Leasing a Property in Thailand

Buying a property in Thailand is harder than it seems. There’s lot of documents involved that you need to have, processes that requires your full attention and dedication, that’s why a lot of foreigners turn to leasing a property instead of buying it. Indeed, Thailand has a lot to offer, from its majestic beaches to its vast and wonderful nature all over the country, having a property from one of its glorious beach around Hua Hin, Phuket or Pattaya sounds wonderful, but it also means that you have to engage yourself in a difficult process, that’s why a for others to avoid a lot of hassle, they just lease a property in Thailand instead of buying it.

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Table of Contents:

1) The Civil and Commercial Code of Thailand. 2) Tips to consider before engaging on a Lease Agreement 3) Three Years lease of more 4) Documents needed for Lease Registration 5) Siam Attorney is here to help!
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1. The Civil and Commercial Code of Thailand about lease property.

Leasing a property in common in Thailand not just for its citizens but also for foreigners who found work, or is currently working in Thailand. The majority of foreigners who are leasing in Thailand are those who want to invest and live in Thailand. But before you lease a property please be reminded that the Civil and Commercial Code of Thailand strictly implement the following for leasing a property:

Section 537. A hire of property is a contract whereby a person, called the letter, agrees to let another person, called the hirer, have the use or benefit of a property for a limited period of time and the hirer agrees to pay rent therefore.

Section 538. A hire of immovable property is not enforceable by action unless there be some written evidence signed by the party liable. If the hire is for more than three years or for the life of the letter or hirer, it is enforceable only for three years unless it is made in writing and registered by the competent official.

Section 540. The duration of a hire of immovable property cannot exceed thirty years. If it is made for a longer period, such period shall be reduced to thirty years. The aforesaid period may be renewed, but it must not exceed thirty years from the time of renewal.

Section 541. Contract of hire may be made for the duration of the life of the letter or of the hirer

Section 572. A hire-purchase is a contract whereby an owner of a property lets it out on hire and promises to sell it to, or that it shall become the property of, the hirer, conditionally on his making a certain number of payments.

The contract of hire-purchase is void unless made in writing.

Section 573. The hirer may at any time terminate the contract by redelivering the property at his own expense to the owner.

Section 574. The owner may also terminate the contract in case of default of two successive payments, or breach of any material part of the contract; in which case all previous payments are forfeited to the owner who is entitled to resume possession of the property.

In case of breach of contract by default of the last payment, the owner is entitled to forfeit previous payment and resume possession of the property only after the expiration of one installment period.

Duration of The Lease Agreement: Generally, a Contract of Lease is valid only for a period of 30 years. No longer period is allowed. However, the parties are permitted to renew the lease agreement subject to the approval of the competent official and requires re-registration. There is, however, no guarantee that the renewal will be approved.

Formalities Required: The Civil and Commercial Code of Thailand states that a lease agreement involving immovable properties must be in writing and must be signed by the parties. Also, if the lease is more than three (3) years or for the lifetime of either the lessor or the lessee, the following conditions must be met:

  1. It must be in writing.
  2. The Thai Chanote or the Title Deed must be attached.
  3. It requires registration with the competent official, otherwise it will not be valid.

2. Tips to consider before engaging on a Lease Agreement

  • Observation the owner

First time when you see the owner, you should observe how they talk with you. Some owners are strict and difficult to take to. Some owners have the good corporation when we ask for something because along the way of your rent you may have some issues of the property and need help from the owner to solve that issue. If you rent with a good owner, you will have the happy time during your rent term.

  • Quality of the property’s equipment

You should make sure how its equipment looks like and is it still working such as laundry machine, water tap etc. Because the owner may declare that you damage it and ask for compensation when the agreement is finished. It is better if you can take the photo to make sure how equipment looks like and attaches with the Lease Agreement.

  • Talk with the neighbor

Not only create relationship with your neighbors, but also ask the character of owners from the neighbor how they look like. And the problem around the property such as traffic noisy, drug, security, rental rate of the property around and others. You can use this information in order to make decision that you are going to rent the property or not.

  • Check the agreement.

This part is very important! Because it will create your right and responsibility. You should make sure that the agreement is consistent with your intention and all terms enforceable by Thai Law. If you are not familiar with Thai Law, you must contact the lawyer who have experiences and use to handle the case before. Because they know how to protect your right since the first day.

3. Three Years lease of more

According to Civil and Commercial Code of Thailand, if you lease the property more than 3 years, you need to register the Lease Agreement with the Land Department to make your lease effective and enforceable and the Land Department will charge for registration fee 1%.

Here are some issues that you need to be careful before engage to Lease Agreement:

  • The Lessor is the owner of the property.
  • Who will be responsible for the property tax during the lease term?
  • Right to come inside the property during the lease term
  • Normal damage of the property/furniture after the lease is terminated.

4. Documents needed for Lease Registration

  • Original of title deed.
  • Three (3) copies of the Lease Agreement.
  • ID card or Passport of the Owner (prepare a copy)
  • House Registration of the Owner (prepare a copy)
  • ID Card or Passport of the Lessee (prepare a copy)
  • Power of Attorney of the Owner
  • Power of Attorney of the Lessee

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5. Siam Attorney is here to help for lease property in Thailand!

Siam Attorney has a wide array of services including property lawyer, we have many years of experience in handling leasing property issues in Thailand on multiply locations such as Bangkok, Phuket, Samui, Hua Hin, Pattaya, Chiang Mai etc.

We have extensive experience with Lease Agreements and we know how to make it more beneficial to our clients, we understand what we need to put on the Lease Agreement in order to secure our client’s benefit and due diligent the property before engaging into the Lease Agreement. Moreover, we also know how to prepare documents to support Lease Agreement because we’ve observed some owners who are trying to cheat, for example once the Lease Agreement terminated, they will not return the deposit provided by the lessee, asking money for compensation and more other stupid things. At Siam Attorney, we always prioritize our clients, we make sure that every step we take will be beneficial and favorable for them.

If you have questions or if you need our assistance with Leasing a Property in Thailand, please don’t hesitate to email us at support@siam-attorney.com or call us through Tel: + 66 (0) 2-258-1763 or Mobile: + 66 (0) 95- 750- 0888