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Home › Rent your property › Land lease agreement

Learn more about Land Lease Agreement

This land lease agreement allows the tenant to use land owned by the landlord in exchange for rent. Land leases work very similarly to traditional real estate leases, and tenants can enter into both residential and commercial agreements. If the intended activity on the Land is a commercial activity, it will be essential to add all the descriptions related to this activity to avoid any future difficulties between the owner and the Tenant. Most land leases are unrestricted, allowing the Tenant to build a temporary or, in some cases, permanent structure at its own expense. With this land lease agreement, the land is leased and includes the necessary provisions to help you protect your asset while receiving payment for the use of the land.

Table of contents

What types of land can be leased?

A land lease can be on bare land or on arable farmland. It is also possible to enter into a lease on a garden. In the latter case, it can be either a garden that is an outbuilding of the main building or a garden that is rented independently and like the main building.

What is the legal protection of this land lease agreement?

Our land lease agreement includes the following terms:

Party Information: Who are the parties to the land lease?

Payment of Rent: What is the amount of rent paid by the tenant?

Area of the land lease: How much land is being leased?

Term of the lease: When will the lease end (i.e. after a fixed number of years or if a condition or event occurs)?

Tenant’s expenses: Can the landlord keep the improvements or reimburse the tenant for them?

Use: Choose whether the land can be used for commercial or residential purposes.

Access: Confirm whether the landlord retains the right to enter the land at certain times and for specific purposes and specify the gates or roads the tenant may use.

Amendment: Indicate whether future amendments to the land lease agreement must be in writing.

Liability: Indicate whether the tenant is required to carry liability insurance for the property and whether the landlord will be released from liability for any injury or damage that may occur to the property during the tenant’s lease.

Subletting: Indicate whether or not the tenant may sublet the property.

Utilities: Indicate whether the landlord or tenant is responsible for the provision of electricity, water, sewer, roads or any other services required for the use of the property.

Security Deposit: The landlord may require an additional amount of money as security for any damage caused to the tenant’s property during occupancy.

Termination: Specifies how and if the landlord and/or tenant may terminate the land lease agreement, usually for non-payment of rent or failure to maintain the property.

Who must pay for the maintenance of the land?

According to Thai law, the tenant must take care of the routine maintenance of the land, its annexes and its exterior. At the time of his departure, he must also give you back an accommodation in conformity with the one he had received at his arrival. Therefore, the Tenant has the obligation to maintain the garden which he/she has the exclusive use of.
However, you and your Tenant can decide how to cover these expenses. During the term of the land lease agreement, the Landlord will continue to own the land, but the Tenant will have the use of it.

Here are some possible solutions:

➤ The Landlord pays all maintenance expenses
➤ Landlord pays for parts, but Tenant pays for labor
➤ The Tenant pays up to an agreed-upon amount, and the Landlord pays the rest for major repairs

What if there are buildings on the land?

The land may include residential buildings such as houses, villas or bungalows. You can choose to include them in the lease, or you can even continue to reside in one of the buildings as part of your agreement. However, even if you do not charge additional rent for these buildings, you must have a residential lease agreement in place to control who lives in the houses, how long guests can stay and how repairs are made.

Can a foreigner obtain a land lease in Thailand?

Yes, a foreigner can lease land and get full use of it in Thailand. Indeed, the law allows foreigners to obtain long-term land leases. Indeed, foreigners can have the use of a land but cannot own it.

Do I have to register the land lease with the Land Department?

Leases of less than three years do not need to be registered, but registration with the Land Department is required for leases of three years or more. It is strongly recommended that long-term leases be registered so that the lessee can enforce his or her right to use the land.

Can you lease your land for a short period of time?

In practice, the owner leases the land for a minimum of one year. However, these contracts may be subject to a shorter or longer rental period. The rental dates are therefore flexible. Foreigners use long-term leases, for periods of 30 years, called “Leasehold” contracts, to obtain possession of a property for a long period.

What are the advantages of a land lease?

A foreigner’s right to lease is officially recognized by Thai law. In comparison, a limited liability company has several shareholders who may have different interests than you, which brings potential risks to you and your objectives. A corporation is also subject to regulatory requirements such as filing annual balance sheets with the tax department.

Can a land lease be renewed in Thailand?

The landlord and the tenant expressly agree to extend or renew the land lease agreement. Thereafter, no guarantee can be given for the timely renewal of the lease, except by introducing extension clauses in the land lease agreement. However, a landlord may refuse to sign any record of extension of the lease beyond the expiration of 30 years. Although the tenant can take legal action against the landlord for breach of contract, the ensuing legal proceedings can be costly and time consuming. It would therefore be wise to consider your individual needs and obtain legal advice from competent and reputable Thai lawyers before making a decision.

What are the risks of renting land without a contract?

Without a written lease agreement for your land, the rights of each party may not be protected if a disagreement turns into a lawsuit. Instead, a written contract can help clarify in advance such nuanced details as how much to pay, when to pay and late fees. Also, in the case of future tenant construction, the landlord could build structures on the land after the lease ends with the landlord’s consent. Finally, a sublease could be contemplated and agreed upon with said contract.

When entering into a land lease agreement with your Tenant, make sure that:

➤ The Tenant will pay you rent on time
➤ Will get extra charges if the rent is late
➤ Keep the deposit in case of damage to the land
➤ Will terminate the contract and evict the Tenant in the event of a lease violation
➤ Enforce the contract in court for serious violations of the lease terms

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