Purchasing | Leasing land and/or a house for residence
First of all, the land document, the so-called 'Janot', should be checked at the District Council. This can be done with a copy of the original, so that the most current status of the property can be determined with the help of the registration data. In some cases, it is advisable to let the District Council carry out a survey in order to check whether or not the section borders are still in the same position as shown in the land document and whether the square meterage is still the same as stated in the 'Janot'. A lease agreement between the parties can then be drawn up and after both parties have signed it, this agreement can be brought for registration to the District Council, together with the land document and documents of personal identification. At the District Council, the documents can be stamped and signed, after which the land cannot be sold or handed over, without the lease being terminated or the consent of the leaser.
We strongly advise you to ask for assistance in this procedure of a reputable real estate agent or a good lawyer, who is in a position to have the lease agreement together with the land documents legalised. The fact that all of these documents are in Thai is one reason to seek assistance. Your own name is registered on the lease registration form and the land document in phonetic Thai. The maximum period for the lease of land and/or a house is 30 years.
When the first lease has been completed, your partner or the juridical owner can sign another lease agreement. This is dated with the same date on which the first lease period ends and is valid for a further 30 years. The reason is that if your partner dies, the other cannot be forced to leave the home. The only procedure that then must be carried out after the first lease period finished is to let the signed documents be registered again at the District Council by a registered real estate agent or lawyer. By doing this, you have in fact a lifelong lease period of a total of 60 years. A lawyer can also include heirs in the lease. If you have a Thai partner, the lawyer can arrange for land (including the house) be registered on the name of the children, or in the case of death make sure that the ownership goes to the children (by means of a will). You can also nominate a specific person in your will to take over the lease. This will should also be registered at the District Council and be stamped. A lease can also be sold by you to somebody else. It is advisable to let the required documents already be signed at the time of beginning the lease by your partner or the juridical owner. This allows you to begin the selling process without having to involve others.
What else do you need to be aware of when leasing?
What else do you need to be aware of when leasing? The transactions of land and other real-estate are regulated by laws. The observance of laws is only possible if consequences are taken when laws are breached. Thailand is a country where the law is applied 'selectively'. As a foreigner you can purchase houses and other buildings; you can lease land or purchase your own Thai business. Yet, always make use of the service of a recognised real-estate agent or a good lawyer when making transactions. Documents often contain faults; sometimes they are even false; it also can occur that you buy a house and receive the land documents of a completely different property, or even for another appropriate section.
If everything is in order, including the documents, location, area measurements, etc. then also verify the following:
- Are there telephone, water and electricity connections? If not, can they be built in? In case this is possible, detail it in the writing and record the breach in case your rights are neglected.
- Be certain that the property where you wish to live is not situated in a flooding zone.
- If a lease contract is not registered at the District Council, it is only valid for a period of three years, disregarding the period that the agreement states. By the way, you are obliged to register a lease agreement that is made for longer than three years. In the case of a death of one of the contract parties, such a lease contract is immediately terminated, as it cannot be handed over.
- If you do register the lease agreement at the District Council, you must pay legal fees and tax, which are calculated for the total leasing sum. This is mostly the same as the purchase sum. Normally the amount of the transfer and the registration of the lease cost 3.3%, although at present this amount is lower. All documents are issued solely in the Thai language. A lease that is registered at the District Council can be handed over and if one of the parties dies, the lease contract is not finished, but taken over by the heir(s).
- Besides the official payments, such as legal charges and taxes, a fee that has been agreed upon earlier must be paid to the real-estate agent or lawyer. The payment of the costs of registration and the transfer also need to be agreed upon by the different parties.
- You will need to pay a visit to the District Council for each additional transaction, in order to let the alterations be registered.