To the delight of residential tenants in Thailand, the Consumer Protection Board’s “Committee on Contract” has issued a notification that will make certain residential leases much more lessee friendly. Under the notification, published in the Government Gazette on 16 February and scheduled to take effect on 1 May 2018, certain residential leases will be treated as “controlled contracts” under the Consumer Protection Act and will be subject to the following restrictions:
- Rents cannot be collected more than one month in advance.
- Security deposits cannot be more than one month’s rent.
- Surcharges on electricity or water supply are not allowed (only actual charges by the utility providers are allowed).
- Force evacuation / removal of properties of a defaulted tenant from the leased area is not allowed.
- Renewal fees cannot be charged.
The above restrictions do not apply to all residential lease agreements but only to those that meet the following conditions:
- the lessor (whether an individual or a legal entity) has for lease five or more residential units (in a house, apartment, condominium, etc) whether in the same building or otherwise;
- the building is not a licensed dormitory or hotel; and
- the tenant is an individual.
The notification does not include a grandfathering provision and will apply to all qualifying residential leases in effect as of 1 May 2018. A violation of the new notification is subject to a maximum fine of Baht 100,000 and/or a maximum imprisonment term of one year pursuant to Section 57 of the Consumer Protection Act.