Renewing a 30-year lease in Thailand: what actually happens and the real risks

The single most persistent misconception in Thai property is 'my lease renews automatically.' It does not — and after the March 2025 Supreme Court ruling (Case No. 4655/2566), there is no longer legal ambiguity about this. Understanding what actually happens at the end of a 30-year term changes how you should buy, what clauses to insist on, and how to plan the exit.

What the law says: Section 540

Section 540 of the Civil and Commercial Code sets an absolute ceiling: a lease of immovable property cannot exceed 30 years. The section explicitly permits renewal — but only at expiration, and only for a fresh term that also cannot exceed 30 years. No contract can override this. A lease that purports to grant more than 30 years from inception violates a mandatory rule of law and is void for the excess.

What the Supreme Court settled in March 2025

Judgment No. 4655/2566, issued in March 2025, settled a long-debated question about so-called '30+30+30' structures. These were leases in which all three 30-year terms were signed simultaneously — often with a single up-front payment covering all three periods — marketed as giving 60 or 90 years of secure tenure.

The Court ruled that treating this arrangement as a single long-term lease disguised as sequential terms violates Section 540. The two renewal periods signed at the same time as the initial lease — even if paid for — are void. Only the initial registered 30 years constitutes a real property right. The ruling also highlighted renewals with identical terms as a marker of the circumvention intent; future renewals negotiated fresh, with adjusted rents, may be on stronger footing — but that is a fresh negotiation at expiry, not an enforceable pre-agreed commitment.

How renewal actually works post-ruling

At the end of the registered 30-year term, a further lease is legally possible under Section 540. But renewal depends entirely on the person who owns the land at that point agreeing to grant a new lease. They are under no legal obligation to do so.

• The original lessor may no longer own the land. It may have been sold, inherited by heirs or passed through corporate succession. A new owner steps into the contractual shoes of the original landlord for the duration of the registered lease — but has no obligation to grant a new one.
• Renewal can be on entirely new commercial terms. There is nothing stopping the landowner from demanding a substantially higher rent, a shorter term, or different conditions.
• No automatic compensation. If the landowner declines to renew, there is generally no legal obligation to compensate you for the expiry — unless the original lease contract specifically included such a provision.
• Renewal cannot be pre-registered. You cannot go to the Land Office with a renewal signed before the original lease expires and register it as a property right for the next period.

What is still enforceable within the initial 30 years

The ruling does not invalidate rights and protections that operate within the initial registered term. These are enforceable and worth negotiating when the lease is drafted:

• Succession clause — the right of your heirs to step into your position as lessee if you die during the term. Without this, the lease may end at your death. See Inheritance on Koh Phangan.
• Assignment clause — the right to sell the lease to a third party. Without an explicit assignment clause, transferring the lease to a buyer may require the landowner's active cooperation. See Selling your leasehold villa.
• Right of first refusal to purchase — if the landowner wants to sell the land during your tenancy, you get the first option at whatever price they are offering. This may eventually give you a path to converting to freehold.
• Compensation clause on early termination — if the landowner materially breaches the lease or sells the land in a way that triggers early termination, the clause specifies the compensation you receive.
• Registered superficies on the building — separately titles the villa from the land. The superficies itself can carry a renewal clause for a further 30-year term, and building ownership survives independently of what happens to the lease. See Superficies, usufruct and lease.

If you already hold a 30+30 or 30+30+30 lease

Your initial 30-year registered term remains fully valid and enforceable as a property right. The ruling does not retroactively cancel the first period. What it settles is that renewal periods signed simultaneously with the original are void beyond year 30.

The practical advice from Thai property lawyers is to begin renewal conversations with the landowner well before the term expires — ideally five to ten years out — while the leverage of a good relationship still exists. The worst time to negotiate is in year 29 under pressure. If the landowner has changed, trace the new owner early and establish a relationship. Some lawyers also advise exploring conversion (BOI-promoted structure or condominium freehold if the building qualifies) while the original lease still has years left and your position is strong.

For new buyers: price and plan around the primary term

A leasehold purchase on Koh Phangan today should be priced and planned as a 30-year asset. Renewals are possible but not guaranteed — treat any renewal promise as a bonus that may materialise, not as a committed additional term. The planning question is: can you achieve your financial goals within the primary 30-year period? A lease with 25 years remaining is quite different from one with 12. See Selling your leasehold villa for how the remaining term affects exit liquidity and pricing.