends
- Confiscating deposit or advance rent without fault by the tenant
- Entering the unit without prior notice, except in emergencies
- Charging electricity or water above official rates
- Blocking access, removing tenant’s belongings, or forcing entry without lawful contract termination
- Charging a contract renewal fee
- Terminating the lease without tenant’s fault
- Holding tenants liable for normal wear and tear
- Holding tenants liable for damages not caused by their fault