Leasehold and re-sale of a lease agreement
Lease of Immovable property
THE RIGHT TO SUB-LEASE AND ASSIGNMENT OF A PROPERTY LEASE
Lease in the Civil and Commercial Code is placed under the rubric contracts and as a hire of property primarily a personal contract right of the lessee (termination upon death of the lessee) with aspects of a real property right'Real property rights are rights over real estate enforceable against all other persons (e.g. right of the lessee to sublet if agreed), as opposed to contract promises (e.g. lease renewal option) which are enforceable against a particular person or persons - under Thai hire of property laws the dividing line between real property (lease) rights and personal contract promises in a lease agreement is not always easy to draw'. This is the reason why under Thai law the right to sub-rent or assignment of a residential lease agreement is only allowed if the lease agreement contains the right of the lessee to transfer his lease rights or transfer possession of the leased property to a third person (section 544 Section 544 (Civil and Commercial Code): 'Unless otherwise provided by the lease contract, a lessee/ tenant cannot sublet or transfer his rights in the whole or part of the property hired to a third person. If the lessee fails to comply with this provision, the letter may terminate the contract.' In Thai: มาตรา 544 ทรัพย์สินซึ่งเช่านั้น ผู้เช่าจะให้เช่าช่วงหรือโอนสิทธิ ของตนอันมีในทรัพย์สินนั้นไม่ว่าทั้งหมดหรือแต่บางส่วนให้แก่บุคคล ภายนอก ท่านว่าหาอาจทำได้ไม่ เว้นแต่จะได้ตกลงกันไว้เป็นอย่างอื่น ในสัญญาเช่า ถ้าผู้เช่าประพฤติฝ่าฝืนบทบัญญัติอันนี้ ผู้ให้เช่าจะบอกเลิกสัญญา เสียก็ได้). The right of the lessee to sublet or assignment of his lease must be included in the lease agreement or the lessee is under Thai laws not allowed to sublet or assign the lease to another person.
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Transfer of lease rights: |
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Transfer (sell) a lease agreement
Assignment or transfer of a lease agreement in Thailand is a three party agreement. The owner must agree to assignment of the lease agreement and assist with registration of the new lessee at the local land office. Sub-lease in Thailand, as opposed to assignment, is generally not subject to permission of the owner/ lessor. If a leasehold agreement in Thailand is made by a foreigner with the purpose selling the lease and making a profit this must be included in the lease agreement and is subject to cooperation of the owner of the property. The lessee does not own the property nor has he the title to the property and leasehold in Thailand (with a term not exceeding 30 years and no real registered right of renewal) is a diminishing asset.
Sub-rent example
Should the lessee lease raw undeveloped land and would not have agreed with the owner the right to sub-lease the land he is not allowed to sub-rent the land (section 544 Civil and Commercial Code'Section 544 Unless otherwise provided by the lease contract, a lessee/ tenant cannot sublet or transfer his rights in the whole or part of the property hired to a third person'.), but if the lessee then builds a house on the leased land and rents out the house, this will not be seen a sub-lease or breach of the lease contract (Scj. 2237/1981). Should however the lease contract state that the lessee is not allowed to let someone else use the land, then in the same situation, it will be seen as breach of the lease contract (Scj. 6843/ 1998).
Assignment of a lease upon death of the lessee
As a property lease (tenancy) is under Thai hire of property laws by nature a personal right of the lessee, lease is as such not an inheritable contract right. Under hire of property and Thai contract laws a lease agreement is terminated upon death of the lessee because the lessee is the essence of the lease agreement (supreme court of Thailand). Death of the lessee terminates rent. Assigment of the lease to the heirs upon death of the lessee must be included as a specific clause in the lease agreement, read more...
- lease in Thailand (articles)
- oveview Thai property law
