Buying real estate property in Thailand for foreigners usually includes a lease agreement because of foreign freehold ownership restrictions. Buying property for foreigners in Thailand could mean a lease of an apartment, or land and house or just land. Only true condos registered under the Condo Act offer freehold ownership for foreigners in Thailand.
A lease agreement for a property purchase in a residential complex (leasehold apartment or villa) often includes mandatory rules and regulations of the project, a maintenance and property management contract, and sometimes even a rental pool agreement governing sub-rental of the property.
What is lease in Thailand? Lease in Thailand is a prepaid rental contract with a maximum term of 30 years. Rent is calculated yearly but paid in advance for the term of the tenancy.
Lease is placed under the section contracts in Thai law and governed by the specific section Hire of Property in the Civil and Commercial Code. A leasehold in Thailand is therefore not a fixed asset, not a mortgage-able asset, not a trade-able asset, but in essence a tenancy contract.
Though any lease of immovable property must be registered on the title deed a lease agreement is not a property right attached to the property. This for example means that a lease is by law terminated upon death of the lessee. In addition, as a tenancy contract a landlord can evict a tenant (lessee) who does not comply with the contract or in case of a residential property in a development, the contract structure under which possession of the property is bought. Here lies the importance of the supplementary contracts in the purchase of any residential housing or apartment under a lease agreement in Thailan.
Supplemental contracts could put an significant extra financial burden on the lessee for the duration of his lease, or limit his rights and legal protection considerably.
The supplemental agreements are part of the tenancy and non-compliance could lead to premature termination of the lease agreement and loss of possession of the real estate property. Thailand does not know tenant protection and hire of property laws are considered pro landlord.
Is it all bad? No, some developers of leasehold property in Thailand have given the control over the residential comples to the residents of the project, but still the majority of the property developers aiming their services at foreigners in Thailand have set up more dictatorial contract structures in which they fully control every aspect of the development and ongoing costs and the tenants have to comply with the desicions made by the developer/ landlord.
The rule with every residential real estate project aimed at foreigner in Thailand (this could for example also be time sharing or fractional ownership) is double or triple check the agreements as written Thai law does not protect leasehold purchasers in Thailand and these contracts could follow you for the term of the leasehold.
A lease agreement for a property purchase in a residential complex (leasehold apartment or villa) often includes mandatory rules and regulations of the project, a maintenance and property management contract, and sometimes even a rental pool agreement governing sub-rental of the property.
What is lease in Thailand? Lease in Thailand is a prepaid rental contract with a maximum term of 30 years. Rent is calculated yearly but paid in advance for the term of the tenancy.
Lease is placed under the section contracts in Thai law and governed by the specific section Hire of Property in the Civil and Commercial Code. A leasehold in Thailand is therefore not a fixed asset, not a mortgage-able asset, not a trade-able asset, but in essence a tenancy contract.
Though any lease of immovable property must be registered on the title deed a lease agreement is not a property right attached to the property. This for example means that a lease is by law terminated upon death of the lessee. In addition, as a tenancy contract a landlord can evict a tenant (lessee) who does not comply with the contract or in case of a residential property in a development, the contract structure under which possession of the property is bought. Here lies the importance of the supplementary contracts in the purchase of any residential housing or apartment under a lease agreement in Thailan.
Supplemental contracts could put an significant extra financial burden on the lessee for the duration of his lease, or limit his rights and legal protection considerably.
The supplemental agreements are part of the tenancy and non-compliance could lead to premature termination of the lease agreement and loss of possession of the real estate property. Thailand does not know tenant protection and hire of property laws are considered pro landlord.
Is it all bad? No, some developers of leasehold property in Thailand have given the control over the residential comples to the residents of the project, but still the majority of the property developers aiming their services at foreigners in Thailand have set up more dictatorial contract structures in which they fully control every aspect of the development and ongoing costs and the tenants have to comply with the desicions made by the developer/ landlord.
The rule with every residential real estate project aimed at foreigner in Thailand (this could for example also be time sharing or fractional ownership) is double or triple check the agreements as written Thai law does not protect leasehold purchasers in Thailand and these contracts could follow you for the term of the leasehold.
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