The 30+30+30 leasing contacts in Phuket is over

[crazykopite]

32 minutes ago, TexasCowboy said:

Why would they be grandfathered?  They were never legal to begin with.  All these geniuses in Thailand and other countries always think they have a way to get around the law, when the law was pretty clear.  Wait until they start really cracking down on units in "company" name with fake Thai nominee shareholders.  Plenty of people will lose their homes.  Happened in Mexico and Spain and probably other places too.  Crackdowns won't be nice.

There are 1,000s upon 1,000s of properties owned via company it would take years to close it all down and look at the revenue that would be lost each year just in audited accounts the simple solution build two properties on your bit of company dirt rent one out and live in the other 

[kingstonkid]

On 4/6/2025 at 10:10 PM, NativeBob said:

How cute!
So let me get this straight - Mr.A. bought some property in Phuket being promised 90 years of lease by real estate company's manager/owner. 

Later he found that deal was "fake" a.k.a. "not completely correct"

So Mr.A. feels kinda "fooled" and "upset" and later he decides to cancel the deal. 

Real estate agency got 2-3%, owner 95%, the rest went into expenses.

Now, Mr.A. requests to annul the deal and his money back, but most of the money gone.

What options left to him?

1. Bring crooked agency to the court? Useless

2. Threaten the owner? Hm. Tough job

3. Bite the bullet and admit his fault?

4. Cry to every forum and newsgroups on Reddit about TH?

5. Find some farang ding-dong and sell the property to him? <<<< best choice, imno. 

 

Any other options?

Find a Thai to buy it who might be able to work out a deal with the owner.

 

enjoy the house for 25 yers and sell it or demolish it if he septn themoney to buy the house

 

 

[LukKrueng]

Any lease longer than 30 years was NEVER legal as Thai law only allows a lease of up to 30 years. Writing a contract with an illegal close was never legal. Many cases were contested in courts over the years and were always ruled illegal. 

[JJ-Thailand]

They can agree on a new 30-year lease with the landlord.

That's how it is supposed to work, re-negotiate when the leasing period expires.

 

[norsurin]

2 hours ago, newbee2022 said:

It's not the agents but yourself who didn't delve into Thai Laws. And nobody forced you to sign any contract. Bad luck😕

U suppose to trust the agent and the lawyer.Anyway TIT 

[newbee2022]

2 minutes ago, norsurin said:

U suppose to trust the agent and the lawyer.Anyway TIT 

Never.

The lease contract has to be acknowledged by the Land Office. If not = invalid

[xylophone]

34 minutes ago, LukKrueng said:

Any lease longer than 30 years was NEVER legal as Thai law only allows a lease of up to 30 years. Writing a contract with an illegal close was never legal. Many cases were contested in courts over the years and were always ruled illegal. 

Agree and way back in the early days of Thai Visa I also posted about this ruse, stating that it was not legal and to back this up, a contract signed using this "pretense" could be ruled as null and void if it came down to the wire.

 

On the subject of using a Thai nominee to buy/build a house, a friend of mine had bought a villa using this route and when his lawyer sold it in the absence of my friend, he took it to court, expecting a favourable outcome, however the ruling was that the original contract/agreement was illegal anyway, so he had no comeback whatsoever and lost everything.

 

A hard and expensive lesson to learn.

[Mises]

Phuket property market:

 

Look out beeeeelowwwww

 

Except that it never happens no matter how many truths such as this are published.  There are too many new mugs arriving every week who believe the 10-15% returns on investment.  And unlike elsewhere in the world Thailand does not care where the money comes from, no proof of origin required.  Excellent for money laundering.

 

There are thousnds of new villas under construction on the west coast costing 10 million baht to build and asking 40 million baht.  According to agents they are selling, people are living in them. 

 

The bubble may take a while to burst. 

 

 

 

 

[Nid_Noi]

1 hour ago, JJ-Thailand said:

They can agree on a new 30-year lease with the landlord.

That's how it is supposed to work, re-negotiate when the leasing period expires.

 

Just have a separate contract which obliges the landlord to give you preference when it’s time to renegotiate the lease. The terms can be part of the contract for price (based on local land value at time of renegotiation). 

Also include a clause to have preference to offer to buy in case Thailand authorizes foreigners to own land before the end of the lease.

We have a clause which deducts the residual value of the lease from the purchase price in case such an option arises.

In our area everything is for sale. 80% of farming land surfaces are not cultivated and have a sale sign on it. Thais are land poor and land value depends on what wealthy Thais are willing to offer (price is usually at the bottom of the scale, dictated by what the land office considers “normal”).

 

[khunPer]

Nothing new, "30+30+30 year leasing" has never been legal...

[JJ-Thailand]

I think people worry too much.
I have a 30-year lease, 18 years left.
Do I worry? No, I'll most likely be dead by then. If not, I'll sort it out then.

[sometimewoodworker]

On 4/11/2025 at 12:52 PM, Nid_Noi said:

Just have a separate contract which obliges the landlord to give you preference when it’s time to renegotiate the lease. The terms can be part of the contract for price (based on local land value at time of renegotiation). 

Also include a clause to have preference to offer to buy in case Thailand authorizes foreigners to own land before the end of the lease.

We have a clause which deducts the residual value of the lease from the purchase price in case such an option arises.

In our area everything is for sale. 80% of farming land surfaces are not cultivated and have a sale sign on it. Thais are land poor and land value depends on what wealthy Thais are willing to offer (price is usually at the bottom of the scale, dictated by what the land office considers “normal”).

 

You can have as many clauses in your contract as you wish.

The overwhelming problem is that if the contract is challenged the courts are likely to rule that the majority, if not all, of them are worthless and unenforceable so not worth the paper it’s printed on.

 

You can get a lawyer to draw up any contract you want, with the right brown envelope/s you may get a land office to register the contract. But once challenged in a court that is not accepting brown envelope’s (most don’t) it will all be thrown out.

 

It may well be years before the contracts are challenged but there is no time limit on the challenge.

[NativeBob]

Meanwhile something really nasty:

The landlord can put the land you've built your villa/bungalow as a collateral to the bank. Bad things happened later

[sometimewoodworker]

9 minutes ago, NativeBob said:

Meanwhile something really nasty:

The landlord can put the land you've built your villa/bungalow as a collateral to the bank. Bad things happened later

Even worse things can happen if the landlord gets money from the loan sharks and defaults on repayments. The loan shark enforcers are much worse than the banks.

[NativeBob]

2 minutes ago, sometimewoodworker said:

Even worse things can happen if the landlord gets money from the loan sharks and defaults on repayments. The loan shark enforcers are much worse than the banks.

Yes, that too. My point is not even 30 years might be calm and happy years. The contract turns void once the ownership changed. #ROFL

[sometimewoodworker]

1 hour ago, NativeBob said:

The contract turns void once the ownership changed. #ROFL

Legally the contract should survive a change of ownership, however what will actually happen is often different to what the law technically allows. 
There are contracts that will survive a change of ownership more easily than a lease, but in Thailand some contracts are treated more like recommendations than established law.

[NativeBob]

52 minutes ago, sometimewoodworker said:

but in Thailand some contracts are treated more like recommendations than established law.

Perfect conclusion. Yes indeed

[Mrs Sisaket]

It was not the high court in Phuket, but the Supreme Court of Thailand. Decision 4655/2566

 

https://thailawonline.com/automatic-renewal-of-a-lease-in-thailand/

 

Decision in Thai here : https://www.facebook.com/groups/345686783051389/posts/1511617373124985/

 

 

 

[ukrules]

On 4/11/2025 at 10:33 AM, LukKrueng said:

Any lease longer than 30 years was NEVER legal as Thai law only allows a lease of up to 30 years. Writing a contract with an illegal close was never legal. Many cases were contested in courts over the years and were always ruled illegal. 

 

Indeed, these contracts should technically all be null and void shouldn't they? As in the entire lease cancelled.

 

Look at it as a 30 year pre-paid rental, anything extra is a bonus.

[DaRoadrunner]

On 4/11/2025 at 11:15 AM, xylophone said:

On the subject of using a Thai nominee to buy/build a house, a friend of mine had bought a villa using this route and when his lawyer sold it in the absence of my friend, he took it to court, expecting a favourable outcome, however the ruling was that the original contract/agreement was illegal anyway, so he had no comeback whatsoever and lost everything.

Was the lawyer also a nominee? Cannot trust anything or anyone in Thailand.

[Mrs Sisaket]

24 minutes ago, ukrules said:

 

Indeed, these contracts should technically all be null and void shouldn't they? As in the entire lease cancelled.

 

 

I do not understand it the same as you. First, not the entire lease is cancelled. Just the renewal and some damages were paid.

 

For each case, you must look at every contract and "automatic renewals" would be void. The trick is to make a lease and separate an addendum with renewals. Good projects could make a new addendum to modify the first ones. 

 

Under Thai law, for a lease renewal to be enforceable, the original lease agreement must include a clear and binding promise from the lessor to renew the lease under specified terms. This principle was affirmed in Supreme Court Decision No. 4655/2566, which invalidated automatic 30-year lease renewals that lacked such specificity .

 

The courts have consistently held that if a lease agreement merely allows the lessee to propose a renewal or states that the lessor will consider renewal, without obligating the lessor to accept, it does not constitute a binding promise. For instance, in Supreme Court Decision No. 13286/2556, the court ruled that a clause allowing the lessee to propose a renewal did not compel the lessor to agree to it. Similarly, in Decision No. 3263/2535, the court found that a provision stating the lessor would consider renewal did not amount to a binding commitment.

Furthermore, if essential terms of the renewal, such as rent or duration, are left to future negotiation, the promise to lease is not considered binding. In Decision No. 8692/2549, the court held that a clause allowing for rent adjustments based on future economic conditions lacked the definiteness required for enforceability.

Therefore, for a lease renewal to be enforceable under Thai law, the original lease must contain a clear and definite promise to renew, with all essential terms specified. Absent such clarity, the lessee cannot compel the lessor to agree to a renewal.

 

Yes, I know. Not many people can cite these decisions...

[ukrules]

1 hour ago, Mrs Sisaket said:

I do not understand it the same as you. First, not the entire lease is cancelled

 

Just speculation on my part but if I ever produced a contract that had illegal terms in it then I would kind of expect the entire contract to be null and void, perhaps the Thai courts are only voiding the second and subsequent renewals - for now.

I do wonder if someone attempted to have an entire lease nullified based on the known bad auto renewals.

You see - if the intent of the lease was only to circumvent the foreign control of land rules and 30 year maximum then the court could take a dim view of that.

I wouldn't want to be in the position of owning a lease that expires in the next few years, this will not end well - many people bought leaseholds back in the 90s - it's going to be a wild ride.
 

[Mrs Sisaket]

2 hours ago, ukrules said:

 

Just speculation on my part but if I ever produced a contract that had illegal terms in it then I would kind of expect the entire contract to be null and void, perhaps the Thai courts are only voiding the second and subsequent renewals - for now.

 

Not necessarily. That is why lawyers often put « severability clauses » for. I always have them in my general clauses. But this is highly hypothetical because these cases rarely go to highest levels. 

[Mrs Sisaket]

2 hours ago, ukrules said:

You see - if the intent of the lease was only to circumvent the foreign control of land rules and 30 year maximum then the court could take a dim view of that.
 

 

Yes, exactly. In this case, the court ruled that the so-called “automatic renewal” was actually an attempt to bypass the legal limit set by Thai law. That kind of clause is not valid, because it’s seen as a way to circumvent the law—specifically Section 540 of the Civil and Commercial Code, which limits leases to 30 years.

 

This is something most civil law lawyers learn early on: certain rules fall under what we call public order. These are principles so important—like age limits, morality, or legality—that they can’t be waived or changed by private agreement. In other words, you can’t contract your way around them.

 

For example, two children who are both 8 years old can’t legally marry, even if their parents sign a contract. It’s against public order. Or if someone makes a contract about the quality of cocaine, that contract can’t be enforced in court. Cocaine is illegal—so the subject matter itself makes the contract void.

 

Now, if you read this Supreme Court decision carefully, you’ll see they didn’t void the original lease. That part was valid. What they voided was the automatic renewal. Even the damages were not void. The renewal clause was void because it tried to extend the lease beyond the 30-year limit by default, without needing a new agreement. That’s why it was declared void. Section 540 does allow a renewal, but it has to be done properly—not automatically, and not in a way that avoids the law’s intent.

 

To be honest, I said something similar 10 or 15 years ago. I wasn’t joking. I never said “automatic renewal” was valid. What I said was this: trying to guarantee a 90-year lease upfront was outside a straightforward reading of the law. Thirty years is allowed. Another 30 years may be possible. But 90 years? That’s pushing it. That’s just basic legal interpretation. And yes, contrary to most people here, I understood and knew what is a reciprocal contract and decisions of the Supreme Court on that. Who knows that? The validations of 3 x 5 years leases based on that? I knew that. I do not wish to explain too much, it is complex in law.