Protect Your Home Investment
A large number of foreigners lease land over the long term since they cannot own land in their name as a freehold. The foreign tenant does not own any interest in the land. This is generally completely acceptable with the Thai government and the foreigner can have a wide spectrum of rights to the land during the term of the lease. The Foreigner may, if the lease stipulates it, even be able to own any building structure on the land in his name.
If the Lessee is renting an undeveloped piece of land and he or she intends to build his or her own structural building (house) on the designated land, it is best to specify the ownership of the building in the original agreement. If it is not specified and the lease expires, then the building will be considered the property of the landowner.
If the tenant would like to transfer his rights to the land he will be limited to assigning those rights to the land to a third party (if allowed by the Lessor or the lease). In order to be valid, any lease longer than a three year period must be registered with the local Land Office where the land is located. Leases for up to three years may be entered into with a simple contract and do not need to be registered. Any lease longer than 3 years would be registered at the local Land Office and on the back of the title deed or Certificate of Use. Registering the lease at the local Land Office allows any potential third party purchasers of the land to know of the tenant’s rights to the land during the period of the lease. If a third party buyer was to buy it, the tenant’s rights would be acquired for the remainder of the term of the lease.
Many foreigners are told by sellers or developers that they can get the initial 30 year lease plus a second term of 30 years plus an additional third term 30 year lease option. However, under the Civil Commercial Code only the first 30 years is guaranteed valid for the tenant’s rights to the lease (once the lease is registered at the local Land Office). There are court decisions which indicate that the renewal clause is personal to the landlord and thus may not be binding on his heirs or future landlords (Lessor).
Also a lease contract can contractually bind the lessor to agree to a second term of 30 years, but again this is only enforceable after the owner of the land goes with the tenant to the Land Office and registers a 2nd term of 30 years. If the owner of the land does not wish to register the second term of thirty years, the tenant could file a lawsuit with the civil court against the owner, reason being breach of a contract between two individuals.
A lease for industrial or commercial purposes can be granted for a term of up to 50 years and this may also include an option to renew for a further 50 years.