90 year lease is just a con

[caller]

Usufruct anyone?

http://www.isaanlawyers.com/Usufruct%20 ... ailand.pdf

[Super Joe]

Caller wrote:

Usufruct anyone?

Yes, some people have been opting for them for a while now, lawyers and the Land Office have been recommending them a lot, people are wary as they had not heard of them before as I hadn't. It originates from Roman Law (not some new Thai real estate gimmick), they're used in many European countries.
There's a thread in the property section about a year ago about them: http://www.huahinafterdark.com/forum/fo ... t9136.html

SJ

[barrys]

Randy,
While I'd normally agree with you, I think this thread has kept pretty much to the point and been largely objective rather than objectionable, for a change.

The contributors do appear to be wanting to genuinely assist the OP.

[margaretcarnes]

Soi88 - thankyou for posting your lawyers advice. It's very interesting and also disturbing, particularly the reference to possible future changes and monitoring of proxy shareholders.
This practice has certainly been widely used for years. The proxy shareholders were present on my own Thai company papers 9 years ago. I was told it was standard practice, and the nominees were just paid for signing, and there would never be any 'comeback' from them. And indeed there wasn't, but it was clearly not above board.
As for the inheritance laws, I was always given to understand that they didn't exist for foreigners in LOS.
SJ's list, although as he says a guide, is I think a step too far in some respects. Clauses 7 and 8 in particular I can't see being acceptable to a lot of landowners/lessors, for the simple reason that in principal they would be required by law to virtually surrender all rights over their land.
I've owned a leasehold property in England and don't recall such clauses here, (although of course with 125 year leases the norm now it is a different situation.)
Nor do I recall any clause here similar to SJs clause 5, regarding restrictions on the landowners right to re-mortgage. A more sensible alternative would surely be to include a clause requiring subsequent owners or mortgagees of leased land to honour the rights of existing leaseholders? Which would perhaps require much more commitment to the concept of foreign ownership than the Thai government is prepared to give.
Back to square one - lipservice to the IMF?

[STEVE G]

Clauses 7 and 8 in particular I can't see being acceptable to a lot of landowners/lessors, for the simple reason that in principal they would be required by law to virtually surrender all rights over their land.

I agree with you Mags, but in principle they should surrender all rights to the land for the simple reason that these property developers seem to be selling on 30 year leases for exactly the same price as they will sell outright to a Thai.

[MrPlum]

Harmonization of real estate laws is ongoing in many countries and changes are to be expected from time to time. No right-minded government would 'kill the goose that is laying the golden egg' so changes tend to limited to allowing the government to rake in a few more baht. An example is Portugal, where those who held properties 'offshore', (a vibrant market at the time), were forced to bring them 'onshore', so the government could not just remove what was effectively a tax dodge but bring Portugal's property laws in line with the rest of Europe. I would add that corruption at the land office was par for the course with those giving approval for developments, ending up with the 'Show House' or a prime lot. Spain is little different. Italy is a nightmare of bureaucracy. The Italians find ways around it, while foreign buyers are put through the ringer.

I met one man recently who having built a property on a development here, calculated that he 'owned' only 28% of it due to the way the company was structured, having paid 100% of the price. I would never participate in such an arrangement.

I'm with you Sarge. Without more protection for buyers, purchasing property in LOS is too much of a risk.

[sargeant]

Hopefully this will be my last post on this topic so let me wish soi88 all the best of luck and thankyou for putting up some more red flags on 30+30+30 and the company route and save at least some mug joe public from being screwed

The advice always given was get a good Honest lawyer Bangkok being better than hua hin

That is EXACTELY what soi88 has done so let us see what his lawyers advice was

consultatations with a competent lawyer from Bangkok that this 30 year so-called extension contracts carry no legal weight whatsoever.

partners in the company and the use of nominees is illegal and will lead to unlawful foreign land ownership.

Our Thai Lawyer has refused to help us with the company route because he says it’s illegal

Is the next piece of advice to ignore him or keep going until you find one that will tell you what you want to hear Hua Hin being better than Bangkok

[Super Joe]

Clauses 7 and 8 in particular I can't see being acceptable to a lot of landowners/lessors, for the simple reason that in principal they would be required by law to virtually surrender all rights over their land.

These clauses go in all our leases and I think all the leases that the lawyer in question negotiates for the buyer. In today's market I bet you won't find many landowners refusing them and losing a 8M Baht house property sale. It's a buyers market after all.

SJ

[margaretcarnes]

Good points there from Steve G and Superjoe about clauses 7 and 8. Which kind of suggests that, as the deals available to landowners are too good to turn down, the properties are maybe a tad overpriced?

[seasidesurfer]

I really believe a Usufruct is the only way under the presant system but beware when going to the Land Office. They tride to extract 10,000 Baht from me to process the paperwork. The legal amount to pay is 55 Baht.

[Soi 88]

Its always quite funny when one of these property threads crops up. It gets started, and by day 2 or 3 its already on page 4 or 5.

They really consists of the same people arguing about the same things as they did last time one of these threads popped up.

The original posters question quickly gets hijacked as the naysayers move in and the developers defend their profession...

This is what these property charlatons are expert at!

Splitlid – He didn’t quite say we were fu@ked! Our lawyer offered to build a case to sue the Real Estate agency and the Property Lawyer that we used to ‘buy’ our house. He said they are knowingly giving deceptive advice to flout the law which is illegal, but we declined his offer as we feel that would be too dangerous. Off the record he advised us to try to get out of the lease by finding a Thai we could trust to buy the land outright and then immediately try to sell it for us and we have someone in mind to do this. He did not charge us anything for the 2 very informative consultations we had with him.

We go home tomorrow so we have to leave this matter until we come back in October.

[splitlid]

ok soi 88,
thanks for the info, glad there may be a way out of this for you, i hope it works out.

[STEVE G]

He didn’t quite say we were fu@ked! Our lawyer offered to build a case to sue the Real Estate agency and the Property Lawyer that we used to ‘buy’ our house. He said they are knowingly giving deceptive advice to flout the law which is illegal, but we declined his offer as we feel that would be too dangerous.

If it is illegal to give out information on flouting the law (and I don’t doubt your lawyer), then there are a ridiculously large number of people in the Thai/Falang property industry doing it!

[CraigDunn]

The Royal Thai Government Ministry of Tourism and Sports promotes their "Thailand Second Home Program" - http://www.thailongstay.co.th/service.html - in which the Thai Longstay Management Co., Ltd., in which the Ministry has a 30% stake, takes your program-entry money (roughly 10% of your property's value), makes a company with your name but with their reps as shareholders, registers your property in that company and then gives you a 30 year lease with options for resale and renewal, which they guarantee as long as you pay another 10% re-entry fee. They also charge you annually about 100,000 baht for the company's audit and "administration" of the agreement.

I'd like to make 2 points:

1. They could definitely have that lawyer for breakfast.
2. So-called property charlatans do it much cheaper.

cd.

[sargeant]

i think this Royal Thai Government Ministry of Tourism and Sports program has had a specific act of parliament passed JUST for this program and does not apply to general public EXCEPT through this program
I dont think the land act or lease laws were changed for it

Hopefully this will be my last post