What Types of Rental Homes Could Get You Sued?Legal Issues Every Landlord and Tenant Should Be Aware Of

Renting out a house or condominium may seem simple — just agree on the price and sign a contract. But in reality, leasing property, or even allowing someone to stay without a proper agreement or without verifying tenant information, can lead the landlord to become a defendant in a criminal case or a party in a civil dispute without even realizing it.

In recent years, there have been multiple cases where landlords faced legal action because their rental properties were used as hideouts for fugitives, bases for criminal activity, or even venues for money laundering. These problems are especially complicated when the tenants are foreign nationals, making the legal proceedings more complex and harder to control.

What Types of Rentals Are Considered “Risky”?

1. No Written Rental Agreement
According to the Civil and Commercial Code, Sections 537–571 regarding “Lease Contracts,” property rental should be executed with a formal written agreement. The contract should specify the rights and obligations, rental period, rental fees, termination conditions, and the return of security deposits.
Without such documentation, in the event of disputes—such as property damage by the tenant or the landlord withholding the deposit—legal action may be difficult.

For instance, one tenant rented a condominium in Bangkok for one year, placing a two-month security deposit totaling over 40,000 baht. Upon the contract’s expiration, the tenant moved out after giving proper notice as agreed. However, the landlord refused to return the deposit, claiming the room had scratches and required complete repairs. The outcome was as follows:

• The tenant sued in civil court, submitting photo evidence of the room before and after the rental period.
• The court ruled that the damage was considered “normal wear and tear” from usage and did not constitute excessive damage.
• The court ordered the landlord to return the full deposit with interest.

According to Sections 537–540 of the Civil and Commercial Code, the landlord must return the security deposit at the end of the lease if there is no serious damage. If the landlord refuses without a valid reason, it constitutes a “breach of contract,” and the tenant has the right to take legal action.

2. Failure to Conduct Background Checks on Tenants
In many cases, foreign tenants have been found using fake documents or entering the country on tourist visas but illegally settling down.  If property owners rent out properties without proper verification, they could be deemed as providing shelter to individuals residing illegally, which is punishable under the Immigration Act.

3. Accepting Only Cash Payments, Without Using Bank Transfers
Accepting only cash payments without any record of bank transactions could expose the landlord to allegations of money laundering and tax evasion.
It is advisable for property owners to require tenants to pay rent through bank transfers to ensure that there is verifiable documentation for future reference.

4. Subletting Without the Owner’s Knowledge

In some cases, tenants rent a property and then illegally sublet it to others, such as daily tourists or even unlawful groups. If any criminal incidents occur at the property, the landlord will immediately fall under suspicion.

Rights and Duties of Tenants and Landlords Under Civil Law

In a lease agreement, both parties have rights and obligations that must be upheld:

• Tenants are obligated to take care of the rented property and must not alter it without permission.
  
• Landlords are obligated to deliver the property in usable condition and must return the security deposit at the end of the lease if no damage has occurred.

If either party breaches the contract, the other party has the right to terminate the agreement or sue for damages.

In one case, a tenant refused to vacate the property even after the lease had ended, requesting an additional month. In response, the landlord locked the property and cut off the water and electricity, which constituted a violation of the tenant’s rights. Ultimately, the landlord was ordered to pay damages for exceeding the legal boundaries.

The Role of Lawyers in These Situations

Lawyers play a crucial role in providing consultation before entering into rental agreements.
They can assist in document verification, translate contracts for foreign tenants, and support clients in both civil and criminal litigation if problems arise, such as:

• Tenants failing to pay rent
• Tenants damaging the property and refusing responsibility
• Landlords refusing to return the security deposit
• Questions regarding taxes or related financial transactions

Renting Out a House Is Not as Simple as It Seems

Without careful preparation, landlords can easily become entangled in legal disputes or unknowingly place themselves at a disadvantage. Having a well-drafted contract, thoroughly vetting tenants, and consulting a lawyer before engaging in any major transactions are essential steps to ensure strong protection and to prevent future problems.

If you are a homeowner, tenant, or agent facing issues related to rental agreements, disputes, or communication with foreign nationals, Wongsakorn Law Office is ready to provide you with comprehensive legal consultation and support. With expertise in Thai law and extensive experience handling disputes between Thais and foreigners, we ensure that your rights and interests are fully protected.

Written by : Kannikar Charoenweerawong (Internship Student in Chinese Language)