Property Leasehold in Thailand. In Thailand, the lease of immovable property is a well-established legal mechanism governed primarily by the Civil and Commercial Code (CCC). For foreign nationals, who are generally prohibited from owning land under the Land Code B.E. 2497 (1954), leasehold arrangements have become the principal alternative to secure long-term access to property.
Despite its prevalence in residential and commercial sectors, leasehold in Thailand remains a personal right, with limitations in duration, inheritance, and enforceability—especially in the absence of proper registration. This article examines the leasehold system in depth, focusing on legal classification, registration requirements, foreign party considerations, and structural challenges.
II. Legal Framework
A. Civil and Commercial Code (Sections 537–571)
Under the CCC:
“A hire of immovable property for a period exceeding three years is not enforceable unless made in writing and registered with the competent official.” — Section 538
This means that any lease over three years must be registered at the Land Office to be valid and enforceable beyond the three-year period.
B. Definition of a Lease
A lease (เช่า, chao) is a contractual agreement whereby the lessor allows the lessee to use immovable property in exchange for compensation for a specified term.
| Attribute | Explanation |
|---|---|
| Nature of right | Obligatory right (not a real right unless registered) |
| Possession | Granted exclusively to the lessee |
| Title transfer | Not involved |
| Ownership rights | Remain with the lessor |
III. Maximum Lease Terms and Extension
A. Standard Duration
The CCC sets the maximum lease term for immovable property at 30 years, regardless of the value or type of property. Any agreement purporting to grant a longer term is reduced to 30 years by law.
“The duration of a hire of immovable property shall not exceed thirty years. If it is made for a longer period, such period shall be reduced to thirty years.” — Section 540
B. Renewals and Extended Use
Renewals are possible but:
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Must be executed as new contracts
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Must be re-registered to be enforceable
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There is no statutory guarantee of renewal
The common marketing practice of “30+30+30 year lease” is legally misleading. Only the first 30 years is registrable. Renewals depend on the willingness of the parties and the prevailing legal environment at the time.
IV. Lease Registration Procedure
A. Registration Authority
Leases exceeding three years must be registered at the Land Office where the land or property is located. The lease is annotated on the Chanote (title deed) and becomes part of the public record.
B. Required Documents
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Land title deed (Chanote)
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Original lease agreement
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Identification documents of both parties (Thai ID or passport)
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Corporate documents, if either party is a juristic person
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Spousal consent, if land is marital property
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Power of attorney, if a representative acts for any party
C. Registration Fees
| Type of Fee | Rate |
|---|---|
| Registration fee | 1% of total rent over the lease term |
| Stamp duty | 0.1% of total rent over the lease term |
Lease value is often calculated using official appraised rental rates, not market rates, at the discretion of the Land Office.
V. Leasehold Structures for Foreigners
As foreign nationals are prohibited from land ownership (with narrow exceptions under BOI promotion or Section 96 of the Land Code), long-term leases have become the standard legal avenue for property use.
A. Residential Use
Foreigners frequently lease land or condominiums for private residences. Typical structures include:
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Lease of land with separate ownership of the building via a registered superficies
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Lease of condominium units, especially in projects exceeding the 49% foreign ownership quota
B. Commercial Use
Foreign individuals and companies lease property for:
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Retail outlets and commercial offices
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Hospitality businesses (e.g., hotels and resorts)
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Industrial projects, sometimes with special approvals (e.g., EEC or BOI zones)
VI. Limitations of Leasehold
Despite its widespread use, leasehold in Thailand is not equivalent to ownership, and carries legal and practical limitations:
| Limitation | Legal Implication |
|---|---|
| Not a real right (except registered) | Cannot be enforced against third parties unless registered |
| No automatic inheritance | Lease does not pass to heirs unless specifically permitted and accepted |
| Renewal not guaranteed | Depends on the parties and future legal conditions |
| Cannot mortgage leasehold (easily) | Few banks accept leasehold as collateral, except with strong supporting rights |
| No control over land ownership | Lessee has no say in land sale or succession |
VII. Leasehold vs. Alternative Use Rights
Thailand recognizes other use rights, such as:
A. Superficies (Sections 1410–1416 CCC)
Allows ownership of structures on another’s land. Often paired with leasehold for foreigner-built houses.
B. Usufruct (Sections 1417–1428 CCC)
A personal right to use and derive benefit from land—terminates upon death and is not transferrable.
C. Right of Habitation (Sections 1402–1409 CCC)
Grants a person the right to live in another’s building—rarely used due to limited flexibility.
| Aspect | Leasehold | Superficies | Usufruct |
|---|---|---|---|
| Duration | Up to 30 years | Up to 30 years or for life | For life or fixed term |
| Transferable | If permitted by lease | Yes | No |
| Inheritable | Only if accepted | Yes | No |
| Registrable | Yes | Yes | Yes |
| Foreign Use | Yes | Yes | Yes |
VIII. Inheritance and Death of Lessee
A registered lease does not automatically pass to heirs unless:
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It is explicitly stated in the lease
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The lessor consents to transfer
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The Land Office accepts the registration of the transfer upon death
Otherwise, the lease terminates upon the lessee’s death (Section 569 CCC).
Best practice: Insert an inheritance clause, identify successors, and ensure the lessor’s prior written consent is obtained and registered.
IX. Early Termination, Subletting, and Transfer
A. Early Termination
Lessee or lessor may only terminate the lease early if:
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The lease includes a termination clause
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There is a breach of contract
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Both parties mutually agree
B. Subletting and Assignment
Not automatically permitted. The lease must include an express provision allowing:
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Subletting to third parties
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Assignment of lease rights
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Registration of the new lessee at the Land Office
Without such clauses, the original lessee must obtain new approval and registration for any assignment.
X. Leasehold in Condominiums
Foreigners may lease condo units, particularly when:
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The building’s foreign ownership quota is full
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They require long-term use without ownership
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The developer structures the project with long-term leasehold units
Key Notes:
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Only 30 years can be registered
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Any additional “extension options” (e.g., 30+30 years) are contractual promises, not enforceable real rights
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Condominium leases do not give juristic person voting rights, unless otherwise agreed
XI. Legal Risk and Due Diligence
To reduce legal exposure, a leasehold structure should always involve:
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Full title search and encumbrance check at the Land Office
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Confirmation that the lessor is the legal owner and has capacity to lease
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Clear clauses on termination, subletting, renewal, and inheritance
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Proper registration to ensure enforceability
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Legal drafting consistent with Thai legal standards and Land Office practice
XII. Conclusion
Leasehold in Thailand provides a viable, legally accepted method for both Thais and foreigners to use immovable property without breaching ownership restrictions. However, it remains a contractual and time-limited arrangement, not equivalent to ownership.
A leasehold agreement’s value, security, and enforceability depend entirely on registration, legal drafting, and the integrity of the parties involved. Misconceptions—such as automatic renewals, inheritance, or “quasi-ownership”—must be avoided in favor of legally sound, properly registered, and transparently structured contracts.