In this article, we will deal with such a way of registering real estate in Thailand as Leasehold. Quite often, developers and real estate agents offer to purchase an apartment or house in Leasehold, appealing to the fact that this is an alternative way to register ownership. So let's find out.
From a legal perspective, ownership must have three components:
- possession, i.e. actual possession
- use - the opportunity to benefit
- disposition - the ability to decide the legal fate
In the case of registration of real estate in Leasehold, the owner really has the right to own and use real estate, but for a limited period - no more than 30 years. But you don't have a right to dispose of the property, since the developer remains the actual owner. From this, it should be concluded that a leasehold is not a property right, and it is simply incorrect to call it that way.
Leasehold is a regular lease.
For how long can I register a property in Leasehold?
In Thailand, the maximum term for which a lease can be drawn up is 30 years. Further, the contract can be updated. It is noteworthy that quite often you can hear about renting at 90 years old, but this is also an incorrect statement. Firstly, because it is impossible to draw up a lease for 90 years, this is prohibited by law (read above, the maximum term is 30 years). Secondly, there is no legal limit on the number of updates, it can be 2, 3, or 10 times, it all depends on the consent of the parties.
What document confirms the Leasehold?
The only document that regulates the rights and obligations of the parties is the lease agreement. Therefore, it is very important to study all the clauses of this agreement. So a number of restrictions can be imposed on the owner by the owner-developer. For example, the obligation to participate in income programs that limit the period of residence, or the inability to transfer the lease before the end of the term of 30 years, or the inability to inherit the right to lease, and of course the ban on independent delivery of real estate, which is regarded by the owner as a sublease.
How and where is Leasehold registered?
In accordance with the SCKT, Book 3, Chapter IV "Lease of Property", a lease agreement over 3 years must be registered with the Land Department with an appropriate entry in the Chanot.
Participation in management
The tenant does not have the right to vote at meetings, unless otherwise specified in the agreement. Accordingly, without your knowledge and the ability to influence the decisions of the co-owners (owners), the amount of utility payments may be increased or the status changed from a residential building to a hotel.
Unpleasant moments that everyone is silent about?
The owner of the Leasehold depends on the owner-developer as much as possible. Even if your agreement provides for a priority renewal of the lease after 30 years, it may happen that the developer company will be declared bankrupt by this time, therefore it becomes impossible to renew the agreement.
You also need to understand that the owner-developer can sell or mortgage real estate without the consent of the Leasehold owner.
And the icing on the cake - the owner-developer has the right to terminate the contract with you unilaterally, in case you violated the terms of the lease agreement.
To summarize: Leasehold is not a right of ownership. This is a lease for a maximum period of 30 years. The rights and obligations between the owner-developer and the tenant are regulated by an agreement, which in turn is fixed in the Land Department, while the owner of the Leasehold remains in a vulnerable and dependent position.
