Property laws in Thailand can be confusing to newcomers to the market. There is speculation that foreign buyers can’t own property here and other untrue statements often being circulated. There is a widely held belief that it is difficult to purchase or rent property within the country – this problem is apparently compounded for foreigners and expats. Although these beliefs have some basis in truth in terms of land ownership, in recent years, the Thai government has taken various steps to improve property laws and make it easier for both Thai citizens and foreigners to purchase and rent property. The government has made positive steps to encourage foreign investment and development in key areas, including real estate.
One area of the property process that remains difficult to fathom is leasing. Thai leasing laws have their fair share of horror stories attached to them. There are numerous laws and different stipulations/conditions that make leasing a potential minefield. Furthermore, the laws are sometimes seen as being biased towards the leaser. To try and ease these problems and improve the leasing process, the cabinet has just approved a new bill – this bill aims to grant additional rights to leaseholders that own condos or land titles.
What can leaseholders expect from the bill?
To summarise, the bill should expand upon current property laws in place, and provide additional rights covering a range of leasing issues. We have broken the bill down into two easy to digest sections – ability to manage property and heirs:
Leaseholders and what they can do with their property/land
Currently, leaseholders are extremely limited in what they can actually do to a property or piece of land without the owner’s permission. If the bill was passed, this would change dramatically and leaseholders would be able to modify and use their leased property/land in a variety of new ways:
– Construct or modify new structures on the property without consent of the owner
– Sublease the rented property or land without consent of the owner
– Sell the lease term without consent of the owner
Furthermore, aside from the above, under the new bill, a leaseholder would have the right to be a tenant for an increased maximum of 30 years. As you can see, this would provide leaseholders with unparalleled control and freedom and open up a whole new avenue of possibilities.
Leaseholders and their heirs
Traditionally, if a leaseholder passed away, their property would not automatically pass to their heir. This often causes unnecessary stress and strain at a time when exactly the opposite is required. To address this problem, the new bill allows automatic inheritance of leased property or land to an heir. If passed, this should help alleviate a great deal of confusion and trouble for all parties involved. Furthermore, leaseholders would be able to rent, sell, mortgage or transfer their lease to their heir for the duration of the rental period.
There is some opposition to this proposed bill – many say that these changes dramatically reduce the control an owner has over their leased property. Whilst this appears to be true, the counter-argument is that this bill would also allow owners to lease their property/land at a premium rate due to the increased rights the leaseholder would have. If this bill is passed, one thing is for sure, it could make owning a leasehold property more attractive for foreign buyers, especially the older generation.
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