“Thirty Means Thirty” (Future Rent Not Included)

Why you have taken an interst in reading this (and why my email/phone keeps buzzing)

Since the Supreme Court’s March 2025 decision in a case about a hold-over tenant who bet on a ‘30 + 30 + 30’ renewal and lost, our firm’s inbox has been a permamnent revolving door of enquiries: the same question, just daily new senders. “Is my lease still good for 90 years?” “Didn’t I pre-pay the next 30?” “Do I really have to renegotiate at year 31 and pay a new rent?” “Isn’t the renewal term automatic by the terms of the leasing contract?

Below is the calm, caffeine-fuelled answer we’ve been giving to our firm’s clients – expanded into a short opinion so I can finally stop copy-pasting. Our summary advice: Keep what does work in your agreements, ditch the folklore that leasing is something more than a tenancy for a period of years, and align future drafting with the Court’s guidance with protections that are not intended to usurp the spirit of a standard 30 year maximum lease term under Thai law.

30 + 30 +30 myth-buster: The case ruling at a glance

In Supreme Court Judgment No. 4655/2566 (18 March 2025) the hold-over tenant argued that the land lease, which provided a lease period of 30 years with renewal rights, automatically renewed because the contract stated that the lease would be extended at the end of the 30 years – and because he had prepaid rent for the ‘second’ and ‘third’ 30-year term at signing. The landlord, who had actually acquired the land subject to the lease, said “Nice story, now pack.” The Supreme Court agreed with the landlord, calling the renewal clause an illegal workaround of the statutory 30-year ceiling. Pre-payment, good intentions and an express, agreed contract clause did not matter.

Statutory bedrock: Section 540 CCC
The case turned on an interpretation of Section 540 of the Thai Civil and Commercial Code:  which states that a lease of immovable property “may not exceed thirty years.” Any longer term is automatically reduced. Renewal is legally possible - but only after the original term expires and only for up to 30 years from the new signing date. In practice, this means a new contract must be negotiated and signed by landlord and tenant.

In the Court’s eyes, these provisions are short, crystal-clear, and far older than the 30 +30 + 30 concept created by foreign developers seeking to sell property in Thailand.  The Court’s ruling basicaly means that many ‘90-year’ property acqusiton structures you’ve seen could be an attempt to usurp the maximum 30 year period – making the renewal legally void or unenforceable.

Some legal context: Thailand does not have judge-made law
Because Thailand follows a civil law model, codified statutes outrank court opinions. Supreme Court decisions are persuasive, not binding precedent; and technically they resolve only the dispute in front of them. Yet lower courts and officials read them carefully, and refer to them for guidance. Think of Supreme Court opinions as bright neon ‘Danger’ signs rather than iron gates, but it is important to understand that the ruling in this case does not mean that all your contracts are now automatically void or unenforceable.

What the Court actually said

1. Form can’t beat substance. Labelling the second 30-year period a ‘renewal’ doesn’t help when the parties locked it in on day one, even when the period is ‘pre-paid’.
2. Public-policy ceiling. Locking ownership-like control in a lease agreement contract for 60–90 years might offend public order and the limitations of the law that apply to leases.
3. Payment ≠ protection. Advance rent for the phantom period buys zero legal muscle. There is no way to ‘project’ the value of lease renewals into the future and the law does not permit one to do so in the form of a pre-payment.
4. Hold-over equals trespass. When 30 years ended, the tenant became a squatter and could be evicted. The court even ruled that the holdover-tenant was liable for damages and had to remove his buildings!

Who might be sweating?
Foreign lessees may suddenly find that the once-glossy promise of virtual freehold’ seems far less attractive in light of these recent legal developments. Developers will be compelled to rethink their sales strategies. Landlords, on the other hand, gain increased leverage during renewal negotiations – a benefit now, but a potential precursor to future litigation. Determining who controls the right to renew might now take on a totally new meaning. Meanwhile, lawyers are fielding urgent queries and rewriting numerous contracts to align with the new legal landscape.