Taking Over a Leasehold Business in Thailand: Lease, Deposit and Landlord Checks

The advertised takeover price is only one part of a leasehold-business transaction. The buyer must also confirm the legal right to occupy and operate from the premises, the money payable to the landlord, the assets included and the obligations that continue after handover.

1. Identify every party and document

Obtain the current lease and all amendments, renewal letters, side agreements, receipts and notices. Verify the identity and authority of the tenant, landlord, property owner and any agent. If the person collecting rent is not the registered owner, request evidence of their authority.

2. Check the remaining term and registration status

Record the commencement date, expiry date, renewal wording and any conditions for exercising an option. Some longer leases of immovable property require registration to be enforceable for the intended period. Have a Thai lawyer review the documents and verify the relevant Land Office record instead of relying only on the wording shown in an advertisement.

3. Confirm assignment, subletting and landlord consent

Many leases restrict assignment, subletting, a change of control or a change of operator. Ask the landlord to confirm in writing whether the existing lease can be assigned, whether a new lease will be issued, and which conditions must be met. Do not assume that paying the seller transfers the premises.

4. Calculate all landlord payments

Confirm current rent, VAT or withholding-tax treatment where applicable, common-area charges, service charges, deposit, advance rent, key money and future rent increases. Establish whether the existing deposit will be transferred, refunded to the seller or replaced by the buyer, and obtain written acknowledgement from the landlord.

5. Verify permitted use and licences

The lease, building rules, planning or building-use requirements and business licences should permit the intended activity and operating hours. Check restrictions on alcohol, music, signage, kitchens, exhaust systems, alterations and outdoor areas where relevant. Existing permissions may not automatically transfer to the buyer.

6. Separate business assets from landlord property

Create an inventory showing which fixtures, furniture, equipment, stock and improvements belong to the seller, landlord or a finance company. Inspect their condition, confirm outstanding finance and photograph important items. The sale agreement should state what remains at completion.

7. Understand repair, alteration and reinstatement duties

Review responsibility for structural repairs, utilities, air-conditioning, fire systems, insurance, licences and routine maintenance. Check whether renovations need prior consent and whether the tenant must restore the premises when the lease ends. These costs can materially change the real investment required.

8. Review termination and default clauses

Understand late-payment consequences, cure periods, early termination, casualty or closure provisions and what happens to the deposit and improvements after default. Check for existing breaches, unpaid rent, landlord notices or disputes before taking over.

9. Make completion conditional on the premises being secured

The transaction documents should coordinate the business purchase with the signed assignment or new lease, landlord consent, deposit treatment, licence requirements, inventory and handover. Avoid releasing the full purchase price until the agreed documents and keys can be delivered together. Use independent Thai legal and tax advice.

Official starting points

Land registration information should be checked with the Department of Lands, while current tax treatment should be checked with the Revenue Department. Requirements depend on the property, lease and transaction, so obtain advice based on the actual documents.