In 1999 a major change in law about building lease of fixed property for commercial and industrial use was introduced in Thailand. According to this new property act more rights for selling, transferring and sub-leasing are given to lessees. It has provided important bases for establishment of leases that can help in more freedom for trading without getting prior consent of lessor.
This law also has helped in using leases for collateral loans for commercial and industial leases and has been considered as an important effort for inviting foreign investment. Prior to this law the lease was automatically finished with the death of lessee, however it has provided a provision for inheriting lease. This has also worked as a big preventive for involvement of institutional financing in this sector.
As a result of this law value of lease has been increased as property right in Thai society. Another important benefit offered by this act include extension of lease term from maximum thirty years to fifty year and secondly possibility of automatic restoration of the contract after fifty years thus increasing lease years to hundred years in total.
Foreigners are permitted to possess property in Thailand under controlled conditions in small volume. However the new act termed as Amending Land code 1999, allows foreigners to buy and own a piece of land only for personal use, if he/she brings investment of minimum one million US dollars.
However even now the restrictions are strict, stating that the foreign owners cannot own a plot larger than seventeen thousand (17000) square feet and it cannot be in coastal area. Another new clause is included about increasing percentage for development of house or apartment upto 49%, however, money used to buy this house/apartment should be brought into the country through Thai bank from a overseas bank.
The foreign buyer has to present proof of this transfer by presenting a certificate termed Tor Tor 3 in front of land department while proceeding for the process of transferring title.
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