A Key-money is a sort of ‘Goodwill’. Key-money very often applies at commercial lets. Charging key-money protects the landlord avoiding that the tenant vacates the property, just loosing 2 months deposit, before the contract term expires.
When key-money is being charged, the monthly rental fee is often relatively lower then in cases where no key-money is being charged. It is strongly advised to make a firm understanding what will happen AFTER the contract term.
Often tenants assume that nothing will happen and the rental contract will simply extend; unfortunately the landlord often only renews the contract only if another term of key-money is being paid. This could seriously jeopardize the tenants’ cash-flow position and harm or even vanishes complete businesses.
If the tenant wishes to assign his contract to another tenant (basically when he sells his business), the landlord very often totally neglects the existing contract and will try to charge key-money to the new tenant. Renting commercial property in Thailand really requires a specialist agent with expertise and strong negotiating skills to handle the deal for you.