30 year leases

[Larry]

I have recently read about about 30 year renewable leases, as a way of getting around the prohibition on foreign real estate holding.  Are these leases all paid up front, or do you pay for them every year?

Any other information about them would be appreciated.

Thanks

[Thailand]

Currently in the process of buying/building a house in Chiangmai. Wife and I both farang.

We are buying on the 30+30 etc lease. We are paying up front and have been advised that we will receive the Chanot, basically the title deed, on completion and it will be in our names.(I will advise on this one later!)

The lease can be transferred to other parties and in the event of a change in the law allowing farang to buy land then the lease agreement allows for a "roll over" from lease to outright ownership.

[REGGIE]

LITTLE INFO.

How to buy land in Thailand

Published on Nov 15, 2002

Thai property law states that with a few exceptions – like a Board of Investment approval or suitcases full of money deposited in a Thai bank – foreigners are not allowed to own freehold land. They can only lease the land for a maximum of 30 years. But Thai law has many grey areas; in fact, it seems at times it has more grey areas than black and white areas.

In 1999, the government lurched out of the 19th century to amend the property law to allow a Thai spouse (male or female) of a foreigner to buy land.

Unfortunately it only lurched as far as the early 20th century. For the spouse to buy land, proof is required that the money used to purchase the land is legally the Thai partner’s, with no foreign claim to it. Get divorced or separated and the Thai “ex” gets to keep it all. Even if the Thai spouse dies, the foreigner has no claim to the land and there is nothing to stop the relatives from moving in (if they haven’t already) and booting you out.

If you want a house to call your own without the prospect of your spouses’ relatives circling hungrily, this is not a good option.

Most foreigners who “own” land and houses – as opposed to condos, which can be owned outright – go for a leasehold agreement of typically 30 years, with two prepaid 30-year renewals. The lease will include clauses that automatically allow freehold ownership if the laws of foreign ownership change in the future, and the right to sell and/or transfer the property.

This gives you 90 years with strong backup, making it effectively ownership.

Just to complicate things a little, while you can only lease land, all the buildings – either on the land when it was purchased, or improved or built by you after purchasing the land, are yours freehold. Technically this means that once the lease expires, the owner of the land must purchase the building(s) at an independently and legally valued price, or negotiate another lease period. God knows how that can work.

The structure of a lease agreement needs to be watertight. But because this has become the preferred way of holding land in Thailand for foreigners, this type of lease agreement has become more or less a template, with add-ons to suit individual buyer’s needs.

But don’t draw it up yourself. Get the advice of a lawyer versed in such things. And don’t sign anything or hand over any money until you fully understand and are happy with what’s written on the lease agreement.

                                 TIGERMAN

  PS:SEND REPLY

[huahin]

Currently in the process of buying/building a house in Chiangmai. Wife and I both farang.

We are buying on the 30+30 etc lease. We are paying up front and have been advised that we will receive the Chanot, basically the title deed, on completion and it will be in our names.(I will advise on this one later!)

The lease can be transferred to other parties and in the event of a change in the law allowing farang to buy land then the lease agreement allows for a "roll over" from lease to outright ownership.

<{POST_SNAPBACK}>

I realise that this is an old post, however where does one find the office to obtain the paper work to lodge for a 30 year land lease. I will be living in Nakhon Sawan so I'm assuming that it is the Land office where my wife had to go to exchange money for chanot. Is that correct or is it another office. Could you please advise, thanks, much appreciated.

[dugdig]

Every lease I have heard of (I have no direct experience in leasing property) has been drawn up by a lawyer.

Leases are limited to 30 years. It is easy for a Thai judge to see that a 30 year lease with automatic renewal is just an attempt to get around the 30 year lease limit. If no issues arrise which requires the intervention of the judicial system then the extended lease is probably ok but if push comes to shove and you go to a judge then it depends on who can influence the judge most.

In Thailand many non-legal things are tolerated. Giving your passport so an agency can take it to the border to renew your visa is strictly illegal but there are long running agencies which do this for a fee. Prostitution is strictly illegal but exists openly throughout Thailand. Illegal whisky is the drink most common in every small vilage. This is fine until the authorities decide to intervene....then the shit hilts the fan. It seems like many people have these extended leases but as far as I can tell they are not legal.

PLease note that I have no direct experience whith this stuff and this is only what I have read and heard.

[RamdomChances]

Currently in the process of buying/building a house in Chiangmai. Wife and I both farang.

We are buying on the 30+30 etc lease. We are paying up front and have been advised that we will receive the Chanot, basically the title deed, on completion and it will be in our names.(I will advise on this one later!)

The lease can be transferred to other parties and in the event of a change in the law allowing farang to buy land then the lease agreement allows for a "roll over" from lease to outright ownership.

<{POST_SNAPBACK}>

I realise that this is an old post, however where does one find the office to obtain the paper work to lodge for a 30 year land lease. I will be living in Nakhon Sawan so I'm assuming that it is the Land office where my wife had to go to exchange money for chanot. Is that correct or is it another office. Could you please advise, thanks, much appreciated.

<{POST_SNAPBACK}>

HuaHin, I"ve lived in Nakon Sawan for about 4 years now, yes it will probably be the local land offfice "tee din" you will probably have to go to the local "ampour" gov office as well.

Where are you going to be staying up here? If you need any help, local advice feel free to PM me.

Cheers RC

[Sumitr Man]

Leases are limited to 30 years.  It is easy for a Thai judge to see that a 30 year lease with automatic renewal is just an attempt to get around the 30 year lease limit.  If no issues arrise which requires the intervention of the judicial system then the extended lease is probably ok but if push comes to shove and you go to a judge then it depends on who can influence the judge most.

<{POST_SNAPBACK}>

SECTION 540 of the Civil and Commercial Code of Thailand

The duration of a hire of immovable property [land] cannot exceed thirty years.  If it is made for a longer period, such period is reduced to thirty years.

The aforesaid period may be renewed, but it must not exceed thirty years from the time of renewal.

Thus, a 30+30 year lease is quite legal. A 30+30+30 year lease, OTH, is questionable.

SM

[dugdig]

Sumitr Man,

Thats great! Where did you get this info? I'd like to read more.

Dugdig

[Sumitr Man]

Sumitr Man,

Thats great!  Where did you get this info?  I'd like to read more.

Dugdig

<{POST_SNAPBACK}>

I'm afraid to say, most of it is inside my head (from reading several different statues). PM me if you have any specific questions and I'll try and direct you to the relevant legislation.

SM

[dugdig]

Where do you find these statutes in English? I don't have any particular topic in mind but I can always do a search of the document to find the appropriate section when a question arrises..

[Boh Bpen Yang]

Where do you find these statutes in English?  I don't have any particular topic in mind but I can always do a search of the document to find the appropriate section when a question arrises..

<{POST_SNAPBACK}>

Here's one place. You have to have Adobe as the translation is in PDF format.

http://www.moj.go.th/english/mainmoj/legislation.asp

That is Ministry of Justice site.

[Boh Bpen Yang]

Here's another both are limited and translations are noted as not official.

http://www.thaigov.go.th/

Note: you will have to click the 'English' button in the upper left and then the 'Home', 'About Government', or 'News' button to change the body to English.

[Sumitr Man]

^ I don't think either of those 2 sites has what you specifically want.

Essentially Thailand has 5 cornerstone codified [civil system - unlike the UK, which is common law] laws [books]:

* The Civil and Commerical Code;

* The Civil Procedure Code;

* The Criminal Code;

* The Land Code; and

* The Revenue Code

In each of these you'll find the basis for Thai law. Built up on these are the regulations and announcements that supplement them. These regulations and announcements can usually be found on the net - at the relevant ministry's site. For those I suggest you go to: http://www.eppo.go.th/index_thaigov.html [NOTE: it will take some time to download - it's a huge website].

Anyhow, the actual laws themselves are available on the internet, but in my experience they're only available in Thai.

That said, if you buy the book, you can get the book so that one page is in Thai, with its corresponding English language translation on the next page (i.e. page 1 - Thai, p.2 English translation of P.1 Thai). Translations are done by a number of people, but by far the best I've found are those done by a fantastic [local] law firm in Thailand by the name of Chandler & Thong-ek.

If you want to buy these books, they cost circa. Bt 1,500 and can usually be found at CU Books (Siam Sq) or any SE-ED Bookstore (personally I always go to CU Books).

One more thing, there are additional laws in Thailand to the above, for example the Bankruptcy Act, Commercial Banking Act, Credit Foncier Act, and so on and so on. Nearly all of these are available on the websites cited above; but not the thumping great legislation you'll need.

Hope this helps.

SM

PS - if you are not in Thailand, and are still interested in reading them, let me know and I'll see if I can ship them to you.

[dugdig]

Thanks both of you for in web sites and the quick overview of Thai law and the book reference. This is something I've been wondering about for a long time so you've been a great help.

Thanks again,

Dugdig

PS I live in Chiangrai but thanks for the offer to ship....its much appreciated!

DD

[Sophon]

Leases are limited to 30 years.  It is easy for a Thai judge to see that a 30 year lease with automatic renewal is just an attempt to get around the 30 year lease limit.  If no issues arrise which requires the intervention of the judicial system then the extended lease is probably ok but if push comes to shove and you go to a judge then it depends on who can influence the judge most.

<{POST_SNAPBACK}>

SECTION 540 of the Civil and Commercial Code of Thailand

The duration of a hire of immovable property [land] cannot exceed thirty years.  If it is made for a longer period, such period is reduced to thirty years.

The aforesaid period may be renewed, but it must not exceed thirty years from the time of renewal.

Thus, a 30+30 year lease is quite legal. A 30+30+30 year lease, OTH, is questionable.

SM

<{POST_SNAPBACK}>

Although I'm no lawyer, I'm not sure I agree with that interpretation of the text.

It's clear, that a lease can legally be renewed for another 30 years when it expires. But I believe a renewal per definition has to occur at or near the end of the expiration of the original lease. To preagree on and prepay a 30 year extension of a 30 year lease, is in effect to agree on a 60 year lease. In my opinion it's clearly against the spirit of the law, and like dugdig I wouldn't count on such an extension to be upheld in a court of law.

Similarly I wouldn't be to confident about creating a Thai company for the purpose of owning land. If the company is a bona fide company also used for conducting business, then it would probably be ok. But to create a Thai company for the sole purpose of owning land would again in my opinion constitute a clear breach of the spirit of the law. Should Thaksin order a crack-down on these basically empty shell companies, I wouldn't be confident about my legal ownership rights.

Just my opinion. You are of course entitled to disagree.

Sophon

[JimGant]

It's clear, that a lease can legally be renewed for another 30 years when it expires. But I believe a renewal per definition has to occur at or near the end of the expiration of the original lease

I tend to agree. I've got a thiry-year lease, and 'tho I was aware of the 30+30 (+30) option, the guy at the land office talked us out of it as not being enforceable. I didn't have a lawyer, but a friend who did was advised to go the 30+30 route.

So, who knows. The land office guy was a real stand-up individual; and when asked, 'What do we need to pay in prepaid rent?', his figure was about one/fifth that paid by my lawyer-advised friend for about the same size plot. So, lawyers suck worldwide, I guess.

And I really didn't care, as 30-years down the road I'll be 90, drooling at both ends, and unconcerned.

[huahin]

Currently in the process of buying/building a house in Chiangmai. Wife and I both farang.

We are buying on the 30+30 etc lease. We are paying up front and have been advised that we will receive the Chanot, basically the title deed, on completion and it will be in our names.(I will advise on this one later!)

The lease can be transferred to other parties and in the event of a change in the law allowing farang to buy land then the lease agreement allows for a "roll over" from lease to outright ownership.

<{POST_SNAPBACK}>

I realise that this is an old post, however where does one find the office to obtain the paper work to lodge for a 30 year land lease. I will be living in Nakhon Sawan so I'm assuming that it is the Land office where my wife had to go to exchange money for chanot. Is that correct or is it another office. Could you please advise, thanks, much appreciated.

<{POST_SNAPBACK}>

HuaHin, I"ve lived in Nakon Sawan for about 4 years now, yes it will probably be the local land offfice "tee din" you will probably have to go to the local "ampour" gov office as well.

Where are you going to be staying up here? If you need any help, local advice feel free to PM me.

Cheers RC

<{POST_SNAPBACK}>

Thanks RC, will do that.