Lease and inheritance

THAI HIRE OF PROPERTY LAWS DO NOT GIVE THE HEIRS OF THE LESSEE THE RIGHT TO TAKEOVER A LEASE BY SUCCESSION

A lease agreement (hire, rental) is under Thai law as a hire of property a personal right of the lessee. In the event of death of the lessee during the lease term the lease contract is terminated according to Thai contract laws and Supreme Court judgments. As opposed to for example a right of superficies (the right to use the land owned by another for the purpose of owning buildings and plantations), 'lease' in Thailand is actually a contract right and not a fixed asset or by law inheritable right. The right of possession of the property will not automatically transfer to the heirs of the lessee upon his death.

Supreme Court Judgment 1108/ 1994; 'The lessee is the essence of the lease agreement. Therefore, should the lessee die, the lease contract will be terminated and the lease rights WILL NOT transfer to the heirs of the lessee'.

Inheritance of the lease agreement

Long term lease agreements generally include a clause that in the event of death of the lessee the lessee’s heirs shall be allowed to continue to lease and that the remaining lease term will be transferred to the lessee’s heirs. If a valid succession clause is included in the Thailand lease agreement such a clause is enforceable by the heirs of the lessee against the original lessor but requires cooperation of the lessor, assignment and registration at the land office where the property is located.

The lease is not terminated upon death of the lessee if additional protection is created based on Supreme Court judgments regarding special reciprocity contracts, which basically is created if the lessee made an agreed substantial investment in the improvement of the property that will upon expiration benefit the owner of the property, e.g. if the improvements (house) on the land will revert to the owner of the land upon expiration of the lease read more...

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