By Wandee (Lekky) Iamyoung
In Thailand it’s common practice for tenants to lose their entire deposit if they terminate their lease early. Landlords rarely make an exception just because a tenant has found a better home elsewhere, although there are circumstances in which I can often negotiate a better outcome for you, and I discuss these a bit further down the page.
There is, however, the possibility of including a “diplomatic clause” in your contract before moving into your new home. Under the diplomatic clause the landlord agrees to refund a tenant’s deposit in the event the tenant is forced to terminate the lease early due to unforeseen employment-related circumstances such as an unexpected transfer overseas. It’s much more common for expats who move around a lot, obviously; hence the name.
For the clause to be valid, the tenant has to provide evidence such as a letter from their employer or the cancellation of their work permit. Usually the clause applies to a multi-year lease, and only kicks in after the first 12 months is completed. Some diplomatic clauses progressively decrease the amount of deposit that is withheld over time, e.g. 100% is withheld in the first year, 50% in the second year, 0% in the third year. I’ve helped negotiate a few clauses of both types in recent months.
Many landlords are understandably reluctant to include a diplomatic clause unless they have access to a regular stream of expats who can easily replace the tenant. For example, many apartment blocks have ongoing relationships with certain multinational companies as a quid pro quo for a diplomatic clause. It gets a bit harder for me to negotiate the inclusion of the clause with the owner of a single property because they’re understandably worried worried about their income.
As I said earlier, without a diplomatic clause its usual in Thailand for renters to lose all or part of their deposit if they break the lease early for whatever reason. Quite often I can negotiate a better outcome with the landlord if I’m able to quickly find a new tenant to takeover the lease, or if I’m confident the property is attractive enough for me to find someone easily. It easier if you have a multi-year lease and have stayed for at least 12 months, in which case I might be able to negotiate a partial loss of deposit. It’s very easy to negotiate on compassionate grounds, such as returning to your home country for urgent medical attention; which unfortunately happened to my client recently. Yes, landlords are humans too! At 1D Property, we always checks your rental agreement to ensure appropriate terms are in place before you sign.