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Issues Associated With Long Term Leases in Thailand

Transcript of the above video:

Recently, I was discussing with various different clients both in sort of a more serious and in a more casual manner the notion of the so-called 30 plus 30 plus 30 leasing scheme here in Thailand or the notion I should say of 30 plus 30 plus 30 leases here in Thailand. And to be clear, I've discussed this with Thai attorneys in our office. I'm not a specialist with respect to these matters but just sort of a repository liaison I guess and have the information with respect to the underlying details of such matters I guess.

So there's a notion that you can do a 30-year lease that has like an automatic 30-year renewal and yes pursuant to sort of the notions of contractual obligations, you could have a right of first refusal noted in a lease that being set or something similar there. But basically, Thai law is pretty explicit pursuant to provisions of the Civil and Commercial Code and other relevant regulations. With respect to immovable property a.k.a. real estate in Thailand, the maximum you can have with respect to a registered lease for residential property here in Thailand is 30 years. I state residential because in most cases, most foreigners who are looking at these long term lease schemes are probably looking for long term leasing for residential purposes commercial leases are slightly different. They're governed by different regulations and I'm not going to get into that specifically here.

The other thing to note is, in another video on this channel, we discussed the fact that there have been recent announcements that the government is seriously considering creating more extended term leases, 50-year, 99-year leases etc. Whether or not that actually is going to come to pass remains to be seen. As of the time of this filming, I haven't actually seen in practice that these are coming to fruition so for purposes of this video, we're simply talking about the sort of basic humdrum, 30-year registered lease.

Now to be clear and there's some speculation with respect to this and I do know Thai practitioners have totally told me over the years that it's theoretically possible you could have a 30-30-30 lease insofar as you can pre-register a 30-year lease at the Land Department to end the day after another 30-year lease which is already registered has come to an end. It is technically theoretically possible to do that however, it should be kept in mind that Land Department officials have an exceptional amount of discretion with respect to these matters especially if one is looking at this from sort of a Western paradigm.

With respect to how “bureaucrats” or civil officers should be operating, we sort of take the tact that they're basically like some sort of functionary if you will. They just undertake what the law prescribes. In Thailand, they have a much more discretionary character. They have their many more discretionary characteristics to their status as officers of the government with respect to land and real estate matters. So it's going to come down to dealing with the land office and sort of the interpretation of the law and this specific circumstances at issue as well. There are some circumstances where it may be possible that a sort of longer term lease scheme structure may be allowed depending on the circumstances. Foreigners actually can own land here in Thailand. For nationals, the restriction being the Minister of the Interior has to sign off on that foreigners purchase of the land or inheritance of land or whatever and basically you know counter sign to the notion of that that foreign nationals ownership of property in Thailand. This is quite different from notions again in the Western context with these issues

But basically, the thing to take away from this video is 30-30-30, you know 30 plus 30 plus 30 leases are theoretically possible and I state that I want that to be sort of clear, it is in theory possible to have a sort of a 90-day leaving 90-year lease scheme in a 30-30-30 sort of setup but it's going to be subject to exceptional scrutiny and to the discretion of the Land Department. It is not something that can simply be created between two individuals and just signed off on and have that document have full legal effect for the full duration of that 90 years. Moreover, it should be noted that all leases over the duration of three years have to be registered with the Land Department to be fully enforceable here in Thailand.

So any lease which is of an extent, longer duration will need to be fully registered in order to receive full enforcement under the laws of Kingdom of Thailand. Again it's very wise to contact professional legal services, Thai attorneys specifically with respect to assistance and guidance in these matters. We have Thai attorneys on staff at the firm. I'm not a Thai attorney. This is just information that I have been asked to impart in English and asked to relay it by way of comparison to the way Western common law legal notions sort of look at these issues. But that makes us very wise to go ahead and retain the services of a Thai attorney to assist in completing one and executing these documents in such a way that the individual gets exactly what he or she is trying to get with sort of full transparency and with full understanding going in.