THAILAND Law and Practice Contributed by: Olaf Duensing, Jerrold Kippen and Weeraya Kippen, Duensing Kippen, Ltd.
family may occupy the building with the grantee. • Superficies – this is a fully transferable right to own freehold title to a building on another person’s land. Superficies may either be granted for up to 30 years or for the life of the grantee. Superficies may also be renewed for another 30 years. Unless prohibited by the act creating it, a superficies is fully transfer - able by the grantee. • Sap-ing-sith – this is a new right over real estate by registration at the land office and issuance of a certificate that is similar to a lease. It is applicable only to land ownership (ie, chanote ) titles, buildings on such titles, and condominium units. The duration cannot exceed 30 years. It allows the holder to use the real estate as outlined in its certificate. It is inheritable and transferable without the consent of the owner. Furthermore, it allows the holder to make additions and alterations to the real estate without the owner’s con - sent. The certificate holder can also mortgage their right. 6.2 Types of Commercial Leases All leases are governed by the CCC as a specific contract. Apart from standard lease provisions, the Hire of Immovable Property for Commerce and Indus - try Act introduces a specific form of commercial lease. The Act defines commercial purposes with regard to leasing commercial property. A lease that qualifies under the Act as “commer - cial” must be: • for a commercial or industrial purpose, as defined by the Act; • for a property located in an area designated by the Act; and • registered.
The commercial lease under such Act may have a term of up to 50 years. The maximum term for any other lease, whether residential or not quali - fying under the conditions of the Act, is mere - ly 30 years. In addition, a lease under the Act may also be mortgaged as security for a loan. A commercial lease under the Act is automati - cally inheritable by the tenant’s heir. Finally, a commercial lease may be sublet or transferred without the lessor’s prior consent. 6.3 Regulation of Rents or Lease Terms Registration requirements exist in relation to the lease term. Any lease term exceeding three years must be registered with the land department in order to be enforceable for the term exceeding three years. Furthermore, any lease term cannot exceed 30 years (see 6.2 Types of Commercial Leases for exceptions). Other terms are only freely negotiable if the lease is not considered “residential property leasing business” , which means a business that leases five or more property units to individual lessees for residential proposes. A residential property leasing business is a controlled business and certain contract terms are required by law. Any violation is subject to a fine and/or imprisonment Typically, short-term leases do not exceed a three-year term, in order to avoid the registra - tion requirement. Land leases are usually for a longer term. Tenants have specific liabilities to the owner of a property and any relevant provisions of their rental contract. (see 6.14 Specific Regulations ). 6.4 Typical Terms of a Lease
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