Ground lease is a type of real estate agreement. In Bangkok, foreigners often engage in ground leases due to property ownership laws.
Foreign nationals cannot own land outright, making ground leases an attractive alternative.
Ground lease differs from freehold ownership. Freehold ownership allows the owner unlimited control over the property and land, whereas a ground lease limits the tenant to the use of the land for a specified period.
Examples include shopping centers and office buildings where businesses operate on leased land.
Ground leases feature long-term agreements. Typically, these leases extend for 30 to 99 years, ensuring stability for tenants like international schools and embassies.
Another popular feature is the lease renewal option, which allows tenants to extend their lease upon expiration. Ground leases usually involve fixed or periodically adjustable rental rates, providing predictability for both parties.
Common features of ground leases include the tenant’s responsibility for property taxes, insurance, and maintenance. This arrangement ensures that the property remains in good condition.
Subleasing is often permitted, allowing tenants flexibility in utilization. Ground leases contain specific development clauses, guiding what can be built or modified on the leased land.
Unusual features specific to ground leases in Bangkok include restrictions on property usage, influenced by Thai laws. For instance, certain leases dictate that the land can only be used for commercial or industrial purposes.
Some leases incorporate a reversion clause, where improvements revert to the landowner at lease end. Another rare feature is the participation clause, entitling the landowner to a percentage of business profits generated on the property.
Unique to ground leases are clauses addressing land use change. These agreements may allow the tenant to change the land’s use, subject to approval.
Ground leases in Bangkok might include a buyout option, a rare feature allowing tenants to purchase the land outright under specific conditions. Ground leases may offer rights to subdivide the land, granting tenants greater flexibility in development.
Ground leases share features with other lease types, such as responsibility for taxes and maintenance, but differ significantly in terms of land ownership and lease terms. Ground leases provide a unique opportunity for foreign investors in Bangkok to utilize land without owning it, a significant deviation from more permanent ownership models like freehold.
For a deeper understanding of real estate terminologies related to ground leases and more, visit our glossary about Bangkok real estate.