Leasehold

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The Leasehold system is defined as a system of property tenure where a person, by paying a fixed sum, acquires the right to occupy a particular land or building for a given period of time. Since Thai law prohibits foreigners from owning land within the country, leasehold has become a very popular alternative to direct ownership. Furthermore, Thai law limits the period of any lease agreement to thirty years only and any excess period will be reduced. The following features of leasehold have made it one of the most popular forms of property tenure: first, leasehold is a relatively stable arrangement as lease periods usually last for years sometimes even decades and second, both then lessor and the lessee share responsibility for the damages incurred on the property unless the law designates a specific party liable. Nonetheless, leasehold is still limited compared to that of absolute ownership. Mere possession is conferred in favor of the tenant. Moreover, since a leasehold period usually lasts for a long period to time, the tenant may incur risks and costs not initially contemplated in the lease agreement. Also, unlike the owner in freehold, the tenant is not tied to the land and holds no other interest apart from his previous occupation.