What is the length of a leasehold (land lease) in Thailand and what is the effect on the value when sold during the leaswe term when the lease has an option to transfer to freehold title and to renew?
I read on a law firm's website the following:
'The longest a single lease can be registered in Thailand is 30 years, but you can pre-register 3 consecutive 30 year leases at once, which essentially provides a 90 year lease. Normally there is a provision written into the leasehold agreement that allows you to register another 30 year lease once the previous lease has expired. In effect, this provides a lease in perpetuity'.
If a perpetual lease is possible, i.e. renewable for ever at the lessee's option, it is it is a good alternative for freehold land ownership in Thailand for foreigners? I mean foreigners not being able to register land ownership but are able to register a leasehold?
Thailand Civil and Commercial Code - current 2018 written laws in section 540: 'The duration of a lease of immovable property cannot exceed thirty years. If it is made for a longer period, such period shall be reduced to thirty years. The aforesaid period may be renewed, but it must not exceed thirty years from the time of renewal.
In property developments or land property leases offered to foreigners you may see lease agreements suggesting longer terms exceeding 30-years through renewal options however such options are not protected by law and considered personal contract promises between the contract parties to the lease contract agreement to give or do something in 30 years time. This is not a lease right or lease renewal option protected as a 'lease right' by section 569 of the civil and commercial code (it is not binding upon any third parties). Therefore not guaranteed and as mere personal promise legally very weak or if not enforceable by legal action at all!
When the parties have executed 2 consecutive 30-year lease agreements (whether registered with the land office or not) it shall automatically by current Thai law (section 540 civil and commercial code) and supreme court rulings be deemed as one lease and reduced to 30 years!