How Getting a Hotel License Thailand Now Requires Just Got Easier
Obtaining a hotel license Thailand law requires for older buildings became significantly easier in 2016 — relaxed Building Control Act requirements now apply to three categories of existing properties. Most villa or condominium owners renting out their property on a short-term basis — that is, for periods of less than 30 days — are most likely violating the Hotel Act (2004) if they do so without a hotel license. Potential penalties for such a violation include significant fines, imprisonment, or both.We have previously explained that most villa or condominium owners renting out their property on a short-term basis — that is, for periods of less than 30 days — are most likely violating the Hotel Act (2004) if they do so without a hotel license. Potential penalties for such a violation include significant fines, imprisonment, or both.
Historically, however, obtaining a hotel license has been very difficult — if not impossible — for most such owners. A major reason is that, to obtain a hotel license, a property must comply with the certification requirements for hotel use under the Building Control Act (1979) (“BCA”).
Despite this, many investors are tempted to — and currently do — invest in properties to participate in this lucrative market without the requisite hotel license. At the same time, tourism remains one of the most significant contributors to the Thai economy, creating tension between the need to enforce the law and the desire to maintain a robust tourism and investment market. As some, including this firm, have pointed out, one way to reconcile these legitimate but competing concerns would be to liberalize the restrictions applicable to certain properties. We are pleased to see that the current government has recently taken a step in that direction.
On 19 August 2016, Thailand’s Ministry of Interior Ministerial Regulation Prescribing Descriptions of Other Types of Building Used for a Hotel Business Operation 2016 under the Building Control Act (1979) (the “MR”) came into effect.
The MR remains in effect for five years. It applies only to buildings that existed before it came into force, where the owner wishes to use the property as a “Hotel” (as defined under the Hotel Act) offering either:
(a) Rooms only; or (b) Rooms plus food service/restaurant facilities.
Three categories of buildings are eligible for this re-classification:
- Type 1: A building with no more than two floors and no more than 10 rooms;
- Type 2: A building that is not Type 1 and has no more than twenty rooms; and
- Type 3: A building that is not Type 1 and has more than twenty rooms.
The MR relaxes various hotel-usage building requirements under the BCA for these building types. For example:
Minimum open/unused space
| Building Type | Old Regulation | Under the MR |
|---|---|---|
| Types 1, 2, and 3 | 30% of the area of the building’s largest floor (MR No. 55, Clause 33) | 10% of the area of the building’s largest floor |
Minimum walkway width
| Building Type | Old Regulation | Under the MR |
|---|---|---|
| Type 1 | 1.5 m (MR No. 55, Clause 21) | 1 m |
| Type 2 | 1.5 m | 1.2 m |
| Type 3 | 1.5 m | 1.5 m |
Minimum stair width
| Building Type | Old Regulation | Under the MR |
|---|---|---|
| Type 1 | 1.2–1.5 m, based on upper floor area (MR No. 55, Clause 24) | 0.9 m |
| Type 2 | (same basis) | N/A |
| Type 3 | (same basis) | N/A |
Minimum live load
| Building Type | Old Regulation | Under the MR |
|---|---|---|
| Type 1 | 200 kg/sq m (MR No. 6) | 150 kg/sq m |
| Type 2 | 200 kg/sq m | 200 kg/sq m |
| Type 3 | 200 kg/sq m | 200 kg/sq m |
An application to change a building’s usage to a hotel under the BCA must be completed within five years from the date the MR came into force. However, if structural modification is required before applying for the usage change, that application (or notification under Section 39(bis) of the BCA) must be filed within two years.
It should also be noted that the building must still comply with other BCA regulations governing hotel usage that were in force at the time the building was originally constructed or altered — including requirements relating to building height, setback, and parking.
Finally, the MR does not mean that all owners wishing to rent their properties short-term — even those whose properties do or can comply with the MR — will now be able to do so legally. Other laws must still be considered and may restrict such use, particularly with regard to condominiums, and even more so where foreign owners are involved. Caution and legal clarity are therefore advisable before relying on the MR. That said, the MR represents a welcome step in the right direction for Thailand’s tourism and real estate investment markets.
Property owners considering whether to pursue a hotel license Thailand now makes more accessible should confirm their building qualifies under one of the three eligible types, and act within the relevant filing deadlines, since the MR’s relaxed requirements remain in effect for only five years from its 2016 effective date.