The lease contract on Koh Phangan: clauses a foreign buyer must check

When a draft lease lands in front of you, you are looking at the document that defines your property rights for the next 30 years. Most buyers focus on the term and the rental figure — and miss the clauses that decide whether you can sell the lease, leave it to your heirs, rent to tenants, or have any recourse if the landowner breaches. A developer's default template rarely includes the strongest versions of these protections. Here is what to check before you sign.

Start with the basics

• Term: exactly stated start and end dates — 30 years is the maximum. Section 540 of the Civil and Commercial Code is an absolute ceiling; any clause purporting to grant a longer initial term is void for the excess.
• Registration: the lease must be registered at the Land Office and endorsed on the back of the title deed. Section 538 makes this mandatory for terms over three years to be enforceable beyond year three. Confirm the registration has actually happened — not just that you hold a signed contract.
• Rental and payment: amount, frequency, payment method, and any rent-escalation clause. Understand the total contracted rent over the full 30 years — that figure determines the Land Office registration fee (1% of total rent plus 0.1% stamp duty).
• Permitted use: what you can and cannot do. This is where restrictions on alterations, subletting and commercial activity usually appear — read it carefully.

Succession clause: what happens when you die

Under Thai law, a lease may not automatically continue on the lessee's death — the standard position is that a lease is a personal contract, and without clear contractual provision your heirs may face difficulty asserting the right to continue for the remaining term. A succession clause provides certainty and should be treated as essential.

The clause to seek: an express provision naming your heirs or estate as entitled to step into your position as lessee for the remaining term. The stronger version is to register co-lessees on the original lease — a surviving co-lessee (for example, a spouse) continues automatically without relying on a clause being invoked. The lease and the building must also be inherited together to keep the asset intact; see Inheritance on Koh Phangan.

Assignment clause: what happens when you sell

By default, a Thai lease cannot be assigned to a third party without the lessor's active consent. Without an explicit assignment clause, the lessor can effectively veto your ability to sell the remaining lease term — or use that consent as leverage on the exit price.

The clause to seek: an express right to assign the remaining lease term to any third party without requiring prior lessor consent (or with consent not to be unreasonably withheld). Any assignment must also be registered at the Land Office — an unregistered assignment creates only a personal obligation and may not bind a new landowner or third party. For how the assignment clause affects exit planning and resale value, see Selling your leasehold villa.

Sublease rights: renting to tenants

Section 544 of the Civil and Commercial Code prevents the lessee from subleasing without the lessor's consent unless the lease explicitly permits it. For a villa you plan to rent out — even to long-stay tenants on monthly contracts — an express sublease clause is essential, or the landowner can claim you are in breach.

Note the overlap with the Hotel Act: stays under 30 days require a hotel licence regardless of what the lease says about subleasing. The sublease clause matters most for 30-day-plus tenancies, which are legally straightforward. See Renting out your villa.

Right of first refusal on the land

This clause does not appear in most standard leases but is worth negotiating. If the landowner decides to sell the freehold during your tenancy, you receive the first option at the offered price before it goes to anyone else.

Why it matters: a registered lease survives a sale of the land (the new buyer steps into the lessor's position for your remaining term), but the new landowner has no obligation to renew at year 30. A right of first refusal gives you a path to converting from leasehold to freehold if the land becomes available — and prevents the land moving to an unknown buyer whose relationship to you is untested.

Renewal: what can and cannot be promised

The March 2025 Supreme Court ruling (Case No. 4655/2566) settled this definitively: pre-agreed automatic renewal clauses for periods beyond the initial 30 years are void. Only the initial registered term is a property right. See Renewing a 30-year lease for the full legal background.

What a contract can legitimately contain: a good-faith obligation on the current landowner to offer renewal at expiry, or a right of first refusal on the new lease term. These are contractual promises against the original lessor — they do not automatically bind a successor landowner and are not registrable property rights. Plan the purchase around the primary 30-year term; treat any renewal language as a bonus, not a guarantee.

Protecting you during the term

• Prohibition on mortgaging or selling without consent: not automatic — the lease must include this. Without it, the land can be mortgaged or sold during your tenancy. A registered lease survives a change of landowner, but an undisclosed mortgage on the land creates real risk if the landowner defaults and a lender enforces.
• Quiet enjoyment: the lessor may not interfere with your use of the property during the term — state it explicitly.
• Maintenance division: structural repairs are the lessor's responsibility under the CCC; day-to-day maintenance is the lessee's. Specify in the contract who handles disputed middle ground — pool equipment, roofing, shared access roads.
• Compensation on early termination: define what you receive if the lessor materially breaches. Without a specific clause, you are left to litigation to establish the amount and timeline.
• Alterations and construction: if you plan to build or extend, the lease must authorise it — and the construction permit (Por. Ror. 1) must be applied for with the landowner's written consent. See Building a villa on Koh Phangan.

The building is a separate matter

The lease alone does not give you building ownership — it is occupancy of the land. Ownership of the villa itself must be secured by a separately registered superficies (สิทธิเหนือพื้นดิน) at the Land Office. That registration must appear on the back of the title deed, distinct from the lease registration. An unregistered superficies creates only a personal right between you and the original landowner and does not bind a future buyer of the land. See Superficies, usufruct and lease and How foreigners legally own a villa.

Practical requirements at registration

The lease must be in Thai for Land Office registration. Insist on a certified English translation alongside it — the Thai version governs, but you need to know what you signed. The registration endorsement appears on the back of the title deed, which the landowner keeps. Your documentary proof of the leasehold is the stamped registered lease copy — store it with the same care as a title deed.

No developer's default draft will contain all of these protections. The review and negotiation stage — before you sign — is where to add them. Use an independent lawyer, not the developer's own lawyer; that independence is the point. Once a contract is signed and registered, adding protections that were not in it requires renegotiating the whole agreement. For where the lease review fits in the full purchase process, see How to buy property on Koh Phangan step by step.