About lease agreements

Land law has been kind of difficult for foreigners in Thailand. We foreigners can not own any land than in exceptional circumstances, and even then under strict restrictions. However, there are people who would like to have a home of their own. For some, it is enough housing in stock blocks, but some would think of a nice villa on the coastline of the Gulf of Siam.

Even in buying euphoria, everybody should think about where to put their money. If you are planning to invest money on a lot, building a house on it or buying a house in Thailand, think it over well before making a decision. You may own the house but not the land underneath it. To be in control, almost like you being the owner, is to rent or lease a house. This will be refered to next.

According to land law, a less than 3-year real estate rental agreement does not need to register to the land register authority. All from 3 to 30-year contracts have to be registered so that they would be qualified. More than 30-year contracts, once again, can not exist according to the land law.

Real estate agents fiercely try to sell and sometimes they have to use every possible means. This kind of ownership is, of course, what makes most foreign buyers to hold back, because 30 years is a reasonably short time to invest millions of bath in real estate for rent. Not to mention the fact that it is not your land but still remains the land of the owner. Your value does not rise, but on the contrary, when time goes by it falls! A neighbor with other ownership arrangements, let's say Swedish Åke, keeps shouting over the fence every summer, how his and Birgitta's house has again raised its value and you are thinking how your lease is nearing its end.

Real estate brokers will have to invent something else. "Well, let's state here that the agreement is renewable" ,invents an ingenious broker. You will see a lot of marketing of lease agreements which will be renewed in 30 years, or even that it is yet another time renewable; even the ad that "30 + 30 + 30" years lease agreement. This is very questionable marketing, which would be against laws of consumer protection if we were in a country with those kinds of laws.

WAKE UP people! 30 years are 30 years, and not 90 years!

30 years is what land law agrees. Land law is also about the different rights in lease agreements. This kind of right may be that the parties of lease agreement make a registration of agreement which says that it will be renewed after 30 years with same conditions. This registered agreement makes the landlord committed to you for the next 30 years also. BUT, this kind of agreement binds only this owner. If the owner dies before 30 years have gone by, there is no commitment for heirs who inherit the land. The owner can also sell the land and there is no commitment for the new owner. Even if the owner is a company, there is no guarantee that it will be the owner in future. It should also be in mind that the owner can also pledge the land and the new owner hardly wants to have any tenants.

The third 30-year period in marketing is something that does not exist according to land registration. And, even though it would be, few companies pull ahead 60 years, with no changes, and the physical person, the owner, he should be quite young now so that he will be alive and willing to sign again in 60 years. This third "30" is then of course, possible bilateral agreement, but let's assume that the seller is a foreign managed real estate project. to sign the next lease agreement. Yeah right, as if they would have any extra energy to do so with their walkers assisting them.