Leases are a period of time in which can be acquired in order to possess a certain property for a period of time as granted by the property owner. The maximum period of a lease is 30 years. If a lease is for less than three years, this does not need to be registered at the land department, however if the lease is for more than 3 years, the lease does need to be registered at the relevant land department in order to be considered valid and to create an encumbrance on the land. Even upon the death of the lessor, the lease is registered and attaches to the land.
Since foreigners are not able to own land in Thailand, the most common way to acquire the property is by way of leasehold in which a land owner can lease their house in order for a foreigner to be able to possess that for a maximum period of 30 years. Upon the expiration of 30 years, it is upon the discretion of the owner if the lease is to be granted a renewal for an additional 30 years as renewal periods do not exist in Thailand. For this reason, it is imperative that lease contracts are carefully drafted in order to ensure that a lessee’s rights are fully protected and that renewal period can be incorporated into an additional contract to ensure that a supplementary 30 plus 30 years are indeed covered.
Leases are registered at the relevant land department and are provided by the land department in Thai, however, it is suggested that a lease contract be drafted in English with a Thai translated version, instead of the use of the standard lease contract contained at the land department in order to ensure that all rights of both the lessor and the lessee are covered. The cost for registration of a lease is approximately 1.1% of the lease value. It is also suggested that leases should include family members to be identified as co-lessee’s in order to ensure that upon your demise, the lease then transfers to the co-lessee. Particulars of the lease period and the names of the parties are then outlined on the back of the title deed in which the lease is based on.
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