Condo leasing laws
Last updated: 3 Aug 2025
803 Views
Currently, one of the most popular forms of real estate investment is condo rental. This is due to the high demand for condos in the city, ideally located for commuting to work without traffic jams. Furthermore, condo rentals don't require a large investment, as they can be secured through bank loans. This has led many new real estate investors to begin their real estate investment journey by renting out condos.
However, it's important to understand the legal issues that can lead to problems with condo rentals. This is to prevent further complications once the rental process is complete. Here are some key legal issues to consider before renting out condos:
___________________________________________
1. Daily and Weekly Condo Rental Is Illegal
The success of Airbnb, which allows homeowners to become hotel owners and rent out their units, has led to the rise of daily and weekly condo rentals in Thailand. This is illegal because condominium projects typically sell units for residential use, but buyers cannot rent them out on a daily or weekly basis, as they are not hotels. Therefore, operating a hotel-like business without actually being a hotel is illegal. This violates the Hotel Act of 2004. If discovered, the penalty is imprisonment for up to one year, a fine of up to 20,000 baht, or both.
___________________________________________
2. If the renter is a foreigner, the police must be notified.
The target market for condo rentals is not limited to Thais. Renting condos to foreigners who are long-term visitors or working in Thailand is also a market with high purchasing power. However, there are also hidden crises if the landlord fails to comply with the law. If the landlord rents out a condo to a foreigner, the landlord must notify the Immigration Bureau or the local police station. Failure to do so will be considered a violation of the law. This law is in place to protect the safety and peace of the country, as well as the landlord's own, as it is impossible to know whether the foreign renter is a good person or a transnational criminal.
___________________________________________
3. The lease must be valid and not unfair to the renter.
The lease agreement is another important issue that many landlords may overlook, failing to thoroughly check that all terms and details comply with the law. For example, laws enacted to protect tenants include: landlords must send invoices to tenants at least seven days in advance; landlords must keep a copy of the lease agreement; landlords must not collect more than one month's rent in advance; and security deposits must not exceed one month's. These rental conditions may seem trivial, but if a problem arises and the contract is found to be inaccurate or illegal, the landlord will be unable to pursue legal action against the tenant. In other words, ensuring a smooth lease requires utmost care and attention to contract integrity.
___________________________________________
Although condo leasing is a form of real estate investment that effectively creates passive income opportunities for investors, the success of the project depends on whether the investor legally leases the property. Furthermore, investors must consider the risks of consistently finding tenants and plan their finances to accommodate periods when tenants are not found. Ignoring these potential risks and the economic downturn can negatively impact investment plans and lead to failure.
___________________________________________
Thank you for the excellent information from REIC.
However, it's important to understand the legal issues that can lead to problems with condo rentals. This is to prevent further complications once the rental process is complete. Here are some key legal issues to consider before renting out condos:
___________________________________________
1. Daily and Weekly Condo Rental Is Illegal
The success of Airbnb, which allows homeowners to become hotel owners and rent out their units, has led to the rise of daily and weekly condo rentals in Thailand. This is illegal because condominium projects typically sell units for residential use, but buyers cannot rent them out on a daily or weekly basis, as they are not hotels. Therefore, operating a hotel-like business without actually being a hotel is illegal. This violates the Hotel Act of 2004. If discovered, the penalty is imprisonment for up to one year, a fine of up to 20,000 baht, or both.
___________________________________________
2. If the renter is a foreigner, the police must be notified.
The target market for condo rentals is not limited to Thais. Renting condos to foreigners who are long-term visitors or working in Thailand is also a market with high purchasing power. However, there are also hidden crises if the landlord fails to comply with the law. If the landlord rents out a condo to a foreigner, the landlord must notify the Immigration Bureau or the local police station. Failure to do so will be considered a violation of the law. This law is in place to protect the safety and peace of the country, as well as the landlord's own, as it is impossible to know whether the foreign renter is a good person or a transnational criminal.
___________________________________________
3. The lease must be valid and not unfair to the renter.
The lease agreement is another important issue that many landlords may overlook, failing to thoroughly check that all terms and details comply with the law. For example, laws enacted to protect tenants include: landlords must send invoices to tenants at least seven days in advance; landlords must keep a copy of the lease agreement; landlords must not collect more than one month's rent in advance; and security deposits must not exceed one month's. These rental conditions may seem trivial, but if a problem arises and the contract is found to be inaccurate or illegal, the landlord will be unable to pursue legal action against the tenant. In other words, ensuring a smooth lease requires utmost care and attention to contract integrity.
___________________________________________
Although condo leasing is a form of real estate investment that effectively creates passive income opportunities for investors, the success of the project depends on whether the investor legally leases the property. Furthermore, investors must consider the risks of consistently finding tenants and plan their finances to accommodate periods when tenants are not found. Ignoring these potential risks and the economic downturn can negatively impact investment plans and lead to failure.
___________________________________________
Thank you for the excellent information from REIC.
Related Content
10 Sept 2025
9 Sept 2025
