Property Lease in Thailand

If you want to acquire controlling rights for property in Thailand, one of the easiest ways is through a lease agreement. Leases in Thailand are commonly used for property in which freehold ownership rights are restricted for foreigners, such as houses and land. If you cannot buy or own a property due to these limitations, a long-term lease is a viable option.

This page will explain how leasehold agreements work in Thailand, what Thai law says about inheritance and other issues, and how you can lease land in Thailand for personal or business purposes.

How Leases Work in Thailand

A lease is a negotiable agreement made between two parties: the lessor and the lessee. As a lessee, you will sign an agreement with the lessor to use a particular property for a set period of time. Lease terms can be fixed or periodic and come in two forms:

• Short-term leases: These are generally valid for up to a maximum of 3 years, with the possibility of an extension. Any leases over 3 years must be registered with the Thai Land Department.

• Long-term leases: These are capped at a maximum of 30 years, with the option to renew.

While renewals of an expired lease are possible, it is not legally assured. To renew a lease, you must do it before or at the expiration of the lease term, and both you and the lessor need to mutually agree to the renewal. Upon doing so, you’ll also need to re-register the lease at the Thai Land Office.

As of this writing, pre-agreed multi-term lease renewals (such as the 30+30+30 lease) are technically possible, but not enforced by law.

Wills, Inheritance, and Transfers: What Foreigners Should Know about Thai Leases

While you can use a lease to secure certain property rights in Thailand, these agreements come with restrictions under Section 540 of the Thai Civil and Commercial Code (TCCC). To prevent fraud and legal issues, it is advisable to engage a Thai Property Lawyer to explain lease guidelines, review your contract, and protect your interests by researching the lessor and the property.

Here is a list of what you should know about leases in Thailand to help you plan ahead:

Drafting a Lease Agreement

Before you can lease property, you must sign a legally binding agreement with the lessor. Your property lawyer can help you with this by reviewing the agreement and negotiating terms on your behalf to ensure they are fair and compliant.

Registering a Lease

If the term of any particular lease is over 3 years, you will need to register the agreement at the local Land Office for it to be legally enforceable. The lessor must have a title deed that’s legally issued by the relevant authorities before the office will register the lease. Your lawyer can handle registration at the Land Department and file the required documents for you.

Constructing a House on Leased Land

Securing a land lease is one of the only ways foreigners can own a house in Thailand. While you typically cannot buy a house, you can build one and retain ownership rights.

If you signed a leasehold agreement on a plot of Thai land, you can build a house on it and own it in your name. But, before you can build a house, villa, or any other type of building, you must obtain a valid construction permit.

Inheriting a Lease

Leases are automatically terminated upon the death of a lessee in Thailand, and generally cannot be inherited unless the lease agreement specifically allows it. By negotiating inheritance clauses at the outset, you can include the lease in a Thai will.

Transferring a Lease

A lessee cannot transfer the lease without the lessor’s permission. As with inheritance, the lease agreement needs to specify whether you have the permission to transfer the lease to another person or sublease the property to a third party.

Leases as an Alternative to Land Purchases

Leasing land in Thailand is a viable alternative to buying it, as foreigners are generally prohibited from owning land, with limited exceptions such as BOI approval. If you want to purchase or own a house or another type of building that foreigners are restricted from owning, leases are a more affordable and straightforward option.

Unlike purchasing land as a foreigner, which requires meeting conditions such as setting up a Thai limited company or applying for promotion with the Thailand Board of Investment (BOI), most foreigners can enter into land leases without restrictions or preconditions.

Why You Need a Thai Property Lawyer to Help Secure Your Lease

Leasing a property can open you up to legal risks and financial repercussions, especially if it’s your first experience with Thai real estate and you don’t speak the language. This is why it's best to consult Siam Legal’s property team beforehand to overcome the complexities of Thai law and keep yourself safe.

As a full-service law firm with more than 20 years of experience in assisting foreigners with their property needs, our real estate lawyers have the expertise to help you apply for a lease while complying with Thai legal guidelines. We handle all the busywork on your behalf, including reviewing the lease contract to check for unfair clauses, assessing the lessor’s legal ownership rights, managing the registration process at the Thai Land Department for you, and more.

Contact Siam Legal today and book a consultation to secure Thai land the easy way and build the future you’ve been dreaming of.

Leases in Thailand, FAQs

Are there disadvantages to leasing property as a foreigner?

While leases are a straightforward way of securing a property that is generally restricted to you as a foreigner, there are some drawbacks. Some common issues include:

• Some landowners may be reluctant to renew a lease after its expiration.

• While you’re able to sue a lessor or landlord for breaching lease terms, the process may be time-consuming and expensive.

• Most banks will not issue mortgages for leased properties.

• Renewals are generally not guaranteed.

Do you have to register a short-term lease with the Thai Land Office?

No, short-term leases that are valid for less than 3 years do not require registration with the Thai Land Department. You must register any lease with a term of 3 years or more.

Can the lessor terminate a lease?

In some cases, the lessor may end a lease early. This may occur if you breach the lease contract, such as if you decide to terminate the lease before the designated end date. The lessor may also terminate the lease if you violate a contractual term. In such cases, they may retain your deposit. This is why it is important to have a legal professional review the contract before you sign it to ensure you do not lose your deposit due to unfair contract terms.

Contact Us

If you have any questions regarding leasing a land or property issues that need to be addressed, feel free to contact us.