Thai Property Law – Binding Obligation for a Second 30-Year Lease Term

Question

Subject: Thai Property Law – Binding Obligation for a Second 30-Year Lease Term

Dear Sir/Madam,

I am researching the possibility of purchasing a house in Thailand as a foreign national.

My intention is to purchase and legally own the building itself through a registered Right of Superficies (สิทธิเหนือพื้นดิน), while leasing the underlying land from the Thai landowner for an initial period of 30 years.

However, I would like to establish additional legal security regarding the lease renewal.

My question is:

Under Thai law, specifically Section 540 of the Thai Civil and Commercial Code, is it legally possible to include a binding contractual obligation in the original agreement requiring the landowner to enter into a new 30-year lease agreement immediately upon expiration of the initial 30-year term?

I am specifically looking for a legally binding obligation imposed on the landowner, rather than a simple renewal option granted to the lessee.

Additionally:

1. Can such an obligation be legally enforced under Thai law?
2. Can the obligation be structured so that it also applies if the original landowner sells or transfers the land?
3. Can the right to obtain the subsequent lease be transferred to a third-party buyer if I decide to sell my house after 20–25 years?
4. Is there any alternative legal structure that would provide similar protection?

My main objective is to ensure that the house retains its resale value throughout the initial lease period, with maximum legal certainty for a subsequent buyer.

I would appreciate an initial legal opinion on whether this structure is possible under Thai law.

Kind regards

Riche

บริษัท บี ลอว์เฟิร์ม จำกัด · Answer

Dear Riche,

Below is our initial opinion, based on the facts you described and the law in force today. It is a preliminary view only. We would need to review the title deed and the draft agreements before giving a final opinion.

If you have any questions on any point, or would like us to act as your legal advisor or assist with the transaction, please feel free to inbox us.

SHORT ANSWER
=================
Yes. In the original agreement, the landowner can validly undertake to grant you a new lease when the first 30-year term ends. Thai law treats this as a "promise to lease", and Thai courts have enforced such promises against the landowner who gave them. However, three limits are important for your plan:

(a) It is a personal, contractual right. It cannot be registered on the title deed as a real right, and it does not automatically bind a later owner of the land.

(b) The renewal cannot be automatic or paid in advance. Section 540 limits any lease to 30 years and allows a renewal of no more than 30 years "from the time of renewal". The Supreme Court has recently struck down a 30-year lease with two pre-agreed 30-year extensions paid up front, treating it as a disguised 90-year lease. The second term must therefore be a genuine new lease, concluded and registered when the first term ends, with rent for that term paid at that time.

(c) If the landowner refuses, you can only enforce the obligation through the courts, which takes time.

In short, this structure improves your position, but it cannot guarantee a second 30-year term with the same certainty as ownership.

Thai Property Law – Binding Obligation for a Second 30-Year Lease Term

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