Define Thai Land Lease Agreement - real contracts
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The CCC of Thailand defines a lease agreement as a hire of property whereby a person agrees to let another person have the use or benefit of a property for a limited period of time and the lessee agrees to pay rent therefore. Payment of rental is an essential element of a lease agreement definition. If the right to use and possess the property was given without payment of rent it would not be a lease (e.g.right of habitation opposed to hire of property).
A written or oral lease agreement includes the exchange of promises and rights and obligations of the lessor and lessee or hirer. The relationship between the lessee and the owner is governed by the lease agreement and in addition by the section hire of property in the Thailand Civil and Commercial Code. The lessee's right of possession (his leasehold interest) is in certain situations further specified by the Thailand Supreme Court.
Only a written lease agreement is enforceable by action and a lease agreement exceeding 3 years is only enforceable for the term exceeding 3 years if the lease is officially recorded and entered into the local land office land registers. A lease is extinguished at the end of the agreed period without notice and is in principle also terminated at death of the lessee. A lease agreement under Thai law cannot exceed a period of 30 years, but may be renewed.
Thai land owners with proper ownership rights are in principle at liberty to do what they want with their land, including the right to hand over possession of his land to a foreigner or foreigners under a lease agreement. As foreigners are prohibited from owning land in Thailand a long term land lease agreement is a popular legal contract for foreigners to possess land and to obtain an interest in land in Thailand.
Only land owners who have an officially recognized right of possession or ownership (a proper land title deed), including the right to transfer the land to others, can record a lease in the registers of the land office. Only properly surveyed and titled land (title deeds Nor Sor Sam Gor and Chanote) is viable for long term lease. The land office will note the existing of the lease on the backside of the land title deed of the owner and on the original copy as kept in the official land register.
In the lease agreement is among others specified if the lessee is allowed to sub-lease the property or assign the lease to a third party and if the lease is transferable by inheritance to the heirs of the lessee. If these matters are not specified in the lease agreement and agreed upon between the parties Thai law specifies that the lessee in this case is not allowed to sub-lease or assign the lease and that the lease agreement is terminated at death of the lessee.
A long term lease agreement should be drafted by experienced legal professionals to assure proper protection throughout the term of the lease. As in any long term leasehold or freehold purchase of property due diligence should be conducted on the property (land) and the owner prior to signing the lease agreement or handing over money.
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Tags: Lease agreement, Thai law, Define: Usufruct, Define: Superficies, Start Real Estate Legal, Lease, agreement, 90-years, sub-rent, sub-lease
With so many foreigners now owning real estate under different leasehold ownership structures in Thailand it is not unusual for the heirs of a foreigner to encounter problems having to deal with transferring ownership of a foreign owned real estate property. Most problems can be prevented by having the lease agreement drafted or reviewed and explained by a legal professional familiar with Thai laws pertaining to leasehold in Thailand, and/ or by having a valid last will and testament dealing with the succession of the leasehold property.
