90 year lease is just a con

[Wanderlust]

sarge,
You weren't the first nor the only one to warn of these dangers, and when others (including myself and buksida I believe before you were even a member of the forum) stated that these were loopholes that 'could' be closed or 'might' lead to problems later the people who had already bought in this way and some other interested parties tried to make it sound like we were causing worry over nothing. There will be some people out there who have successfully bought with leases and companies who have had good lawyers advising them and I am sure they will be OK; the people that are likely to have similar problems to the OP are the ones who used the tame local lawyers recommended to them by agents or developers, and there have been warnings for some years on this forum about this issue.

Having said all that, it is likely that the majority of people who went down the lease or company route will not have any problems - the market will pick up again and people will be able to sell their properties here. There have been strong rumours for some time that a change in the lease laws is coming as well to allow longer leases, so it is just unfortunate for the OP that he has found himself in the predicament that he needs to sell NOW, and that the owner of the land is in some legal problems herself. Property buying should always be done with the intention of a long term, either living in or renting it, and anyone who needs to sell quickly will always lose out - it is the nature of the market. I just hope the OP doesn't lose too badly.

[CraigDunn]

This discussion needs input from a real estate professional with knowledge, insight and integrity; so here I am.

Soi88 - have you spoken to Sara? Read Moja's post, and do as Moja has done - form a company, dissolve your lease and buy the freehold. Sara will go along with this, and not for the first time.

30+30+30 year lease contracts are, and always have been, dressed-up versions of the 30 year legal standard, most likely promoted by agents and developers who believed it themsleves, and perhaps by some who knew it was nonsense. The Hua Hin Land Office previously allowed inclusion of such extensions etc. but always pointed out that only the first 30 years was covered by the land law. The present new chief does not allow such extras to be included in lease registrations, which is a good thing.

The company model of property ownership is the most tenable solution. It's been in use since 1932 to enable foreigners to own real estate and business interests in Thailand. A generous interpretation of company law, allowing the use of nominee Thai shareholders and foreign diretors with absolute power over the company, has always been employed to create the opportunity for foreigners to invest here. In 2006, the Interior Ministry put a temporary stop to it in response to massively illegal dealings by foreigners misusing this system. After a few months, one plot of not more than rai per company was again allowed. The Land Office presently welcomes such companies and does not stand in the way of them owning a property. Land Offices countrywide operate under instructions from the Interior Ministry.

I have always explained the realities of leases and companies to all prospective buyers and those who have felt comfortable enough with the parameters have gone ahead and bought.

Agreed, 30 years is not long enough if one is paying full freehold-purchase price, and the company model is perhaps a ridiculously contrived arrangement, but it works.

We've all heard stories of foreigners losing their properties to Thai girlfriends and so on, but is there one story of a foreigner who has lost a property to the Thai government?

On this and other forums, and on thousands of bar-stools across the country, scaremongers vent their fears and concerns. And in beautiful pool villas surrounded by tropical gardens, thousands of foreigners live in their leased or company-owned properties which they bought for 20 - 25% of what such properties cost in Europe. It is exactly this value-for-money point which makes buyers willing to go along with the intricacies of buying property here.

My agency has without diffuculty resold several properties for our clients. We have dissolved leases and started new ones or converted to freehold; we have resold company-owned properties either by simply selling the company or by having the company sell its asset to the new buyer. It all works fine.

Soi88, my advice is to approach Sara about getting your property into a company. Even if she demands a bob or two, you'll still be better off and in a better position to sell. If you want my professional assistance, PM me.

cd.

[sargeant]

WL i did not say i was first but it sure as hell felt very lonely as i was attacked and often ignored by estate agents and developers when i asked questions they would not answer which was i suppose an answer in a way
I will if you request pm you the name of a very very promient member of similar ilk to your goodself who constantly attacked me and defended the indefensible
The point i was making in step with Levs post i may add was the information and very RED FLAGS were on this forum i will only speak for myself because i know i put them there
The fact is also that the same warnings still apply NOTHING has changed
Even if the Thai govt change to 90 year leases please dont think it is not gonna cost anything it will
The warning the OP is giving irrespective of his/her situation is real it is not a surmise, a guess, an i think, it is in fact a legality the extra 30+30+30 has NO legal standing full stop exactely what i warned years ago
edit
It was specifically to give those warnings that i joined this forum in the first place
many people will hopefully have no problems i dont want to see anyone loose any money to the scam merchants

[CraigDunn]

Wanderlust,

your post arrived while I was writing mine - I appreciate your level-headedess.

cd.

[Super Joe]

The OP's problems should be another reminder to people thinking of buying here to look around until you find a competent real estate lawyer. They are in Hua Hin, maybe Bangkok is a better option where the larger established firms are, with no ties to Hua Hin. How do you know if they are competent and putting all the right clauses in ? shop around the lawyers and have a read up on this and other Thailand forums, all the pitfalls, potential cons and relevant clauses to be included in the lease agreement have been covered extensively going back several years. Get a copy of the English translated Thai law codes covering leasing from a Bangkok bookshop, it's not confusing lawyer speak but fairly easy to understand.

Ofcourse, you shouldn't have to do all this and wouldn't have to back home, but no-one else is going to do it for you and it's your money.

Under Thai law (for over 100 years now) the OP would not need permission from their landowner to sell the property and transfer the lease rights to the new buyer if the relevant clause had been included in the lease agreement in the first place. There's at least 8 or so key clauses to be included in the lease, (and I'm not talking about 30+30 extensions), that are not protected by Thai law unless added in the agreement.

Good luck, and if you're not 100% sure about it don't buy.

SJ

[Soi 88]

The second two 30 year leases are basically a Gentlemen's agreement.

I bought, knowing full well that this was the situation.

I could now purchase the land in my sons name.

Thank you for the response Baa Baa but I can't help wondering how you would be able to sell to someone else, would the buyer be happy with a 'gentlemen's agreement'?

What happens when the person you have a gentlemen's agreement dies. Will you trust the new heir as much? Also, do you know a lease is not inherited after your death despite what is written in your disputable lease contract the remaining term and lease rights will not automatically transfer to your heirs. I would purchase the land in your sons name if you can ASAP.

Lev - sorry I did not mean to critisise your valuable website forum! Some people give good advice and some do not and that is not your responsibility! Regarding using the unqualified Real Estate agent I think they are ALL unqualified!!! My advice to anyone is if you are thinking of buying a house DON'T and if you are foolish enough to do so like we were then dont use a useless Real Estate agent. because don't need their nonsense sales talk they make the law up as they go along!

Thank you to all the other responses and advice which I will seriously consider. As for the advice to create a company and have the company buy the land from the landlady, I would like to know how can I do this if the land office does not allow this practice anymore. I thought foreigners buying through a company was stopped at the land office and that was why we had to buy using a lease. Can anyone explain please?

[sargeant]

I dont like being the guy to pour cold water on another fantastic way out idea but Baa Baa unless your son is OVER 18 years of age i have been told by two different unrelated thais it is a no no he has to be older than 18 suggest you check with a GOOD lawyer

[Super Joe]

I dont like being the guy to pour cold water on another fantastic way out idea but Baa Baa unless your son is OVER 18 years of age i have been told by two different unrelated thais it is a no no he has to be older than 18 suggest you check with a GOOD lawyer

Sarge a Thai minor, even if born of an Alien parent, can aquire land under Thai law. Before registering the Land Office official has the right to look into the registration to make sure no laws/regulations being broken, ie: is the child being used by the foreign father to hold land on their behalf (nominee) or is it a genuine gift from foreign father and Thai mother to their child for his future etc etc.

SJ

[Super Joe]

Also, do you know a lease is not inherited after your death despite what is written in your disputable lease contract the remaining term and lease rights will not automatically transfer to your heirs.

There should be a clause added in your 30 year lease registered at the land office that allows your heirs to inherit upon your death, as you say this is not done automatically. A good lawyer will advise that you include a.n.other family members on the initial lease so upon a husband and wife's death the family members do automatically continue with the remaining lease period and rights without needing the lessor to attend land office. We have often seen 3 or 4 people registered on the 30 year lease at the land office.

As for the advice to create a company and have the company buy the land from the landlady, I would like to know how can I do this if the land office does not allow this practice anymore. I thought foreigners buying through a company was stopped at the land office and that was why we had to buy using a lease.

No, they have not stopped them (a Land Office official told us a while back they had) but in reality they are just asking for additional documentation. Limited Companies are still registering land. This might be a way for you to go to resolve your unfortunate situation!?

SJ

[sargeant]

SJ the only reason i posted that post was because Mrs Sarge could NOT put her son on the chanote because he was only 14

[Nereus]

SJ the only reason i posted that post was because Mrs Sarge could NOT put her son on the chanote because he was only 14

Do not want to buy into this one, but I was told the same thing by a reputable Bangkok Lawyer. The first thing that is required is a Thai ID card, which I cannot remember for sure, but I believe the age requirement is 16 years of age.

[Super Joe]

There's a large Thai Real Estate forum where many farangs discuss that their land is in their minor's names and the implications. The child has to have a legal guardian to sign contracts and papers at the land office, the child can not sell the land until it reaches maturity (age 16 ??). The risk is the guardian can sell the land on behalf of the child, but they have to get a court order for this, ie: prove it is in the child's best interest.

There's a write up about it in this link to one of Bangkok's largest law firms (established 1890), it's under the 6th item down entitled: 'Land Systems, Rules, and Regulations' http://www.tillekeandgibbins.com/Public ... index.html

SJ

[johnnyk]

faq2mfh wrote
Miked hit the nail on the head, twice… But whole thing sickens me to no end… The victim ends up the being blamed for the problem. You should have done this… You should have checked that

i,m pleased that i.m not alone on this.
the government are looking at none trading companies. what,s next.?? companies that are trading?. a turnover of 5 million baht before that company can purchase property?. we have no idea what the government will do but the odds will be against foreign nationals.
you cannot own land here in your own name. various options that you have to acquire land are open to debate. imo you are playing with fire and you could well loose your investment.
one last point regarding a trading company. in order to buy a house (You can buy a house no strings, buying land is the issue) this way you have to file a tax return and pay tax.? so your paying tax on money that you haven't earned and you also have to pay for an accountant to file your tax return.? (the tax thresholds are quite reasonable, you can charge expenses etc. in the end you will pay very little. sometimes we have to adapt, we aren't in Kansas anymore) doesn't seem very fair does it.? (no it doesn't. it is reality though)miked

[CraigDunn]

Soi88,
the best source of information is the horses mouth, that's where I regularly update mine. If you ask the HH Land Office about registering your property in a company they will tell you exactly how to do it. You can also ask the Commercial Registrations Dept. of the Ministry of Commerce (in Prachuabkhirikhan) for specific instructions on how to set up that company.

Please, I may be an agent, but I do not deserve to be tarred with the same brush used for others. My buyer clients are all satisfied; the only people who don't like me much are some other agents and developers whose nonsense I have consistently refused to broker.

cd.

[margaretcarnes]

Despite Craigs' reassurances and advice, I have to take issue with his statement that thousands of farangs have the benefit of properties in LOS costing 20 to 25% of their value back home.
Judging by property prices in HH Real Estate offices late last year some new places there were priced in the several million baht league. Detached villas with pools of course - but does the build quality equate to Western standards sufficiently to justify that lower percentage cost?
Hopefully 'Soi88' hasn't invested such a huge sum. But it's still clearly enough to have become a serious problem in the present economic climate, and I have every sympathy.
Many of us at some time in LOS have fallen foul of dodgy deals and leases. Often sadly perpetuated by fellow Farangs. We have learnt as we have gone along, and have no doubt often had no option than to put our faith in a Thai 'lawyer' - plough through endless contract papers - and trust that the English translation is correct. Which is where I personally believe much of the perceived 'misrepresentation' comes about - in the translation.
I hope that Soi88 can find a way around the problem. Maybe by forming a company, although even that isn't particularly cheap. But is this case just the tip of the HH iceburg?
There have been several things recently which have affected the HH property market. Not least the probable over provision of new build. Then the loss of faith in developers generally. The political problems and subsequent loss of tourism. And not least the world recession, which has resulted in many Westerners losing their pension pots altogether.
None of which could have been foreseen 3 years ago when Soi88, and maybe many others, bought in good faith.
On the plus side I don't think the prospect of a 30 year lease, or even a 27, is a deterent to many Farang buyers. If the price is right a buyer in their 60's for example probably wouldn't be too worried about being homeless at 90 odd. So good luck Soi88. If the worst comes to the worst and you have to abandon the house and go home PM me for advice on how to deal with the DWP!