Renting a factory, warehouse, or storage space has become a new option for businesspeople and entrepreneurs today. This is because leasing these places meets the needs for savings, flexibility, and convenience better than other options. However, one important step when renting a factory to a warehouse or storage facility is "the contract" itself.
Today, we will dive deep into what information should be known, precautions to take, or anything that business operators should know before signing a lease for a factory, warehouse, or storage. This is to ensure that you prepare confidently before leasing a factory or warehouse.
1. Read the lease contract thoroughly on every page
Before signing any contract, you should always read the details of that contract first. The same goes for a factory lease. Business operators or those wishing to lease a factory or warehouse should read the details in the contract and understand the various conditions thoroughly. This includes the lease period conditions, which typically are up to 3 years. If any lease agreement exceeds 3 years, it must be registered with the land department. Additionally, do not forget the monthly rental price, the amount of deposit, and advance rent that must be paid upon signing the lease. Also, if the lease agreement is in English, there should be a Thai version of the lease that is correctly translated and matches the meaning attached as well, since communication with Thai authorities still requires a lease agreement that has a Thai translation.
2. Taxes related to other expenses
The withholding tax on renting a factory, warehouse, or storage is normally 5% of the rental cost that the tenant must deduct, along with the property tax. The factory and warehouses are categorized as land or other buildings aside from agricultural and residential purposes. The tax rate is based on the appraised value of the property. Which party will bear this tax is an agreement between the tenant and landlord that should be clearly stated in the lease contract. Other expenses may vary according to each landlord's policy. They typically include property insurance, common area fees, and utility costs such as water and electricity.
3. Verify ownership of the leased property
Before signing a lease for a factory and paying a deposit, individuals wishing to rent a factory or warehouse should verify the ownership of the property by checking whether the landlord is the owner or has the rights to lease that property.
4. Scope of responsibilities
Typically, a factory or warehouse lease should clearly state the responsibilities of both the tenant and the landlord in the contract. The contract ought to specify which parts the tenant is responsible for maintaining, and which parts the landlord is responsible for.
5. Regulations of the project
In cases where the factory or warehouse to be leased is located within a project, the tenant should study and fully understand the regulations of that project to ensure orderliness. Normally, the project regulations should also be stated in the lease agreement.
6. Inspect the condition of the factory and warehouse to be leased
Before signing a lease for a factory, warehouse, or storage space, the tenant should inspect the condition of the factory and warehouse to be rented, including all equipment within the premises, to ensure they are in usable condition. If any part requires repairs, you should promptly notify the landlord. Also, check the total number of keys for the property to confirm they are correct and complete. Photos of both the inside and outside of the building should be taken, along with an inventory of materials and equipment in the rented factory and warehouse, attached to the lease agreement for future reference.
7. Insurance for the factory or warehouse
Insuring the factory or warehouse is very important, especially for factories or storage facilities, both in terms of the building and insurance for the machinery, equipment, and goods of the tenant. The lease agreement should clearly specify who is responsible for obtaining insurance for both parties, in order to protect against unforeseen events in the future.
8. Affixing stamp duty on the lease agreement
Affixing stamp duty on the lease of the factory or warehouse is crucial and often overlooked by the tenant and landlord. If the agreement does not have the stamp duty, it cannot be used as evidence in legal matters. Therefore, in the lease agreement, it should be clearly stated who is responsible for the stamp duty, which is calculated at 1 Baht per 1000 Baht of the rental price throughout the lease term, and it must be affixed within 15 days from the date of signing the lease to avoid penalties for late stamping.
Before signing a lease for a factory or renting a storage space, the tenant must thoroughly read the details and agreements specified in the contract. This includes the minimum lease term, rental price, deposit amount, project regulations of the factory and storage lease, as well as responsibilities for maintaining the factory and warehouse in the event of repairs. It's better to take a bit of time to ensure a correct mutual understanding between yourself and the landlord than to face issues later.
At-once has compiled a list of companies offering warehouses for rent, storage for rent, and factories for rent. You can reach out directly to inquire about the services of the companies you’re interested in on our website.
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