Lease Land For Your Lifetime
Except in rare cases, a foreigner (a non Thai person) cannot acquire land ownership title in Thailand. As a result, leasing a plot of land for 30 years and registering this long term lease of land contract at the local Land Office is one of the ways known and practiced by foreigners.
Please note that I do not recommend a 30 years lease of land contract plus promises by landowner to renew the lease of land contract at the end of the 30 years. (This is explained in my article - Does a 90 years Lease of Land Exist in Thailand?
Foreigners are commonly advised to enter into a risky 30 years lease of land contract with promises by the landowner to renew the lease. However, these foreigners may not be aware that a lease of land contract can be made and registered for the lifetime of the foreign lessee. Leasing land for the lifetime of the lessee or of the landowner is expressly provided by Section 541 of the Civil and Commercial Code:
'Lease contract can be made for the duration of the life of the lessor or of the lessee'
The lease will be registered as a lease for the lifetime of the foreign lessee. This registered right on the land or 'real right' is binding on any third party for the lifetime of the lessee, this would include the landowner's heir(s). In other words, no one, not even the landowner's heirs, will have any rights over the leased land unless and until the lessee dies.
A Land Office rule, effective since December 2008, confirmed that a lifetime lease registration made for the lessor's (landowner) or for the lessee's lifetime is only applicable to individuals or 'natural persons'. The Land Office cannot proceed with the lease registration if the foreign lessee is a company, a partnership or any kind of juristic entity.
The lease registration fee payable at the Land Office is calculated based
on the rental amount for the first 30 years lease period. The foreign lessee's
responsibility here is 50% of this fee, unless agreed otherwise between the
landowner/ lessor and the lessee. Also, there is a stamp duty payable.
Written by David Tan. David is a Lecturer of Business Law at Asian University and author of the book "A Primer of Thai Business Law", available online at www.chulabook.com. In Bangkok the book is available at all Kinokuniya and Asiabooks bookstores. Any questions or comments to David should be sent to blas.inter at yahoo.com
David Tan Articles:
Does 90-year Lease Exist? - David Tan is a Lecturer of Business Law at Asian University. He has kindly provided us with a series of legal articles looking at property and employment law in Thailand. We start by clearing up the 90-year lease issue.
Foreign Ownership of Land? - David Tan continues his series of legal rights articles with an enlightening look at the thorny issue of foreigners owning land in Thailand.
Buying a Condo in Thailand - How to proceed with due diligence when buying a condo in Thailand.
Escrow Agents in Thailand - How to use escrow agents in Thailand when purchasing a property.
Property Purchase Deposits - If you pay a deposit or reservation fee to a property developer, does that mean you have a sale contract?
Lifetime Land Lease? - Is it possible for a foreigner to lease a plot of land for their own lifetime?
Employee Failing Probation - David Tan's series of legal articles move on to employment law. He starts with a look at the requirements for terminating employees who are on a probationary period.
Fixed Employment Contracts - Fixed period employment contracts are a technique employers can use to avoid having to pay severance and provide prior notice of employment termination to employees.
Sacking an Employee - What are the legal implications for an employer to sack an employee in Thailand?
Selecting Outsource Company - If you outsource in Thailand, what rights do the outsource company's employees have from your company?
Contract Protection for Buyers of Condos - How can you be sure your new condo will turn out like the pictures in the glossy brochure?