Buying Land In Thailand - Fraud

[peterchiangmai]

Last year I bought land of about two thirds of an acre in Hang Dong just outside Chiang Mai. When I say "I bought" in fact I mean that the purchase was arranged by my English sister, S***** and her husband, my brother-in-law, J***. The latter, being a Thai citizen, became the legal owner.

I came out to Thailand after Christmas and started clearing the land in preparation for planning and development. It started to look so good that my sister started to invent all sorts of obstacles for me.

The very fact that J*** legally owned the land was like a gun held to my head. But J*** and S**** fell back primarily on the excuse that the presence of a farang working on the land was causing villagers to make complaints. This they felt was a problem for them because they could be blackmailed. Can you believe that? They told me that at the time of purchase they had both had to sign a legal document denying that any of the purchase moneys had been imported from overseas. Well, of course, I had wired them the whole 1.7 million Baht and in fact I have the wire confirmation with me now to prove it. Anyway I suspect this was all bullshit because they have told me other lies as well.

Has anyone bought land through a Thai owner and heard of any sort of block on using overseas funds?

My inclination is to turn the whole matter over to the police, apart from anything else the whole business is probably a fraud, but before I do this has anyone any hard information on foreign funds not being allowed for land purchase? If there is truth in J*** and S****'s pretext could my report, unintentionally, land them in jail?

[charles]

Last year I bought land of about two thirds of an acre in Hang Dong just outside Chiang Mai. When I say "I bought" in fact I mean that the purchase was arranged by my English sister, S***** and her husband, my brother-in-law, J***. The latter, being a Thai citizen, became the legal owner.

I came out to Thailand after Christmas and started clearing the land in preparation for planning and development. It started to look so good that my sister started to invent all sorts of obstacles for me.

...They told me that at the time of purchase they had both had to sign a legal document denying that any of the purchase moneys had been imported from overseas. Well, of course, I had wired them the whole 1.7 million Baht and in fact I have the wire confirmation with me now to prove it. Anyway I suspect this was all bullshit because they have told me other lies as well.

Has anyone bought land through a Thai owner and heard of any sort of block on using overseas funds?

As I understand it, when a Thai national (i.e. your brother-in-law) that is married to an "alien" (your sister) buys land in Thailand, both parties have to sign a document with the Land Office stating that the funds used for purchasing the land are solely the property of the Thai person and the foreign spouse agrees to having no claim whatsover on the said land. Otherwise the land purchase will not be allowed to go through. So what they are claiming is, in effect, true.

I don't see how you can go to the police with it. Maybe you could go to the Land Office, although I'd worry you could just make things worse...

Sad state of affairs when you don't seem to be able to trust your own sister. Why did you support her in the first place?

[lopburi3]

1. Money used to buy land when done with a non Thai spouse must be declared to belong to the Thai party. The non Thai must acknowledge this. This is do to land not being available to foreigners and so there is no question later. It has nothing to do with the real source of the money. They told you the truth.

2. If you attempted to circumvent the land ownership laws of Thailand (you did) and intend to pursue this in court you had better be prepared to do the time.

3. Working in Thailand without a work permit is illegal. So your action would have drawn attention and could end up in trouble for both them and you.

[Digger]

Last year I bought land of about two thirds of an acre in Hang Dong just outside Chiang Mai. When I say "I bought" in fact I mean that the purchase was arranged by my English sister, S***** and her husband, my brother-in-law, J***. The latter, being a Thai citizen, became the legal owner.

I came out to Thailand after Christmas and started clearing the land in preparation for planning and development. It started to look so good that my sister started to invent all sorts of obstacles for me.

The  very fact that J*** legally owned the land was like a gun held to my head. But J*** and S**** fell back primarily on the excuse that the presence of a farang working on the land was causing villagers to make complaints. This they felt was a problem for them because they could be blackmailed. Can you believe that? They told me that at the time of purchase they had both had to sign a legal document denying that any of the purchase moneys had been imported from overseas. Well, of course, I had wired them the whole 1.7 million Baht and in fact I have the wire confirmation with me now to prove it. Anyway I suspect this was all bullshit because they have told me other lies as well.

Has anyone bought land through a Thai owner and heard of any sort of block on using overseas funds?

My inclination is to turn the whole matter over to the police, apart from anything else the whole business is probably a fraud,  but before I do this has anyone any hard information on foreign funds not being allowed for land purchase? If there is truth in J*** and S****'s pretext could my report, unintentionally, land them in jail?

<{POST_SNAPBACK}>

They have broken no laws - you stand to lose whatever you have invested - well infact in Thai law, its does not matter where the money has come from, basically you have nothing and nobody is going to be able to change that.

As for you working yourself on the land, that is a punishable offense and if convicted of working without a work permit (as of course its not your land) - you can be deported and denied future entry into Thailand.

The only way out of this as I see it is to get the brother in law to agree to transfer the land into a company. But he is under no requirement to do so as basically you have just given the 2 odd rai of land and odds are sounds like he is unlikely to give it back. Now of course, you could offer to BUY it from him but that may be throwing good money after bad. The last thing you should do is do anything else on that land, such as build a house.

[Tornado]

I dont think this will work out well at all. Im sorry you put so much trust into these people. I have heard thousands of stories of farangs getting ripped of in land deals, over the years.

I dont care about this being politically correct or not, but when any foreigner buys land in Thailand, use a Foreign Broker or Lawyer to do all of the due dilligance.

In my experience 99% of foreigners who have been in the business for at least 5 years (or reputable) will tell you everything you need to know, instead of, anything you ask about, if your using a Thai.

Yes, this is Thailand and people can say what they like, but a foreigner, will save you more money and headaches, if you use the right ones.

I hope it works out for you.

Edited March 1, 2005 by Tornado

[Khun Jean]

Another way to settle this is to offer further assistance which i think they need, BUT in exchange give you a 30+30 year lease of the land.

This lease is very straight forward and 100% legal.

You can write in this lease contract that your sister also has right to use the land because she has no rights on the land also. But that is up to you. No real money have to be exchanged and you will have the assurance that your investment is not completely gone. Promise anything you want but don't write it in the contract. Offer them help with payment for building a house etc.. ANYTHING to make them sign this lease contract. Ones it is signed you can fulfill those promises or not. As they not seem like the most honest peope you don't have to feel bad about this.

Best to kiss some @ss and try to get this lease. It will protect your sister also against her husband if their relation goes bad. The way it is now your brother in law can say thank you very much and kick you both out.

Best of luck.

Edited March 1, 2005 by Khun Jean

[Khun Larry]

Sorry to hear they scammed you. LOS Land of Scams

Classic Thailand at its finest!

Best Advice: Don't buy any land or housing in Thailand that cost more than a pack of smokes

[Digger]

I dont think this will work out well at all. Im sorry you put so much trust into these people. I have heard thousands of stories of farangs getting ripped of in land deals, over the years.

I dont care about this being politically correct or not, but when any foreigner buys land in Thailand, use a Foreign Broker or Lawyer to do all of the due dilligance.

In my experience 99% of foreigners who have been in the business for at least 5 years (or reputable) will tell you everything you need to know, instead of, anything you ask about, if your using a Thai.

Yes, this is Thailand and people can say what they like, but a foreigner, will save you more money and headaches, if you use the right ones.

I hope it works out for you.

<{POST_SNAPBACK}>

With respect Tornado, I have come across more crooked farang 'developer wanabees' and 'land agents' than Thai one's. Selling chanots without the land even being split is one of the prime examples, Upping the owner pirce is another very widespread practice invariably done by a farang. The smooth Farang and his Thai 'lawyer' mate are some of the worst examples I have seen. Granted a lot of this has happended in Chonburi but Phuket is just as bad - at least in Chonburi the chanots when they are granted are correct and legal. Dealing with the absolute owner of the land is critical and never believe anything any intermediary be it Thai or farang says - speak it through with the owner, include it in the sale contract and be honourable. Most Thai landowners are VERY nervous of Thai and farang land agents as none of them have a good name. Build the credibility with the owner and time after time of doing it I have never come unstuck. Also very important to have a lawyer on your side that is highly regarded and LOCAL to the area.

[Ajarn]

Last year I bought land of about two thirds of an acre in Hang Dong just outside Chiang Mai. When I say "I bought" in fact I mean that the purchase was arranged by my English sister, S***** and her husband, my brother-in-law, J***. The latter, being a Thai citizen, became the legal owner.

I came out to Thailand after Christmas and started clearing the land in preparation for planning and development. It started to look so good that my sister started to invent all sorts of obstacles for me.

The  very fact that J*** legally owned the land was like a gun held to my head. But J*** and S**** fell back primarily on the excuse that the presence of a farang working on the land was causing villagers to make complaints. This they felt was a problem for them because they could be blackmailed. Can you believe that? They told me that at the time of purchase they had both had to sign a legal document denying that any of the purchase moneys had been imported from overseas. Well, of course, I had wired them the whole 1.7 million Baht and in fact I have the wire confirmation with me now to prove it. Anyway I suspect this was all bullshit because they have told me other lies as well.

Has anyone bought land through a Thai owner and heard of any sort of block on using overseas funds?

My inclination is to turn the whole matter over to the police, apart from anything else the whole business is probably a fraud,  but before I do this has anyone any hard information on foreign funds not being allowed for land purchase? If there is truth in J*** and S****'s pretext could my report, unintentionally, land them in jail?

<{POST_SNAPBACK}>

Peter, sorry about your problems, especially in that you fear your sister is part of this... Feeling stung by your family is a most painful sting. And, in it's various scenarios, this story is not an uncommon here for many farangs...

But, I think, Lopburi summed up the reality pretty well, in my experience... Your neck could be on the line, too.

If you do decide to talk to a local lawyer, PM me and I will give you the name and number of a lawyer in Chiang Mai with an excellent reputation- a rarity in Chiang Mai..

[mickmac]

Peter, just calm down a bit. It looks as if your sister and husband were telling you the truth, okay? So now you need to approach them and see how you can progress to building a house , if that is your prime goal. As Khun Jean says start talks about sorting out a 30 year lease agreement.

(I don't know how legal the 30 + 30 agreements are), this will entitle you to use the land for the house you want to build. Remember although you cannot own the land you can still own the house on it.

The only stumbling block is if your brother in law refuses to lease the land to you, for a nominal sum, only then will you know that you have been ripped off.

I hope this helps.

[Khun Larry]

With respect Tornado, I have come across more crooked farang 'developer wanabees' and 'land agents' than Thai one's. 

<{POST_SNAPBACK}>

Bulldiddley

Please double check your facts and figures

[Ajarn]

With respect Tornado, I have come across more crooked farang 'developer wanabees' and 'land agents' than Thai one's.  

<{POST_SNAPBACK}>

Bulldiddley

Please double check your facts and figures

<{POST_SNAPBACK}>

Plenty of those kinds of hustlers in Thailand on both sides, in my experience

[PvtDick]

I think in the eyes of the law, Peter is the one who is committing an offense. Thai law forbids foreigners to own land, either outright or by proxy. I'd think first before going to the police!

[Kringle]

I would be wanting to shoot my sister, &lt;deleted&gt; is that? You invest any kind of money in Thailand and you better have an attorney. It seems as though you couldn't trust even your sister or this is a troll and doesn't mean diddly.

[Sumitr Man]

SECTION 113 OF THE LAND CODE

Any person who acquires land as an agent of an allien or juristic person under the provisions of Sections 97 or 98 shall be punished with a fine not exceed Bt. 20,000 or an imprisonment not exceeding 2 years, or both.

However, the above specifically applies to the use of nominees as shareholders in a limited company in order to make that company "Thai" for the purposes of buying land [s.97 & 98]. Whilst there is a school of thought that it also applies to individual nominees, it is questionable.

SM

[Harmonica]

Last year I bought land of about two thirds of an acre in Hang Dong just outside Chiang Mai. When I say "I bought" in fact I mean that the purchase was arranged by my English sister, S***** and her husband, my brother-in-law, J***. The latter, being a Thai citizen, became the legal owner.

I came out to Thailand after Christmas and started clearing the land in preparation for planning and development. It started to look so good that my sister started to invent all sorts of obstacles for me.

The  very fact that J*** legally owned the land was like a gun held to my head. But J*** and S**** fell back primarily on the excuse that the presence of a farang working on the land was causing villagers to make complaints. This they felt was a problem for them because they could be blackmailed. Can you believe that? They told me that at the time of purchase they had both had to sign a legal document denying that any of the purchase moneys had been imported from overseas. Well, of course, I had wired them the whole 1.7 million Baht and in fact I have the wire confirmation with me now to prove it. Anyway I suspect this was all bullshit because they have told me other lies as well.

Has anyone bought land through a Thai owner and heard of any sort of block on using overseas funds?

My inclination is to turn the whole matter over to the police, apart from anything else the whole business is probably a fraud,  but before I do this has anyone any hard information on foreign funds not being allowed for land purchase? If there is truth in J*** and S****'s pretext could my report, unintentionally, land them in jail?

As you point out quite clearly there is no trust -- on your part, that is -- negotiating a lease etc., or any other long-term deal is therefore tenuous at best --difficulties are sure to arise (in spades) further down the road -- after you've invested even more cash.

Walk away now. Take the loss! Don't get involved with the Police -- give your sister a break, man.

[The_Eye_Of_Sauron]

I don't think you've been shafted. I think they might be correct.

[thanalew]

I recognize this story. The English sister is Sarah of Sarah Guest House in Thapae Soi 4. What a bitch.

[Bobcat]

SECTION 113 OF THE LAND CODE

Any person who acquires land as an agent of an allien or juristic person under the provisions of Sections 97 or 98 shall be punished with a fine not exceed Bt. 20,000 or an imprisonment not exceeding 2 years, or both.

However, the above specifically applies to the use of nominees as shareholders in a limited company in order to make that company "Thai" for the purposes of buying land [s.97 & 98]. Whilst there is a school of thought that it also applies to individual nominees, it is questionable.

There has not to my knowledge ever been any court decision in Thailand stating that sections 97/98 of the Land Code apply to the use of nominees as shareholders.

Sumitr Man - what is your source of information relating to the application of Section 97 and 98 of the Land Code to the nominee structure regularly used in Thailand?

Regards,

Bob

[Thetyim]

I recognize this story. The English sister is Sarah of Sarah Guest House in Thapae Soi 4. What a bitch.

You are jumping to conclusions there

She has not done anything wrong YET

She has helped her brother "acquire" some land

She and her hubby are in a postion to rip him off.

They have not done so yet.

[TizMe]

1.  Money used to buy land when done with a non Thai spouse must be declared to belong to the Thai party.  The non Thai must acknowledge this.  This is do to land not being available to foreigners and so there is no question later.  It has nothing to do with the real source of the money.  They told you the truth.

My Mrs has bought 2 properties since we have been married. Her ID card still has her Thai name and not my surname. She has handled the transfers into her name without me being present.

As neither of us have signed any declaration as above, are there any legal ramifications for either of us?

[Ajarn]

I recognize this story. The English sister is Sarah of Sarah Guest House in Thapae Soi 4. What a bitch.

<{POST_SNAPBACK}>

Registering a new name just to spread malicious gossip because you don't want us to see your other 'nice' nick, perhaps?

My, what a Peyton Place Chiang Mai has become

[lopburi3]

1.  Money used to buy land when done with a non Thai spouse must be declared to belong to the Thai party.  The non Thai must acknowledge this.  This is do to land not being available to foreigners and so there is no question later.  It has nothing to do with the real source of the money.  They told you the truth.

<{POST_SNAPBACK}>

My Mrs has bought 2 properties since we have been married. Her ID card still has her Thai name and not my surname. She has handled the transfers into her name without me being present.

As neither of us have signed any declaration as above, are there any legal ramifications for either of us?

<{POST_SNAPBACK}>

If her Thai ID card also says she is not married I suspect there could be legal problems if/when she tries to sell. Her ID card should have been changed immediately after the marriage - even if keeping her former name.

[TizMe]

She did get a new ID card when we were married, but she kept her Thai name. So I presume that when she transferred the titles they didn't think to ask the question "Is your husband a foreigner?"

[lopburi3]

She did get a new ID card when we were married, but she kept her Thai name. So I presume that when she transferred the titles they didn't think to ask the question "Is your husband a foreigner?"

<{POST_SNAPBACK}>

Suspect you are right and in that case it should not be any problem.

[Sumitr Man]

SECTION 113 OF THE LAND CODE

Any person who acquires land as an agent of an allien or juristic person under the provisions of Sections 97 or 98 shall be punished with a fine not exceed Bt. 20,000 or an imprisonment not exceeding 2 years, or both.

However, the above specifically applies to the use of nominees as shareholders in a limited company in order to make that company "Thai" for the purposes of buying land [s.97 & 98]. Whilst there is a school of thought that it also applies to individual nominees, it is questionable.

There has not to my knowledge ever been any court decision in Thailand stating that sections 97/98 of the Land Code apply to the use of nominees as shareholders.

Sumitr Man - what is your source of information relating to the application of Section 97 and 98 of the Land Code to the nominee structure regularly used in Thailand?

Regards,

Bob

<{POST_SNAPBACK}>

Bob:

Section 97 of the Land Code, which I have in front of me, provides as follows:

Section 97The following juristic persons may have the same rights in land as aliens:

(1) Limited companies with more than 49% of their capital owned by aliens, or more than half of whose shareholders are aliens, as the case may be;

For the purposes of (1), if any limited company issues bearer shares, such shares shall be deemed to be held by aliens;

(2) All limited partnerships or registered ordinary partnerships with more than 49% of their capital owned by aliens, or more than half of whose partners are aliens, as the case may be;

(3) Societies, including cooperatives, more than half of whose members are alien, or which operate especially or for the most part, in the interest of aliens;

(4) Foundations whose object is especially or for the most part in the interest of aliens;

(5) REPEALED.

Section 98 of the Land Code is a "chain-section", whereby it provides for a step prior to this step, and stipulates as follows:

Section 98In the case of a juristic person in Section 97 becomes the owner of the capital, a shareholder, or a partner, as the case may be, in any other juristic person under the provisions of the preceding Section, such other juristic person shall be deemed an alien.

If you then read Section 113 of the Land Code, you'll clearly see that the use of "agent" in that section can be superimposed with nominee; thus, any Thai willing to act for an alien to avoid 97 or 98 would be subject to the penalties under 113.

On the issues of whether or not the Courts have ever ruled on this, I could not say. Nonetheless, the law on this issue is clear, even if the practice is not.

SM

[Sumitr Man]

Sorry, Bob:

On re-reading your post, if you're asking me what my authority is for say "Agent" = "nominee", you would need to refer to Section 797 of the Civil and Commercial Code of Thailand, which provides as follows:

"Agency is a contract whereby a person, called the agent, has authority to act for another person, called the principal, and agrees so to act.

Agency may be express or implied.

Thus, IMO, if you pay money to establish a company in which you hold less than 50% and allow Thais to hold in excess of 51%, without their needing to inject any capital, you would have an implied agency relationship. This situation would then become compounded in the event that you also required them to sign undated share transfer certificates - as is common practice here - as it would be clear that, as principal, you had control over your agent.

OTH, if the Thai injected theie own capital into the company, that could be evidenced as not being from you (i.e. you do not have a shareholders loan agreement or bank transfer), then clearly you would not have an agency relationship and all would be OK. But how many situations do you know where a house is purchased in the name of a company in which Thais have invested over half the capital of their own money? Not too many I bet

SM

[charles]

She did get a new ID card when we were married, but she kept her Thai name. So I presume that when she transferred the titles they didn't think to ask the question "Is your husband a foreigner?"

<{POST_SNAPBACK}>

Suspect you are right and in that case it should not be any problem.

<{POST_SNAPBACK}>

Under the law, I think there should have been a declaration made by the two of you. As you say, the Land Office would not have been aware she was married to a foreigner. Perhaps better keep it quiet if you sell as well! So legally/technically it might cause some problems, how much this will be the case in practice I don't know.

Actually, from what I remember of reading the law, the need for declarations also applies to "marriages" where the marriage has not been registered, i.e. where Thai and foreigner are cohabiting as partners. I'm sure Sumitr Man could clear this up...

[bkk_mike]

I would repeat what others have said.

Get a lease. Try and do the 30+30, but realise that the +30 is out the door if your brother-in-law dies in the first 30 years (unless you have a very good lawyer). i.e. It's fairly easy to get the renewal so that he is required to agree. But if he dies in the meantime, it's very difficult to get it so that the new owner is bound by a clause that they didn't sign.

Explain the lease to your sister as a way of getting them out of trouble. Since you'd then be working on land you've leased, rather than being perceived to work on land that doesn't belong to you. (and note that if that is deemed to be farming, labouring, etc. - you are actually breaking the law, as foreigners aren't allowed to farm without BoI exemption, or to do labouring work without a work permit, etc.)

i.e. Your brother-in-law, as owner of the land, could be perceived to have illegally employed a farang to do labouring work.

Admittedly, your brother-in-law might be trying to rip you off, but he could equally be telling the truth...

Do the lease - if he agrees, then he's not ripping you off, and as he'll have leased out the land, he's no longer responsible for what you do on it - so he'll be happy.

If he doesn't agree to the lease, unless someone knows a good reason for him not to agree (other than the obvious one - that he's ripping you off), walk away before you do any more work on it...

If you are being ripped off, remember in any dealings with the authorities that you do not own the land, that you never had any intention of owning the land (unless you want to get yourself chucked in jail). About all you can suggest is that you loaned the money to your brother-in-law for him to buy the land, and that he's now told you he's not paying you back. (i.e. You can get him into a bit of trouble with the land registry for stating the money didn't come from abroad, but that's about it. Non-repayment of a loan between brother-in-laws with no loan contract is unlikely to get him chucked in jail, but might make him lose face...)

[Sumitr Man]

Non-repayment of a loan between brother-in-laws with no loan contract is unlikely to get him chucked in jail

Unlikely being exactly right!

SECTION 653 Civil and Commerical Code:

A loan of money for a sum exceeding Bt.50 in capital is not enforceable by action unless there be some written evidence of the loan signed by the Borrower.

These days you have to get a loan contract signed just to lend someone enough to stand themselves a beer in the pub