Property Lease in Thailand

Leasing a property is among the best option that an expatriate has when it comes to possessing a property in Thailand. Since he cannot own a land outright as prescribed by the current laws, the foreigner can secure leasehold on a land for a number of years.

But, as familiar as it may sounds, the leasehold process and the applicable laws in the Kingdom may be considerably different with that of any other country. Therefore, it is imperative that a foreigner who is planning to lease a property in Thailand should begin his search by getting acquainted with the laws and process in leases in the country.

Time Period and the 90 year structure

A lease that exceeded three years will have to be registered at the Land Office and the maximum period is 30 years.
Now, some property agents and owners may bring up the 90 year structure as an option.

Well, there is no such thing as a straight 90 year lease. The only allowable time period is 30 years and depending on the agreement between the lessee and the lessor, it can be renewed for another 30 years.

However, renewal and re-registration of the said lease will not be automatic as it will still be subjected to another round of scrutiny by the officers of the Land Office.

Lease Contracts

The Thai language is commonly used in drafting the lease contract. Now, this can pose problems on an expatriate because he does not understand a thing on the contract and he can never be sure of its contents.

So, the best thing to do is to hire the services of a Thai-registered property lawyer who is fluent to both Thai and English.

Why should the lawyer be fluent on both? Because it is a fact that the foreigner needs an accurate translation of the contents, on laws and language, of the contract and the best person to do such is a lawyer who is good in both languages.

Is the property transferable?

In cases where the lease period is not consummated because of the untimely demise of the lessee, the lease contract will not be automatically transferred to any heir of the lessee because the agreement was executed between the original lessee and the lessor. A negotiation should take place between the lessor and the heir of the original lessee whether to renew the said lease or to consume the remaining period of the original lease but this time, it will be under the name of the heir of the original lessor. If an agreement is reached, this should be registered and the land office to make it official.

What if it is the lessor who will pass away, is the agreement still valid?

Yes, it will still be valid. The heir of the original lessor or the new owner of the property will have to honor the existing agreement until it will expire.

Due Diligence for a lease?

Whenever a foreigner decides to conduct property searches and then enter into a contract agreement, it is advisable that he should be prudent in every action that he will take. Before agreeing into something, before he will affix his signature on a contract and pay, he must be sure that everything, like the supporting documents and title deed, is in order and that the lessor is the actual owner of the property.

Due diligence can be costly for an average person but it can be his savior from falling into a pitfall and spending more money in the future than what is actually needed.

Due diligence will help determine the authenticity of the documents and title deed. It can also check the background of the owner because it may not be known to the lessee that the lessor simply misrepresented or is actually not the owner of the property that he is about to lease to you. Also, due diligence can pave the way for a title check and determine if it is free from any encumbrances by accessing court and other official records.

When should a Property Lawyer be hired?

Some sources may say that in order to save on costs, a lawyer should only be hired when the contract draft is already in place. Meaning to say, only hire a lawyer when the expatriate is about to affix his signature on a contract. This is not advisable.

Hiring the services of a lawyer at the earliest possible time, even prior to any commitments with a prospective lessor is the best thing to do. A lawyer does not only provide the foreigner an expert legal advice, he can also conduct due diligence and then review and provide revisions on the contract too.