Crackdown on Airbnb style holiday rentals in Phuket
Crackdown on Airbnb style holiday rentals in Phuket
Short term holiday rentals not only raise safety concerns and pose a nuisance for neighbors, they also fall foul of the law
Short term “holiday rental” platforms, such as Airbnb have flourished in recent years, but concerns as to their safety abound, and calls for heavier regulation are commonplace.
Perhaps unbeknownst to many who use such platforms, the practice of short term lets in Thailand within unregistered buildings is illegal.
Phuket condo owners who have been earning extra income this way will now have to cease such activity or face fines and even jail time.
A formal notice was issued last week by the Phuket Provincial Land Office, and sent to all 234 registered condo projects in Phuket, which includes 26,071 condo units.
The notice read:
To managers/developers of condominiums,
Today, there is a lot of news about condominium developers/owners renting out rooms or buildings that they have ownership of to foreigners or tourists on a daily basis (daily rental) rate that generate income as if they were a hotel (under the Hotel Act 2004).
“This type of operation is causes a public nuisance for renters in the same complex and creates unsafe places for tourists, which may lead to loss of life and property. It is inacceptable to operate an illegal hotel. The penalty for this is up to one year in jail or a fine of up to B20,000, or both.
More: Alternative short-term rentals gaining popularity in Singapore
Generally speaking, the Airbnb business model is based on evading regulations and circumventing the law.
However, as Desmond Hughes, of Asia based law firm Hughes Krupica explained to Property Report:
“Airbnb and companies like them are not responsible for legal compliance of the landlords and tenants. Therefore, no reliance or burden can be shifted away to them in general terms.”
Hughes urges condo owners to take heed of Thai laws and understand that the responsibility to comply is on their own shoulders.
“When it comes to individuals using their properties for standalone occasional rental, they must have regard to the laws of Thailand and cannot rely upon the use of an internet portal to somehow ‘escape’ from regulation. If rentals are made for non-nightly and non-weekly use and for periods longer than 30 days then such use may not fall within the definition of section 4 of the Hotel Act (2008). If investigated, the onus would be on the person being investigated to prove the type of use. Lying or deceiving the authorities about such use could carry serious penalties including criminal penalties”
Although many condo owners are keen to continue with these rentals, most professionals in the industry agree the relevant laws should be viewed positively.
Duncan Worthington of Infinity Communications, a public relations firm with numerous real estate clients told Property Report:
“The recent announcements about clamping down on real estate owners renting out for short-term that is less than 30 days, is ultimately a good thing. This is not a new law. It is a long-standing law that is starting to be enforced. For fairness and stability in the market if the laws are applied equally then that is a good thing long-term.”
Read next: New Airbnb chief practices what he preaches
Source: Property Report