Renting is another convenient solution for urbanites as nowadays condominium price has become higher. To own a residential property takes a lot of money, for the asset itself and the interests for the borrowing mortgage.
Therefore, such a solution has become quite popular. Nonetheless, one cannot pay a sum of money to the landlord and expect to move in right away.
Renting a condo unit requires a rental contract and some preliminary payments. It’s extremely important for a tenant to read the contract and judge whether the obliged payments are reasonable. Many Expats are still unclear about this topic and this article will help clarify.
Deposit or Booking Payment
Deposit or Booking Payment is the first sum of money a tenant is obliged to pay the landlord. Previously, a deposit can be paid 1-3 years in advance (for the 1-year rental contract). However, in 2018, the government has changed the term to be within 1 month in a bid to protect consumers.
For a rental contract under 6 months, the amount of deposit can be different, agreed by both parties. In any case, the landlord needs to sign the Letter of Intent before receiving this deposit from the tenant, which obliges him/her not to rent out the unit to other tenants in the meantime.
After the rental contract has been signed by both parties, the paid deposit will be counted as the tenant’s rent for the first month.
Damage Deposit is an exclusive sum of money a tenant pays to the landlord as a security that the rented unit will be returned in good condition. When the rental contract expires, the landlord must return this damage deposit back to the tenant, unless there’s damage to the unit or furniture. If there’s any damage found, the damage deposit will be collected by the landlord as specified in the contract.
Normally, the damage deposit is equal to the amount of monthly rent (typically for the 1-year contract); for example, if the rent price is 15,000 baht per month, then the damage deposit is 15,000 baht.
In 2018, the government has enforced a new law that the landlord must pay the damage deposit back to the tenant within 7 days after the expiration of the rental contract, as long as the unit is returned in good condition.
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