Real lease rights and contractual obligations in lease agreements in Thailand

THAILAND LEASE AGREEMENT

A lease agreement in Thailand can contain clauses based on general freedom of contract between the parties and clauses based on specific hire of property laws. The importance of the distinction between the two lies in the future enforceability of contract obligations and true hire of property right (real lease rights). Real lease options and obligations are enforceable against all other persons and by law binding upon successors of the leased property (real lease rights follow the property along with the ownership), and once given the owner (lessor) can't take the option in the lease back and he cannot change his mind, in contrast to contract promises in the lease agreement and possible difficulties in future enforceability. Under Thai law and Supreme Court rulings the agreed term in the lease is considered a real right of the lessee, but an option to renew the lease is considered a contract option or contract obligation (not a real lease right) that needs to be enforced in the future.