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.
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.
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.
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.
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.
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.
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|