NEW LEASE LAWS:

Foreign businesses can feel relaxed now as the Act Governing the Lease of Immovable Property for Commercial & Industrial Purposes has increased from 30-50 years & allowed lease rights to be mortgaged as security. For investors this means: a longer lease can accommodate long term business planning & the right to mortgage the lease as security in order to receive finance. Financial institutions can benefit because they can take a lease right as security.

Regulations: 50 yrs now. Only applies to immovable property for commercial & industrial reasons. Only the owner can lease it.Lease must be in writing & registered.

The Government Gazette Aug 2000: says the business must have one of the fiollowing.

1/. Commercial business with at least 20m baht in investment

2/. Industrial businesses qualify for promotion under the Investment Promotion Act.

3/.Other commercial or industrial businesses beneficial to the economy. property leased must be located in industrial are as set out in the City Planning Act or the Industrial Estate Authority of Thailand. Land Dept must approve leases over 100 rai. Foreign leases must comply as well with the Foreign Business Act. Leases can be renewed after 50 years for another 50 years. If the lessee dies the inheritor can take over. The lesses can sub lease or transfer lease rights, either wholly or in part, to a third party.

MORTGAGE OF LEASE RIGHT:

Since a lease right can be mortgaged, if the debtor defaults on payments the lease may be seized & sold at a public auction. Mortgagee may claim: 1/. The debtor has failed to pay interest for 5 years; 2/. Mortgagor hasn't satisfied the court that the value of the property is greater than the amount due & 3/. There's no other registered mortgages or preferential rights on the same property.