Consumer Protection Board Issues New Rules for Residential leases

The Thailand Consumer Protection Board’s “Committee on Contract” has issued a notification making certain residential leases a whole lot more advantageous to lessees. 

Pursuant to the announcement, certain residential leases will be treated as “controlled contracts” under the Consumer Protection Act and will be subject to the following regulations:

  1. Rent cannot be collected more than one month in advance.
  2. Security deposits cannot be more than one month’s rent.
  3. Surcharges on electricity or water supply are not allowed (only actual charges by the utility providers are allowed).
  4. Forced evacuation or the removal of a defaulted tenant’s property from the leased area is prohibited.
  5. 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:

  1. the lessor (whether an individual or a legal entity) leases five or more residential units (in a house, apartment, condominium, etc) whether in the same building or otherwise;
  2. the building is not a licensed dormitory or hotel; and
  3. the tenant is an individual.

The notification was published in the Government Gazette on February 16th and is scheduled to take effect on May 1, 2018.

The notification does not include a grandfathering provision, so all residential leases that meet the conditions specified above will be subject to the new restrictions.

Violators are subject to a fine of up to 100,000 baht and/or a prison sentence of up to one year, pursuant to Section 57 of the Consumer Protection Act.

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