bangkok Archives

Short-term rental businesses via online platforms in Thailand

November 11, 2022 12:02 pm Comments Off

As the economy recovers from the COVID-19 crisis, Thailand is again attracting more and more tourists to the country. Visitor numbers are increasing, and short-term rental businesses through platforms such as Airbnb, including daily rentals via other online platforms, are gradually becoming more popular, encouraging villa and apartment owners to set up short-term rentals to allow tourists to stay in their properties.

Problematically, however, properties in Thailand are generally not allowed to be rented out for less than 30 days unless you have a hotel license, while condominium units are restricted to being used for short-term rentals under Thai Condominium laws.

In our experience, acting contrary to these requirements may constitute a criminal offense under Thai law.

Online rental platform – what is it?

An online rental platform is an online marketplace for travelers looking for accommodation, for example, Airbnb, Agoda, or Booking.com. The groundbreaking model allowing private landlords to host vacationers and business travelers has effectively transformed the digital platform into the “world’s largest hotel”.

Online rental platform’s legal status is still uncertain

Online rental platforms continue to face massive criticism for being major competitors to regular hotel and accommodation businesses. Hotel owners are not pleased about declining revenues while continuing to pay the overhead costs for their properties. As a result, they view online rental platforms such as the Airbnb model as an unacceptable hardship. As a result, like other countries, Thailand has imposed restrictions against Airbnb and its operations.

For condominiums

We have to be focused on two Acts, the Condominium Act B.E. 2522 (1979) (the “Condominium Act”) and the Hotel Act B.E. 2547 (2004) (the “Hotel Act”).

The Condominium Act, section 17/1 paragraph 2 states that no person shall be permitted to operate their business in the condominium except for the provided specific area of the condominium building. This regulation applies to short-term rentals via an online platform.

Another concern is the Hotel Act. Under the Hotel Act, the definition of “hotel” is a lodging premise established for commercial purposes to provide temporary accommodation to a traveler or any person for consideration. Therefore, a monthly rental or more is exempt from the definition of temporary accommodation of the Hotel Act.

Section 1336 of the Thai Civil and Commercial Code (“CCC”) states that the unit owner can enjoy his rights over his property if it does not disturb others. However, the Condominium Act, which governs the usage of the condominium unit, prohibits the condominium owner from using his condominium unit for short-term rental.

For house

Regarding landed property, the related piece of legislation is the Hotel Act which is, in principle, the same as for the condominium unit, which restricts the usage to short-term rental, except if such house owners have a hotel license. If the house owner has more than 4 rooms and is entitled to hold more than 20 occupants at a time, the property owner is entitled to apply for a hotel license to operate a short-term rental legally.

On the other hand, the house owner is entitled to apply for the non-hotel license if the property has fewer than 4 rooms and cannot hold more than 20 tourists at a time but still wants to operate a short-term rental. The owner has to apply for a non-hotel license. This will allow a short-term rental of a house to be valid and legal.

There are some specific requirements for each type of license. For example, for a non-hotel license, the owner must be a Thai national. Foreigners or juristic persons may not apply for this type of license. The reasoning behind this rule is to increase local people’s income, who could use their houses as accommodation for tourists as their additional main income source. The hotel license has stricter requirements than non-hotel licenses, such as hotels may not be located near historical sites, and entrance to the hotel must not cause traffic problems. Moreover, before applying for a hotel license, the building must also comply with the Building Control Act B.E. 2522. The regulation stipulates many more obligations for the applicant to comply with.

Conclusion

The legality of online short-term rental platforms in Thailand is still up in the air. The condominium is not allowed to rent on a daily or weekly basis. However, this is not a general rule, and it depends on whether each condominium regulation allows it.

In order to legally operate a short-term rental business, the house owner requires a hotel or a non-hotel license, as the case may be, subject to the Hotel Act. A house with fewer than 4 rooms and 20 occupants maximum shall obtain a non-hotel license; however, a house with more than 4 rooms and more than 20 occupants in the building must obtain a hotel license.

Thus, the legal status of online short-term rental platforms is still unknown as there is no clear answer by government authorities whether it is possible to do or not.

If you have any questions related to property in Thailand, please do not hesitate to contact us at [email protected]

Fabian Doppler
Connect with me on LinkedIn

Fabian, a founding partner of FRANK Legal & Tax, is a German-trained lawyer with expertise in corporate/commercial and real estate law, and litigation, and has been living and working in Thailand since 2005.

Buying a House in Thailand – Handover Checklist

July 14, 2022 10:56 am Comments Off

When the owner of residential property changes, the last step after the visit to the land office and the receipt of the money is crucial: the handover of the keys; after this, the previous owner moves out, and the buyer moves in. At this point, all documents are handed over, a joint tour of the house is made, and meter readings and defects are noted. It makes sense to draw up a protocol for the handover of possession so that the sale of the house does not have any repercussions. We have summarized what you should pay attention to, based on our experience, in the house handover protocol.

Summary of the most important things to remember in a handover:

As with a condominium, a house is handed over at an agreed time after the purchase contract has been signed, usually only after the money has been received.

The handover occurs under the agreed conditions, typically in a “bought as seen” condition.

Before the keys are handed over, the buyer and seller tour the property together.

Defects are noted in the handover protocol, including the “to do” list, who will take care of these, and by what date.

It also lists all the previous owner’s documents to be handed over to the new owner.

The handover protocol may also be referred to as the takeover protocol, as meter readings are recorded, and it is noted which inventory/furniture is being taken over.

The buyer and seller sign the handover protocol, and witnesses present also sign if necessary.

The goal of a handover protocol for a house or condominium is a smooth transition without legal disputes. It protects both sides: for example, the buyer can claim unlisted, missing, or required documents from the seller. If defects occur after the handover, which the seller neither concealed nor is responsible for, he does not have to pay for these to be resolved.

What should be included in a house handover protocol?

A good handover protocol checklist includes:

Names and contact details of the parties
Time of the inspection
Property data (address, last renovation, service charges paid until)
Meter readings (heating, electricity, water meters)
Furniture/inventory per room
Defects – including the basement, attic, garage, outdoor areas such as the garden, etc. Examples include a crack on a wall, a leaking roof, and faucets not working. A record is taken of who will remove the defects, by when, and at whose expense.

Repairs that have already been ordered or are still being paid for by the previous owner.
The number of keys from the mailbox to the tool shed.
A list of the documents handed over.

Of particular importance are:

Building description
Building plans, floor plans, sketches, and static calculations
Building insurance
Property tax assessment
Craftsmen’s invoices (especially relatively recent, larger ones)
Inspection records (especially fireplace inspections by the chimney sweep)
Operating manuals for building services/heating etc.
In the case of condominiums, the minutes of the last three owners’ meetings and the declaration of division should also be included.
Place, date, and signature of all who are present*.
*Optional: If witnesses accompany you during the handover, name them in the handover protocol and have them sign.

For more information about our real estate services please visit www.franklegaltax.com/services/real-estate/
If you have any questions related to property transfers or real estate in Thailand, please contact [email protected]

Fabian Doppler
Connect with me on LinkedIn

Seminar on BOI promotion with a full house of Bangkok business professionals

September 3, 2019 12:00 am Comments Off

FRANK Legal & Tax hosted a seminar on BOI Promotion for Tech Startups, attended by a full house of businesspeople working in the tech and digital sectors in Bangkok.

The event provided an opportunity to explore BOI promotion related to the tech industry in Thailand and gave insights into the various BOI categories that are relevant to IT, software development and tech business.

The audience asked a number of questions based on their own experiences of planning or trying to pursue BOI promotion in Thailand.

The event was a success, drawing attention to the importance of the rule of law in doing business in Thailand, and raising awareness of the ways in which business people in Bangkok can take advantage of BOI promotion.

FRANK Legal & Tax looks forward to continuing events related to important legal issues and we welcome any questions you may have about doing business in Thailand by contacting us at [email protected]

Seminar on BOI Promotion for Tech Startups, Bangkok, 21 August 2019

June 17, 2019 12:00 am Comments Off

Starting a Business in Thailand is much easier when the Board of Investment (BOI) promotes you. Our next event will provide an opportunity to explore the BOI promotions related to the tech industry in Thailand. Our experienced Lawyers will be starting with a big-picture view of foreign business licensing in Thailand, which will be followed by insights into the various BOI categories that are relevant to IT, software development and tech business. In addition, our Managing Partner, Fabian Doppler will briefly discuss the legal process for start-ups in Thailand.

Register here

The admission fee will include:

Presentation by our experienced lawyers
Possibility to ask questions
A fine selection of high-quality finger food
Free beverage

Our Speakers:

Fabian Doppler – Managing Partner

Fabian Doppler is a founding partner of FRANK Legal & Tax, Bangkok. He focuses his practice on corporate and commercial law, as well as real estate law, advising clients on a number of regulatory, compliance and transactional matters. He has developed a specialty in providing advice in the areas of corporate legal structuring, licensing and contract negotiations for foreign direct investment in Thailand. He counsels discerning corporate clients at C-level, from the point of planning the market entry and support in the operational phase through to successful resolutions of legal disputes.

Rangsarit Suwanarat – Specialist Corporate law

Rangsarit Suwanarat is a Thai attorney with more than four years of litigation experience and more than three years of corporate experience. He has represented individuals and juristic person clients in civil cases and represented a foreign company in a rehabilitation case at Thai Bankruptcy Court. Mr. Suwanarat supports company registrations for Thai and foreign clients, trademark registrations, applies for foreign business licenses, juristic person life insurance, brokerage license as well as applies for Board of Investment Promotion. He has developed a specialty in contract drafting and providing advice on taxation

The meeting will be on August 21, 2019 at 6.30pm at the Novotel Bangkok Ploenchit Sukhumvit, 566 Phloen Chit Rd, Lumphini, Bangkok 10330 (see Google Maps: https://goo.gl/maps/UuPgNhKgBmN2)

FRANK Legal & Tax regularly hold public events, designed to support the business community in Bangkok.

Starting a business in Thailand: Upcoming Bangkok Event

October 2, 2018 12:00 am Comments Off

FRANK Legal & Tax will be holding another of our regular free events, designed to support the business community in Bangkok.

The upcoming event will provide an opportunity to explore the topic of starting a business in Thailand. Starting a new business can be both exciting and challenging, particularly in a foreign country. By attending our workshop, you will acquaint yourself with the legal procedures for opening a business in Thailand and be more familiar with the programs and opportunities available throughout the Kingdom. Please register using the form on this page.

In addition, Partner Fabian Doppler will briefly discuss the legal process for start-ups in Thailand.

Bangkok Property Market Performs Strongly in 2017

April 4, 2018 12:00 am Comments Off

In Q4 2017, the Bangkok condominium market grew steadily, particularly in the downtown area of the city. The number of new properties launched in 2017 overall also grew year on year by, with a 51% increase compared to 2016. Bangkok’s condominium market is likely to continue to grow in the future, given the many new mass transit lines and pipelines under construction (for example the MRT Pink Line, MRT Yellow Line and MRT Orange Line).

Land prices and the lack of remaining downtown new development space has opened the way for new locations to become up and coming property hotspots. Projects that are in prime or new locations with appropriate pricing to compliment market demand continued to performed well.

Due to the high proportion of units from projects that have been sold and that have been completed since 2014 in the downtown area, there does not currently appear to be a risk of oversupply in the area. Increasing land costs are a central factor that has resulted in price increases. More projects are opening up in new areas due to the construction of the approaching transport connections.

During the past one to two years, the average selling price of new condominium units has continued to rise at approximately 15–20% annually. Condominium prices are expected to increase similarly next year, particularly in in the downtown area.

Expatriates work permits in Bangkok increased 1.3% Quarter on Quarter and 3.1% Year on Year. Typically, expatriates have favoured certain areas and this continues to be the case, particularly the Sukhumvit, Silom/Sathorn and Central Lumpini areas, due to their easy access to the BTS Skytrain, along with convenient shopping and dining options.

Court revokes EIA report on luxury Bangkok project

September 24, 2017 12:00 am Comments Off

The Central Administrative Court has ruled against an environmental impact assessment (EIA) report of a high-end condominium development in the Bangkok Lumpini area, because it did not comply with the building control law and related regulations. The lawsuit was comprised of a group of 23 people and four agencies including the committee on building, land allocation and community service and the Office of Environment Policy and Planning.

The court said the EIA report for the Mahadlek Residences Condominium project had been unlawfully permitted by a committee of specialists responsible for reviewing the report. The court ruled that the approval was unlawful and the ruling would take effect retroactively from April 3, 2014.

In January, the Central Administrative Court withheld the project’s construction license. The license was distributed by City Hall’s Department of Public Works to the Office of the Privy Purse to construct the 41-storey condominium.

The court said the Office of the Privy Purse is not a corporation, but a “unit” under the Bureau of the Royal Household with no power to pursue a license. This right is reserved for corporate companies.

No project unit has been sold to the public yet, TFD CEO Apichai Taecahubol said.

If you would like any legal help with your property purchase, please contact us: [email protected]

FRANK Legal & Tax on MeetUp

January 11, 2017 12:00 am Comments Off

FRANK Legal & Tax is pleased to announce that we have started a “MeetUp” group. The Group aims to to create a forum for entrepreneurs and business start-ups where information can be obtained and ideas can be exchanged.

To see our profile and join, visit:
https://www.meetup.com/Establishing-a-Company-in-Thailand/
Our MeetUp events are planned to take place on a regular basis once a month.

Please feel free to come along!

Opening a bank account without a work permit at Bangkok Bank

October 29, 2015 12:00 am Comments Off

On a more practical note, clients often ask us for assistance with opening a personal bank account in Thailand. Such an account offers a lot of benefits, but many foreigners, who are only visiting Thailand for a relatively short period of time, have faced problems with meeting the bank’s requirements. Most banks ask for a business visa and a work permit, even for the setting up a simple savings account. But a few banks are more flexible than that. For example, foreigners can open a savings account at Bangkok Bank, which is one of the major Thai banks, and apply for additional services such as Debit Card, ATM and Internet Banking, by holding tourist visa only and without holding a work permit.

At Bangkok Bank, currently the documents that you need to provide are

1. your passport,
2. one further official identification document, such as a reference letter from your embassy, your home bank or another person acceptable to the bank.
3. your address in Thailand as well as your regular address in your home country.

Please feel free to contact us if you require assistance with handling your banking matters in Thailand.

Bangkok Hotel Occupancy Rates 2013

April 17, 2014 12:00 am Comments Off

The number of international tourist arrivals to Thailand in 2013 was a record 26,556,397 increasing by 19.8% Y-o-Y (year on year).

The number of international passengers disembarking at all AOT-managed airports increased by 14.7% Y-o-Y to 23,336,162 in Bangkok and by 25.8% Y-o-Y in Phuket. The largest feeder market was Chinese with a 17.5% share of total international tourist arrivals to Thailand in 2013. The number of Chinese arrivals grew by 69.1% Y-o-Y.

Overall in 2013, strong arrival numbers resulted in rising occupancy rates, despite the number of rooms in Bangkok growing by about 10% Y-o-Y. We also saw a fall in the number of new building permits being issued for new hotels.

We saw that room rates finally started to rise after being flat for five years. The performance of hotels of all grades in Bangkok had improved from last year. The average occupancy rate of hotels of all grades in Bangkok rose to 75% from 70% in 2012. The Average Daily Rate (ADR) was also on the rise at around THB 3,200 which was an increase of 7.0% Y-o-Y.

Source: CBRE (Thailand)

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