Leasehold in Thailand: inheritance, resale and the fate of the villa — five clauses of the lease

Thai law allows land to be leased for 30 years; two further 30-year terms are an option for the landowner, not an obligation. A court does not recognise a 90-year agreement. Whether the lease passes to heirs, whether it can be sold and what becomes of the villa is decided by five clauses of the agreement.

Why does a 90-year lease not exist?

Because a contract cannot contradict the law, and the law states a term of 30 years. Extending for another 30 and then another 30 years is possible only if the landowner agrees.

A court example was given at our closed session for brokers: a buyer paid for a 90-year lease, after 30 years the landowner refused to extend, went to court and won. The court brought the term into line with the law.

A promise of “guaranteed renewal”, according to a practitioner with 12 years in the country, is deceiving the buyer. We covered the general mechanics in our piece on 30-year leasehold.

How does renewal work?

A lease cannot be renewed early, say 5 years after purchase. Negotiations take place when the term is drawing to a close — just as an ordinary tenancy is renewed.

The terms of the new agreement are negotiated afresh: the amount, the term, the condition of the buildings. The new term may be shorter — 5 years, for example. The landowner or their heirs are entitled to refuse.

Which five clauses must the agreement contain?

• Resale. Without this clause the landowner can forbid the sale of the leasehold right.
• Inheritance. The heir's name is stated in the agreement, and a will is drawn up separately.
• Death of the lessee. What happens to the agreement and who becomes the party to it.
• Death of the landowner. Whether their heirs are bound by the agreement.
• Fate of the building. Whether the villa stays with the landowner and whether compensation is due.

The agreement can be made out to several lessees at once. Then if one dies, the others keep all their rights.

Does a lease pass to heirs?

Yes, if the agreement says so. The heir does not get a new term but the remainder of the old one: with 12 of 30 years gone, they receive 18.

The common belief that everything reverts to the landowner on the lessee's death is wrong. But without a clause in the agreement and a will, the right will have to be proved in court.

What happens to the villa when the term ends?

It depends on the agreement. The building may pass to the landowner with or without compensation. There can also be a condition to return a clear plot — then the villa is demolished at the lessee's expense.

The building itself may be held in ownership while the land is leased. A lease is registered at the land department if its term exceeds 3 years.

Why is leasehold sold more cheaply?

A lease usually costs noticeably less than freehold, and sellers present that as a saving. In reality it is a different asset: its price falls along with the remaining term.

Frequently asked questions

For how long can land be leased in Thailand?

For 30 years. The law allows two 30-year renewals, but only with the landowner's consent and on new terms.

Can a villa on leased land be sold?

It can, if the right to resell is written into the agreement. The buyer gets the remaining term of the lease.

Will an heir receive the leasehold right?

Yes, on two conditions: the heir is named in the agreement and there is a will. They inherit the term remaining until the lease ends.