Under a conventional lease structure, the tenant obtains a pretty vulnerable legal position. He is no property owner, his use rights are limited to 30 years, and through this rent period, he is the first to suffer under various aspects at the whim of the landlord.
This unsatisfying situation makes the so-called leasehold structure a shabby alternative for a risk-averse foreign investor.
Therefore, when the lessee accepts to enter into a long-term lease agreement instead of obtaining full legal ownership, it is in his crucial interest to enhance his legal position by additional means – as good as it gets.
Such enhancements are called secured lease structures or – imprecisely – collective leasehold or protected leasehold.
The obvious need for a secured lease
In Thailand‘s property industry practice, protected leases or secured lease structures are typically used to provide the tenant with protection in the case of four events:
- The termination of the lease agreement for an important reason, which is allowed under Thai legislation and easily misused by the landlord especially when the contract is fully prepaid.
- The return of the property to the legal owner after 30 years, because the extension or renewal for additional 30 year periods is not at all guarantee.
- The transfer of the property investment to the tenant’s heirs or successors, which requires the amicable consent and active cooperation of the landlord.
- Each other case that requires a change, modification or flexibility in the restructuring of the…
Subscribe via Email
Bangkok cost of living : not as cheap as you may think
Thai and Vietnamese cities have once again moved up the rankings, with Bangkok rising 64 places in five years and...
Investment flows to developing Asian countries to fall 30% to 45% due to COVID-19
Foreign direct investment (FDI) to developing economies in Asia, hit hard by the economic downturn caused by the coronavirus pandemic,...
Hong Kong : no journalist in the world is free from China’s violent retribution
The new national security legislation China is imposing on Hong Kong could be used not only against journalists operating in...
Coronavirus will cost global tourism at least $1.2 trillion
UNCTAD estimates that for every $1 million lost in international tourism revenue, a country’s national income could drop by up...
Living in Thailand, a Guide for Expats
Many expats whose companies have transferred them to Thailand often live near their workplaces. But, if you are planning to...
Thailand’s tourism sector to lose over $47 billion (UN report)
Major tourist destinations such as Thailand, France and Germany stand to lose approximately US$47 billion each in GDP due to...
- Economics5 days ago
8.3 million Thai workers will lose employment or income in 2020 says World Bank
- Travel6 days ago
Thailand to lift ban on some international flights
- National1 week ago
Thailand finalizes Phase 5 restrictions easing plan
- Travel7 days ago
IATA urges governments to avoid quarantine measures