Writing Lease Agreements
As a foreigner, you cannot own land as freehold, the preferred method for most foreigners of acquiring land is through leasehold. As a foreigner you can acquire the right to use the land and register the right for a maximum lease term of 30-year lease at the Land Department.
While the terms of every lease will differ, there are certain basic clauses all lease agreements should include. These provisions answer the questions who, where, when, what, and how. Many lease agreements in Thailand are written in Thai and then translated into the preferred language of the tenant.
1. ‘Who’ the Agreement is Between
Every lease agreement must clearly identify who the lease is between. In the case of a lease for rental property, this agreement is between the landlord, and/or the landlord’s agent, and the tenant.
2. ‘Where’ the Property is Located
You will want to include the name of your property, if you have a name for it, such as “Baan Thai Estates,” or “Ocean View.” You will also include the full mailing address of the property: house number, street name, town, state and postal code.
3. ‘When’ the Contract is Valid
You will want to include the exact date (day, month and year) the lease begins and the exact date (day, month and year) the lease ends. Even though the lease may be for a year, do not write “this lease is for one year.” It can be confusing and contradictory if the lease term isn’t an exact year.
Leases for more than 3 years are able to be registered at the Land Office, which will then further protect your interests. As a foreigner, you can construct a house on the land if the lease agreement permits. A construction permit must be applied for and subsequently you will own the building in your name.
Importantly, lease agreements of 3 years or longer are valid even upon the demise of the lessor, or in the event that the land is sold.
The renewal of lease in Thailand is not an automatic right, all parties must take an active step to renew the lease towards the end of the initial term.
4. ‘What’ the Tenant Has to Pay
It is essential to include the full amount of rent due over the period of the entire lease and then break it down by the amount due per month and the date on which this rent is due.
5. ‘How’ the Contract Becomes Binding
If the lease is not signed and dated, it is worthless. The signatures acknowledge that the landlord and the tenant agree to abide by the terms of the lease. The landlord, or the landlord’s agent and tenant must sign and date the lease before 2 witnesses.