Freehold vs Leasehold

In Thailand, along with purchasing a condominium in full ownership (freehold), long-term lease agreements (leasehold) are also widely used. Both methods are actively applied in real estate transactions, but they are governed by different laws and have different legal implications.

What is Freehold?

Freehold is the purchase of a condominium in full ownership. A sale and purchase agreement is executed, and a title deed (chanote) is issued in the buyer’s name.

What is Leasehold?

Leasehold is a long-term lease agreement, typically for up to 30 years. The lease right is registered with the Land Department, but the property does not become the tenant’s ownership.

I have previously written in detail about the 2023 Supreme Court decision that effectively “cancelled” the automatic extension of leasehold agreements up to 90 years.

How are Freehold and Leasehold regulated?

Freehold is governed by the Condominium Act and a standard form of sale and purchase agreement approved by the Ministry of Interior.

Leasehold is governed by the Civil and Commercial Code of Thailand, specifically the section on hire of property. The Ministry of Interior regulations apply only partially, which is why leasehold agreements require more thorough legal review.

Important aspects when entering into a leasehold agreement

When purchasing property under a leasehold agreement, the buyer should pay attention to the following:

The right to assign the lease and the possibility of its extension
The possibility of transferring lease rights by inheritance
The ability to sublease without the landlord’s consent
Conditions for lease renewal and payment terms for the new period
The tenant’s participation in condominium management on equal terms with owners
Who is responsible for paying property tax — the tenant or the owner (e.g., developer)

When purchasing resale property, it is important to verify who exactly acts as the landlord: the developer or, for example, their representative.