Leasing the Property in Thailand
Thailand is one of the most desired countries in Asian by foreigners for investment and settlement. Although Thailand have a number of provisions for foreign entities, there are still great options particularly with property matters.
Leasing a Property in Thailand is the most considered option by Foreigners in terms of property acquisition matter. Unlike other methods of property acquisition in Thailand, this is the easiest and probably the less stressful, but it still must be thoroughly processed and as a foreigner, you will need an expert or a lawyer on real estate matters in Thailand.
Foreigners cannot own a land in their name as a freehold but under the Civil Commercial Code of Thailand, foreigners can lease the land for 30 years and can be renewed for another 2 terms or equivalent to 60 years; 1 term is 30 years. The first renewal of 30 years is guaranteed but the following extension of the leasehold is subjected upon approval and is not guarantee but can be stipulated under the Land Lease Agreement between the Lessee and the Lessor.
One of the most important factors about Lease Agreement is to make sure that it also suggests and indicate future extensions/renewal of the lease, it must indicate that the Lessor will allow the Lessee to extend for another term or more depending on what both parties agreed on. This is important when filing for registration and/or renewal of the Lease.
For leases less than 3 years, there is no need to register at the Land Office, but for leases more than 3 years, an agreement should be made between the Lessee and the Lessor and have it registered at the Land Office.
According to the Civil and Commercial Code of Thailand,
“Section 538. A hire of immovable property is not enforceable by action unless there be some written evidence signed by the party liable. If the hire is for more than three years or for the life of the letter or hirer, it is enforceable only for three years unless it is made in writing and registered by the competent official.”
If you are looking forward to leasing a property in Thailand you must know that it is important to have a Lease Agreement between you and the juristic owner of the property that you’re interested with leasing. Lease Agreement are common especially for foreigners in Thailand, it also varies as some would like to construct buildings and villas and even establish the property for subletting.
Lease Agreement is an important document not just for the sake of your protection but to also include all your rights and obligations as a Lessee as well as the rights and obligation of the Lessor. The agreement will also state specific provisions such as allowing you to sublease the property or construct a building or even to make alterations and changes.
Our law firm has years of experience when it comes to drafting land lease agreement between a Foreign Lessee and a prospective Thai Lessor. Our goal is to make sure that the Lessee will get as much benefit as we can and to also prioritize the renewal or extension of the Lease.