Renting Property in Thailand

A Guide to Long-Term Lease Agreements and Other Options by Isaan Lawyers

As a sought-after retirement destination, Thailand offers several ownership options for foreigners looking to stay in the country long-term. One of the most popular options is purchasing a condominium, with Thai law allowing foreigners to buy up to 50% of units in a condo development using foreign currency. Alternatively, foreigners can invest a minimum of 40,000,000 Thai Baht in the country’s economy and, upon approval, purchase a lot of up to 1600 square meters for use as their primary residence.

However, many foreigners find renting property in Thailand via long-term lease agreements to be a favorable option, especially when seeking a family home or a condo in a development that has reached its foreign ownership limit. Long-term lease agreements can also be seen as promising investments, but it’s crucial to seek advice from a reputable Thai lawyer before signing such an agreement. This ensures proper protection and a thorough due diligence investigation.

Duration and Renewal of Long-Term Lease Agreements:

Foreign nationals should be aware that not all leases are registered at the Land Department of Thailand. You should be aware that long-term lease agreements of up to three years may not be registered.

To secure longer leases of 30 years, the lease agreement must be appropriately registered. Without registration, the foreign party will not be protected from eviction during that period.

Many long-term lease agreements include renewal clauses, allowing for a 30-year lease renewal after the initial 30 years have passed.

However, the renewal is not automatic, and it requires the cooperation of the landlord. Foreigners must ensure they have explicit reassurance from the landlord about the possibility of lease renewal before signing.

Selling a Lease Agreement:

Suppose a foreigner purchases a leasehold of a condo with a 30-year lease agreement and decides to move on after a decade. In that case, they can sell the condo by subletting the remaining years of the agreement, provided the original lease agreement permits subletting. Alternatively, they can assign the remaining period to an external party before the lease term expires, but this also requires permission outlined in the original lease agreement.

Property Sold by Landlord: Thai law categorizes lease agreement provisions into lease rights and non-leased rights. Lease rights include the lease term, rent, usage, right to sublet, and maintenance responsibilities, and these provisions remain active between the tenant and the next landlord if the property is sold or the landlord passes away. On the other hand, non-leased rights, such as renewal and succession clauses, are not enforceable on the new landlord under these circumstances.

Buying an Apartment or Condo Leasehold:

When a condo development reaches its foreign ownership limit, foreigners can still own a condo through a 30-year leasehold arrangement by paying the developer upfront. However, caution must be exercised to ensure the developer fulfills their obligations. The developer may still be liable for annual taxes, and all rights related to the management of the homeowners’ committee should be transferred to the buyer.

Leased Condo Passed to Heirs:

If a tenant with a 30-year lease passes away before the lease term ends, the heirs will not automatically gain rights to the property for the remaining term. To mitigate this, the tenant can include the heirs’ names on the lease agreement or add a succession clause, requiring the landlord to pass the lease to the tenant’s heirs. However, succession clauses are only enforceable between the initial tenant and landlord and do not apply to subsequent landlords.

Renting a Family Home:

Many foreign retirees prefer single-family homes with gardens over apartments. Renting such a home can be arranged through a short- or long-term lease agreement, similar to condo or apartment leases.

The Right of Superficies in Thailand:

Foreigners cannot own land in Thailand but can own buildings. Some foreigners opt to rent land, build homes, and register a right of superficies, which acts as a lease agreement. This right can be registered for 30 years with a renewal clause, and tenants’ heirs automatically inherit the right. Tenants can obtain construction permits and build on the leased land, and the landowner is incentivized to honor the renewal clauses. After the lease term, the landowner can either purchase the house built on the property or request its removal to restore the land to its original condition.

Conclusion

Overall, renting property in Thailand offers various possibilities for foreigners seeking a long-term stay in this beautiful country. However, it’s essential to understand the specific lease agreement terms and seek legal advice to ensure a smooth and secure rental experience.

Property purchase by foreign nationals or their families can be complicated and troublesome especially where you are unfamiliar with Thai Law and regulations.

That is why it is Imperative that you seek expert advice and assistance from Isaan Lawyers. Our commercial and Property department have been assisting Expats and Overseas Nationals together with Thai Nationals with leases and renting property in Thailand, sale and purchase agreements, due diligence, restrictions and Leins, loans and mortgages, property rights and more since 2006.

Contact Isaan Lawyers

When investing what can be significant amounts of money can you afford not to protect your rights and assets.

Contact Isaan Lawyers if you are considering renting property in Thailand or purchasing with family, and we will guide you through the minefield of Land and Property within Thailand.

Read more about Superficies here.Superficies Thailand – Agreement and Contract – Isaan Lawyers

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