Leasehold is an alternative to the rare freehold type of ownership in Thailand since the laws of Thailand do not allow foreigners from acquiring real estate properties in the kingdom. Properties such as land, house, and condos are normally leased out for 30 years with the option to extend the lease for another 30 years as applicable. The maximum lease term is 90 years. Whether it’s a short term or long term lease, the foreigner and the landlord should enter into a comprehensive lease agreement to safeguard each other’s interests in the leased property.
Before engaging into a lease agreement in Thailand, consider the following tips. Since many are unfamiliar with the laws governing the Lease Agreements in Thailand, it is recommended to contact a lawyer to address these matters.
Lease agreement involving immovable properties must be in writing and must be signed by the parties as stated in The Civil and Commercial Code of Thailand.
Lease Agreement Duration
A Lease Contract is valid only for a period of 30 years with the option to extend the lease for another 30 years as applicable or subject to the approval of the competent official in Thailand. The lease extension must be re-registered.
The lessee is permitted to sublease the property if it is stated or allowed in the lease agreement. Otherwise, the lessee cannot sublease the property nor transfer the rights over the property leased.
The Rights to the Lease To Heirs
Should the lessee die before the term of the lease, the remaining term of the lease won’t be passed on automatically to his/her heir. The transfer of the rights is subject to the agreement of the parties. If the transfer of rights to the heir has been agreed, such agreement shall be registered with the land office department of Thailand.
Extinguishing the Lease Contract
At the end of the term of the lease, the lease contract shall be terminated without notice. Normally, either party may terminate the contract at the end of each payment provided that notice of at least one rent period is given, but no more than two months notice need be given.
Always check all the terms in the lease contract before signing the agreement. Make sure that you understand all the terms stated in the contract and that everything is legal and enforceable. Make sure that you have done a due diligence to the property, an ocular inspection of the site for you to check that the property you are going to lease is in good condition. The agreement should also contain provisions for the payment of expenses at the end of the lease.
Seek the help of a property lawyer in Thailand who will help you with all the requirements and legalities before engaging into contract of lease.