PROPERTIES AWAY REAL ESTATE
I need to find a place to rent. What do I do first?
Before you start searching for your new home it’s a good idea to write down a budget. What are your current outgoings and what money do you have left each month to spend on rent? Take into account that, when you first move in, you will need to front a deposit as well as the first month’s rent and tenancy set up fees.
I have found a place I want to rent. Now what?
If you haven’t already, make sure you go and view the property. If it’s a house-share, meet all the people you’ll be moving in with. The letting agent will ask you to sign a Tenancy Fee Declaration form, which lists the services they will provide and the fees expected from you. The agent will then begin the referencing process to ensure you’re in a position to rent the property.
What is a tenancy agreement?
A tenancy agreement is a contract signed by both the tenant and the landlord. It outlines all the rules to which both parties must comply.
What is a tenancy deposit?
A tenancy deposit is used to cover the cost of damage that might incur during the tenancy. The detailed inventory produced at the beginning of the tenancy is used in conjunction with subsequent inspection reports and will be used to assess whether deductions from the deposit are necessary. Deductions are used to cover the cost of professional cleaning, damage above fair wear and tear, non-payment of rent and any outstanding expenses.
Why do I have to pay a deposit?
The landlord trusts the tenant to keep the property in a good condition and in good order. The deposit is held to ensure that any damages (over and above fair wear and tear) can be corrected at the end of the tenancy.
The second case is for purchasing reasons. To reserve a building we take a grantee deposit until all agreements are signed. Specific amounts will vary, and will be determined on a case-by-case basis, depending on the specific property and land. It varies between 10-25% of sales price.
What will happen to my deposit?
Landlords and letting agents are required to register your deposit. Your landlords register their deposits with a invoice. The deposit is then either held by the landlord or the agent itself. You should receive details of the scheme, explaining where the deposit is held.
The paid property guarantee deposit will fully deducted from the total sales price.
What are my responsibilities as a tenant?
As the tenant you are expected to
· Pay the rent on time
· Pay all the utility/water/internet bills and the unless otherwise agreed
· Dispose of all rubbish
· Keep the property secure at all times
· Advise of any repairs or maintenance needed as soon as it arises
· Not create unnecessary noise for neighbours
· Ventilate property
· Please also note whether it is smoker or nonsmoker
What if I accidentally cause damage to the property?
Don’t worry – accidents happen. Tell whoever is responsible for the property maintenance (either the landlord or letting agent) as soon as possible. You will be expected to cover the cost of putting it right. Don’t try to ignore or hide damage because it could get worse, and it will only come out of your deposit at the end of the tenancy.
What if I can’t pay my rent?
It is always your responsibility to pay the rent, but circumstances change. What happens if you become unemployed or are unable to work due to sickness? The most important thing is not to let arrears pile up until they’re unmanageable. Speak to your landlord or letting agent and see if you can reschedule your payments. And don’t forget, you can get insured against sickness and unemployment to keep yourself protected.
Can I decorate or make changes to the property?
In most cases, a tenant can only decorate or make changes to the property with the express permission of the landlord. We recommend receiving this permission in writing.
Who is responsible for repairs?
The landlord is responsible for maintaining the property in a good state of repair. They will either take care of this directly, or do so via a letting agent – make sure you know who to go to when there’s a fault at the beginning of the tenancy. If it is tenant find or rent collect, then you will need to talk to your landlord directly. It it is fully managed then the agent will help. If you do damage to the property you are expected to cover the cost of putting this right.
Do I have to show ID or Passport?
As part of the referencing process, we need to be sure that a tenant is what he says. We require an identity card (such as a passport or valid driver’s license).
When can my landlord enter the property?
A landlord has to give the tenant notice before entering the property, unless it’s an emergency.
What is a routine visit?
Your landlord or letting agent will regularly schedule visits to the property. They want to make sure that the property is being looked after and maintained in a good condition, and they’ll be looking for any maintenance issues.
What if the landlord isn’t keeping to their side of the agreement?
If a tenant believes the landlord is not keeping to their side of the agreement – for instance, not maintaining the property in a fit state of repair – then the first thing the tenant should do is speak to their letting agent. The letting agent has a duty of care to the tenant, and may be able to help to resolve issues depending on the service type the landlord has with the agent.
When the situation arises, that you have paid a guarantee deposit to purchase any property and the landlord isn’t keeping to their side of the agreement you will get back your full deposit.
What happens if I am late in paying the rent?
Any problems that may affect the potential payment of rent should be notified to the relevant office straight away. You may be charged a fee for late payment of rent.
Do I need my own insurance?
Your landlord is responsible for insuring the building and their possessions but you may want to take out your own contents insurance.
Do you carry insurance on my property?
No. You maintain your own insurance coverage. However, we will gladly recommend insurance companies that you can contact, to help you.
How do I report repairs?
You should advise us of any repairs or maintenance needed as soon as it arises. We will contact your landlord and discuss next steps. If the landlord is on our managed service we will take responsibility for liaising with any appointed contractors.
What about a pet?
It is up to the owner whether pets will be allowed on the property or not.
How do you handle: Problems, after-hours and on weekends?
Our phones are monitored 7 days a week and each tenant is provided with an emergency contact number for after-hours. Many times we can solve the problem over the phone.
How do you advertise vacancies?
We start with a yard sign on site at the available properties. We also list the property on our web site, www.properties-away.com and other on-line rental sites. We receive referrals daily from current and former tenants, owners and other agents.
Are foreigners allowed to own land in Thailand?
This interesting question must be answered with a “no”. There are various and more practicable ways to secure the right to use land for the construction of a house. Exceptions confirm the rule.
According to Thai law, foreign nationals are restricted from purchasing freehold land. However, they can legitimately secure property with the help of legal support to control that and own land. A foreign national cannot own more than 49% of the shares in a Thai limited company that owns freehold land under the company’s name. However, they may own a building as distinct from its land, such as a condominium unit.
- Become a Thai Citizen.
After 3 years of continuous residency on a non-immigrant visa,start by applying for permanent residency of Thailand. Once obtained, after a few years you may then apply for Thai citizenship depending on meeting other criteria, such as Thai language proficiency and knowledge of Thai culture and heritage.
- You make a big investment.
You invest over 40 million baht (~1,211.000 USD) in Thailand, and the government (Board of Investment) will allow you to buy land up to a size of 1 rai (1,600 m2) for residential purposes. This comes with a few other conditions and requirements as well as the outlay which makes it impractical for the vast majority, but if successful it does indeed give you the right to own land in Thailand and have more or less the same rights to it as would a Thai citizen.
If you are buying a completed villa or house and want to lease, you can in most cases make an agreement with the project owner or another reputable holding company. The land must be legally owned by a Thai entity, such as a Thai citizen or a Thai Company, to be held. The foreigner will then lease the use of the property for a maximum of 30 years per individual contract. This agreement may be renewed twice if both parties agree. This is an attractive option for the foreign investor as it offers the most protective legal framework with a sufficiently long maturity to deliver a return in excess of the initial investment.
- Establish or invest in a Thai company.
Establish or invest in a Thai limited company in order to purchase your real estate. You may own up to 49% of the company’s shares. The remaining 51%, again, must be held by a Thai citizen. Be warned!!! However, the government “Central Land Office” in Bangkok closely monitors foreign citizens holding shares of 40 percent and upwards in order to check that the company was not founded solely for the purpose of foreigners owning and speculating on land. To accommodate this, foreign-owned shares are often kept to 39%, but the articles of association of the limited company are chosen so that the foreign minority shareholder is appointed as the sole director and only they are able to sign binding contracts. This then gives you control over the company, and is the most commonly used option for foreign buyers of property here. However, we also strongly advise that you enlist the services of a lawyer in this case.
- The Usufruct.
Similar to leasing described above, a Thai citizen buys the land and instead of a leasehold, a usufructuary is now recorded in the land registry. This includes the lifelong right to live in the house or apartment and use the land for this purpose. The main difference to leasing here is that a usufruct expires upon death of the usufructuary and cannot be passed down to his or her heirs.
How can foreigners own land in Thailand?
The secure and hassle free methods for owning a land include using a leasehold agreement or setting up a Thai limited liability company.
Thailand land titles
What are the main types of land title deeds?
Land title deeds are divided into 3 main categories:
1.) Chanote (Nor Sor 4 Jor),
2.) The Nor Sor 3 Gor
3.) Nor Sor 3
Chanote is the most well known and the preferred type and grants the holder of this document the full rights over the land. Upon which you may sub-divide, sell, transfer, assign, utilize and possesses. Usually all condominiums are to be built on Chanote titles. The measurements of the land are most accurate making it the most preferred title deed to hold if you are planning to own a land in Thailand.
Nor Sor 3 Gor is a title document that is issued when a land is awaiting a full title deed. The land is measured by the land department and determines the exact boundaries so the owner knows exactly the area he owns. This type of land may be sold, transferred, or mortgaged or divided. Owner of the land may also file a petition to the land department requesting to change it to a full title deed (Chanote), and the land department may do so if there is no opposition made against the petition.
Nor Sor 3 is issued by a district land officer and has not yet been measured by the land department. Having no exact boundaries can cause problems in the future with regard to determining the area your land is while division to neighboring land. This title document determines the right to merely possess the land, but without transferring actual possession. The owner cannot sell or transfer property subject to it being publicized for at least a 30 day period. However, the Nor Sor 3 title may later be switched to a Nor Sor 3 Gor, or Chanote in the future.
There are a number of other land titles also available, however these do not afford the owner many rights to the land under Thai law and are therefore not recommended.
What are measurements using for land in Thailand?
In Thailand, land is measured in Rai, Ngan and Wah.
1 Rai = 4 Ngan (or 1600 Sq.m.)
1 Ngan = 100 Wah (or 400 Sq.m.)
1 Wah = 4 Sq.m.
1 Acer = 2.5 Rai
1 Hectare = 6.25 Rai
Land prices are usually expressed in Baht per Rai or Baht per Wah. Condominium prices are usually expressed in Baht per sqm (square meter).
What are the advantages of a freehold property?
A freehold property purchase can be slightly slower and more expensive than leasehold, but it´s main benefit is that the owner has the right to sell or lease the property and to develop the property within the guidelines under Thai law.
What are the advantages of setting up a Thai company to buy land?
Unlike land leasing, the ownership of such land is permanent as long as the company exists. Using this method is also convenient if you were already planning to set up a business in Thailand. This method is also suitable if you wish to purchase land as part of an investment as it is possible to mortgage or subdivide the land for resale, which is not normally possible with a leasehold.
Can i legally rent out a property in Thailand?
Yes. A foreign-owned property may be rented out. Some banks may allow you to open an account to collect the rents. You, as a non-resident, must be aware that personal income tax shall be deducted from your income earning in Thailand.
At purchasing Real Estate, which Tax could incurred?
- The Income Tax: This tax is very individually based. Personal income structure must also be taken into account here. As an estimate, you can expect an amount of 2% for low to medium priced properties, and 3% for high-priced real estate.
- VAT: 3.3% of the sale price must be paid.
- Stamp duty: 0.5% of the sale price must be paid.
- Land registration: Also called transfer fees. This is 2% of the value.
- Property taxes are not charged
Purchasing Condominiums in Thailand
How is a condominium defined under Thai law?
A condominium is basically defined as a building with distinct portions that can be sold for personal ownership.
Can a foreign national purchase condominiums?
This is the most available and uncomplicated option for foreigners. In this case, the purchase falls within the jurisdiction of the Condominium Act B.E. 2535. Here the rule, that foreign nationals may own up to 49% of the total floor area of the condominium.
I will give you an example: In a condominium with 100 units of equal floor size, 49 units may be offered to foreign owners, the rest must be owned by Thai nationals. Usually, once this foreign ownership quota is met, many of the Thai owned units will be offered to foreigners as 30 year leases.