It is a goal for many people to become a landlord. They purchase property for the purpose of renting it out for passive income. The property owner interviews perspective tenants, ensures that they sign a lease agreement, and that they put down a deposit. However, all of this does not prevent bad tenants from revealing themselves after they have moved into the property.
The tenant may stop paying the rent. The tenant may not maintain the property. Or the tenant may violate the terms of the lease such as allowing multiple families to move in or allowing pets to live in the home. So what is a landlord supposed to do?
The first thing the landlord needs to do is to review the lease agreement. The lease agreement generally contains the terms that the tenant agreed to abide by. A properly prepared lease should contain the grounds for the termination of the lease and the notice requirements for the eviction if the tenant does not respond to the notice.
It is also important to review the length of the lease agreement. If the end of the lease term is near, it might be easier to just send notice to the tenant that the lease going to be renewed and the tenant will be required to leave the premises at the end of the lease.
There are many foreign nationals who lease property on a 30 year lease. One of the important elements of a 30 year lease is that the lease must be filed with the local land office. Under Section 528 of the Thai Civil and Commercial Code, if the lease agreement is not in writing, signed, and registered with a “competent official”, then the lease agreement is not valid for more than three years or the life of the parties.
After the end of the lease period, the lease agreement is generally extended on an indefinite period. This allows any of the parties to provide notice of the termination of the lease with a minimum of one rent term notice or a maximum of two months’ notice. If the tenant refuses to leave the property, the landlord can file a lawsuit against the tenant.
If the landlord is able to establish in court that the tenant violated the terms of the lease agreement and that they abided by the legal requirements for eviction, the court will rule in favor of the landlord barring extenuating circumstances. If the tenant refuses to abide by the order of the court, the landlord can request an enforcement of the judgement.
The landlord then can request the police to remove the tenant from the premises. They can also terminate electrical and water service to the property. It is important to note that the landlord cannot enter the property, remove the tenant’s belongings, and change the locks on the door unless it is allowed within the lease agreement or with a court order. During the entire legal process, the landlord can file a claim for the rental costs and opportunity cost as a result of the tenant refusing to leave the premises.
Leasing property is popular way to obtain passive income or to pay for mortgage property. However as with any type of income generating business, there are risks. For landlords, there is the possibility of renting to tenants who do not maintain the property, violate the rules of the lease agreement, or stop paying the rent.
The legal process for evicting tenants can take multiple months. It is important to scrutinize potential tenants and check their rental history and current financial status prior to entering into a long term lease agreement.
Mr. Robert R. Virasin is a licensed U.S. Attorney and managing director of Virasin & Partners. Mr. Yutthachai Sangsirisap is a licensed Thai Attorney at Virasin & Partners. They can be reached at firstname.lastname@example.org or at www.virasin.com.