What Happens to a Lease When a Property Is Sold to a New Owner in Thailand

The Core Question: Is a Lease Terminated When a Property Is Sold?

Many tenants in Thailand fear that a sale of an apartment or house automatically terminates their lease. That is not the case. Under Thai law, a change of ownership does not in itself dissolve an existing lease: the new owner acquires the property already 'encumbered' by the agreement and is obliged to honour it for the remainder of its term.

The key provision is Section 569 of the Civil and Commercial Code of Thailand (CCC). It establishes that when ownership transfers to a new owner, both the rights and the obligations of the former landlord toward the tenant transfer as well. In other words, the buyer steps into the seller's position in the lease relationship, and the tenant may demand performance from the buyer directly.

However, there is a critically important qualification that almost everyone overlooks. The protection afforded by Section 569 does not extend to the entire text of the agreement - it covers only those parts that, by their nature, constitute 'real lease rights'.

The Two Layers of Any Lease Agreement

Thai law divides the content of a lease into two categories, and they behave differently when the property is sold.

1. Real lease rights. These form the 'core' of the tenancy relationship: the rent amount and the lease term, the permitted use, the landlord's obligation to remedy material defects, and the right to sublease (if expressly provided). Such terms follow the property by operation of law and are automatically binding on the new owner.

2. Ordinary contractual obligations (contract rights). These are additional promises between the parties, grounded in freedom of contract rather than in the statutory rules on lease. Classic examples include a right to renew the lease after 30 years, an option to purchase the property, penalty clauses, and a provision for the lease to pass by inheritance. These clauses are treated as personal obligations of the former owner. They do not transfer to the buyer automatically and may prove unenforceable against the buyer if the buyer has not expressly assumed them.

Why This Matters Especially for Renewals and Options

The term of a registered lease in Thailand is capped at 30 years (Section 540 CCC). The long-form '30+30+30' structures marketed to foreign buyers are built precisely on a promise to renew the lease in the future. But a promise to renew is a contractual right, not a real lease right. If the property is sold before the renewal point is reached, the new owner is not legally obliged to honour it. This is exactly why renewal and purchase options are so vulnerable when ownership changes - they rest on the goodwill of a specific individual, not on a statutory rule.

The Role of Registration at the Land Office

There is a further line of protection here. Under Section 538 CCC, a lease for a term exceeding 3 years must be registered at the Land Department (Land Office), failing which it is enforceable only for the first 3 years.

• A registered lease appears in the encumbrances recorded against the property. A buyer can see it during due diligence, and it is fully protected against the buyer with respect to all 'real' rights.
• An unregistered lease for a term exceeding 3 years is, in practice, ineffective against a new owner beyond the three-year threshold.

Registration is therefore not a formality - it is the condition under which Section 569 operates at full force.

Comparison: What Passes to the New Owner

Prepaid Rent and Advance Payments

Advance payments represent a separate risk. If a tenant has paid a substantial sum upfront - a common practice under long-term leaseholds - the new owner is, under the 'real' lease rights framework, obliged to honour the remaining term, but the reimbursement of amounts already paid and the set-off of the prepayment are matters to be resolved between the tenant and the former owner. For a prepayment to be enforceable against the buyer, it should be reflected in the registered lease terms, not only in a separate receipt.

How to Protect Yourself in Advance

The best strategy is not to rely on Section 569, but to embed the important terms in the very core of the agreement and to register it. A strong position looks like this: a long term within the 30-year ceiling, registration at the Land Office, an express inclusion of the right to sublease and assign, and a written undertaking by any future buyer to recognise the additional options as a condition of the sale transaction.

For condominium units, it is also worth noting a related restriction: the foreign ownership quota under the Condominium Act is 49% of the total floor area of the building, and payment by a non-resident must be made by way of an inward foreign currency transfer documented with a FET form (Tor.Tor.3). This affects which type of title - freehold or leasehold - is available to a given buyer in the first place.

What to Check and What to Watch Out For

• Whether the lease is registered at the Land Office if the term exceeds 3 years (Section 538) - without registration, protection against a buyer cuts off at 3 years.
• Which terms are genuinely 'lease' rights and which are contractual: the term and rent transfer; renewal and purchase options do not.
• Whether the agreement expressly includes a right to sublease and assign - this is a 'real' right and passes to the new owner.
• How the future buyer's obligation to honour renewal or purchase rights is documented - it must be a condition of the sale and purchase agreement, not a verbal promise.
• How any advance payment is recorded - whether it appears in the registered lease terms or only in a separate receipt.
• Whether the term stays within 30 years (Section 540); renewal structures are legally weaker than the primary term.
• For condominiums - whether the 49% quota is observed and whether payment has been processed via a FET form (Tor.Tor.3) if freehold title is being considered.