The Lease

Property ownership and Leasehold

To maintain control of land that is not yours, you need to get a leasehold arrangement. This is not some informal document (well, it can be but it’s worthless in the eyes of a Thai court if things go wrong) but a formal recognition of the leaseholder actually noted officially on the land documents. The lease is of 2 types, relevant to property.

You can form a lease of maximum 3 years very easily, but who would want to? 3 years – just enough to build ‘your’ house and then when it comes to the lease renewal after 36 months, you are at the mercy of the land owner. He might renew it, at the same rate for another 3 years, or he might put the lease up 10 fold. Or he might refuse to renew. All your hard work sat on someone else’s land. A very difficult and avoidable situation.

No… the lease you want is the one that lasts 30 years. This needs to be approved at the land office and assuming your lease is approved, you details are added onto to land ownership document, in our case – the Chanote.

The lease itself has to be ‘believable’ in order to be approved – what do I mean by that? Commercially reasonable. All the elements in place. This is to stop foreign buyers using a Thai ‘proxy’ to ‘buy’ the land with on the face of it no benefit to the nominal Thai owner. So a 30-year lease application where to owner gets 1000THB / year and there is no clear details for who the lease is being taken up by is likely to be rejected. In our case, my wife will get 1,800,000 THB rental over the life of the lease. My details were clear and supported by documents proving who I am. The wording of the lease, e.g. what to do if the house is to be sold later on, etc. has to be fair and reasonable. Even with what we thought was everything in place, the land office did not approve it until the second day, but approve it they did.

In no way related to the previous paragraph…

A word about ‘tea money’, back-handers, something to help the process, speed up the process…call it what you will. I am not saying anything like that happened to us but… this is one situation where it is ‘possible’ that such a suggestion might be made ‘if you want this lease to get approved’’. Is it right? Not really. Does it happen? Yup… at least…it can. Be aware of this in your budgeting!!

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