Foreigners who are able to acquire land through their spouse or a nominee are resigned to the fact that even though the funds used to purchase the Thailand property are exclusively their own, they can never have the title of ownership over these properties.
A private agreement may be drawn bestowing full rights to the foreign national, but whether such a document will be valid evidence to claim possession over the land against third parties or against the government is questionable.
To be able to retain possession and control over this property in Thailand, a lease agreement is drawn. A lease agreement is a contract whereby the land owner, called the lessor, allows another person to occupy and make use of a certain property. Under Thai law, lease agreements covering a period of less than three years do not require registration at the Land Department. Therefore, a lease agreement covering 30 years to validly bind third persons must be registered.
The officers at the Land Department have the discretion to allow registration or not. Its foremost concern is that the agreement is not intended to blatantly circumvent the prohibition of land acquisition by foreigners.
The law mandates that the maximum period of a lease agreement allowed is 30 years. In a 30-30-30 year lease agreement, only the initial lease agreement can be registered. The conditions on the subsequent registration of the 2nd and 3rd term lease will depend on what the parties agreed into. It is advised that a lawyer should be the one to draft these agreements, because the parties’ rights and obligations are dependent as to how the terms and conditions are drawn.
To fully protect one’s interest, one should have at least a working knowledge of the basic Thai laws and the common practice exercised at the Land Department. A reputable law firm will be able to discuss this matter clearly and extensively.
This article was provided by Siam Legal, an international law firm with offices in Bangkok, Chiang Mai, Hua Hin, Pattaya, Phuket, and Samui. Siam Legal publishes legal guides to buying property in Thailand on its website.
Siam Legal International
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