The Lease(tenancy) agreement in Thailand

Translation Thailand lease law

   Lease or rent of land, house or condominium for residential purpose by foreigners is governed by civil and commercial code sections 537 to 571. Foreigners are under Thai law allowed to lease real estate property for up to 30 years and the law is applied in the same manner if the lessee is a foreign or Thai national.

Lease term and registration of the lease agreement

      A lease (rental) agreement exceeding 3 years must be registered with the local land office to be enforceable over 3 years. The lease must in any case be registered with the land department within 3 years of signing and beginning of the agreement. Under the civil and commercial code the maximum lease term shall not be over 30 years. Any longer term in the contract to lease shall automatically be reduced back to 30 years (section 540). Also pre-signed or pre-agreed lease renewals are not accepted under Thai law and any agreed consecutive lease terms shall be deemed as part of one lease and reduced to 30 years (section 546). A lease may only be renewed upon expiration of the lease but it must not exceed thirty years from the time of renewal.

Legal aspects of lease and rental in Thailand

Characteristics of long term tenancies of land and/or house or apartment:

1. A written rental or lease agreement is enforceable by legal action (a verbal agreement not);

       II.      A rental or lease up to 3 years can be written in another language and does not need to be registered with the land department;

     III.      A rental or lease agreement exceeding 3 years term must have a Thai script version registered with the land department;

    IV.      A lease agreement can only be registered over titled property (land with a proper title deed)

      V.      A registered leasehold cannot exceed a term of 30 years, the term may be renewed after that, but renewal options are as mere personal contract promises not binding upon third parties such as successors;

    VI.      A lease agreement in essence creates for the lessee a personal right of use and possession and he can only sub-lease or sell (assign) his leasehold interest to another person if this is agreed in the lease agreement;

   VII.      A lease is under Thai hire of property laws automatically terminated upon death of the lessee, but not upon death of the owner (section 569);

  VIII.      A lease registration fee (for registered leases exceeding 3 years) shall be collected at the rate of 1% of the total rental throughout the lease term and stamp duty shall be collected at the rate of 0.1%, also over the total rental throughout the lease term;

    IX.      A sublease, rental or lease income is subject to personal income tax.

   In a leasehold purchase by a foreigner in Thailand the most complicated part of the transaction is the drafting of the terms and conditions and structuring the lease in a way that it offers the best protection for the foreign leasehold. The lease agreement must be drafted by an experienced property legal professional and include the necessary protection or the lease may not be enforceable throughout the term (e.g. terminated upon death of the lessee). There are various ways to draft a lease or hire of property agreement in Thailand, but generally the lease agreement must be written in Thai and comply with the civil code and land office guidelines. The lease with a foreigner must under these guidelines be will be examined by the land official before registration and can for example not include the right to transfer to freehold or prepaid additional lease terms in a renewal option.

Example Rental agreement pdf file 

reference: tranlation Thialand lease law

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