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My Condo is not an illegal hotel!

Updated: May 5, 2020

The Hotel Act (2004) requires any place that provides accommodation for a period of less than 1 month in exchange for payment is defined as a “Hotel”, and therefore requires to apply for a hotel license.

However, a license is not required but only inform the city hall or district office.

1) the accommodation has a maximum of 4 rooms for rent within the same building or in multiple buildings within the same project; and

2) the accommodation cannot accommodate over 20 guests at a time;

3) the money earned is an “extra income”.

The penalties for running a hotel without a license are the following:

1) imprisonment for up to one year; and/or

2) a fine of up to THB 20,000; and |

3) a fine of up to THB 10,000 per day throughout the period of violation.

Only owners are liable. In the event a property (condominium unit, villa) is rented out by a management company or a realtor, such party acting as an agent shall not be liable.

Indeed, the applicant of a hotel license must be the owner or the lessee of the property. Therefore, the Condominium Juristic Person also called the “CJP”, cannot apply for such license. Moreover, under the Condominium Act (B.E. 2522), the CJP’ objectives are to manage and maintain the common area of the condominium, it is not to be in charge of renting out condominium units on behalf of the owners. In other words, the CJP shall not assist owners in renting out their units but the CJP shall tolerate the owners who are doing so since it is not illegal. Unfortunately, well too often threatening messages from CJPs in condo lobby can be read saying that owners renting for short terms will be reported to local authorities.

A Condo-hotel on the other hand is a “mixed use” building with a condominium having a residential use as well as a hotel having of course a hotel use. In such case, a hotel license shall be obtained. Having a hotel operating in a Condominium building shall be well thought in advance... often at the conception stage as if you did not plan well, it can be very difficult to apply for a hotel license at a later stage because of the many specific rules (car parking, lift design, sewage, health and safety features, EIA reports...).

Thailand has a very strong hotel and tourism market. The hotel industry tries hard to protect that market and in particular to limit the competition from the ever-increasing hotel style websites such as AirBnB often leading to the misconception that renting a villa or a condo unit for less than 30 days is illegal. There is no such law in Thailand.

This article is a general briefing note which does not replace the advice for any individual situation, the firm shall not be rendered liable for its content.


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