Thailand lease agreement sub-lease and assignment
Thailand lease agreement: sub-lease, assignment and succession by inheritance
One of the basic principles of lease in Thailand is the fact that the leaseholder can only sub-lease or sell (assign) the leasehold interest to another person if this is agreed in the lease agreement, and for assignment, if the landlord agrees and co-operates with the registration of the new lessee. Also succession of the lease interest in the land or property to the heirs or the beneficiaries of the lessee must be properly included in the lease agreement or the lease will be terminated upon the death of the lessee(s).
Section 544 Civil and Commercial Code:'Unless otherwise provided by the contract of hire, a hirer cannot sublet or transfer his rights in the whole or part of the property hired to a third person'.
Sample clause for sublease and assignment in the sample lease agreement
Clause 8 of the sample agreement
- The Lessee may sub-let the land during the term and agrees that the sub-lessee shall be bound by all the terms and conditions contained herein.
- The parties agree that in the case where the lessee sells the rights to the land and/or assigns/transfers all rights and obligations under this agreement to any third person (the transferee), the Lessee shall arrange for the Transferee to enter, sign and execute all documents, applications, deeds or agreements which may be required by law and the Lessor.
Inheritance and lease rights
Thai law and Supreme Court judgments. It is important to realize that a 30-year lease or rent of land, house or condo in Thailand is a personal right of the lessee (tenant) and not a fixed term asset or inheritable right, even though paid in advance. The basic principle of hire of property law in Thailand is that any lease agreement is terminated upon death of the leaseholder, but not upon death of the owner of the property.
Under Thai law, and confirmed by the Thailand Supreme Court, the lessee is the essence of the agreement, therefore if the lessee dies the contract is terminated! In any case, if nothing is arranged in the lease agreement there is no legal obligation for the owner of the property to transfer the remaining term of the lease to the lessee's heirs or beneficiaries, and in principle he can regain possession of the property.
Sample clause for succession in the sample lease agreement
Clause 16 in the sample lease agreement: The parties hereto agree that in the event of the death of the lessee prior to the expiration of the lease term the Lessor irrevocably agrees to let the person designated by the lessee or any person appointed by order of the administrator of the lessees estate to lease and use the Land and the lessor agrees to enter into a new lease agreement with that person for the same term and conditions specified in this agreement without any further payment.The difference between sub-let or sub-lease and assignment of the lease agreement
A sublease agreement in Thailand is the rental agreement in which the lessee in a lease rents all or part of his leased property to another person. In the new rental contract the lessee becomes the sub-lessor and the new tenant the sub-lessee or sub-tenant. In Thailand an assignment of a lease is when the remaining term of a lease agreement in transferred to a new lessee. In this case the complete lease is assigned and the new lessee becomes liable to the lessor, the Thai owner of the property.
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