Is There A Loophole In The Land Laws. . .

[Godders]

Forgive me, for I may simply be hallucinating after reading all those depressing posts on the pitfalls of buying land and property in Thailand. But isn't there a simple way to ensure at least some protection for falangs buying homes for themselves and their Thai loved ones.

As I understand it, if the marriage subsequently fails a falang has no legal claim on the family estate - even though, as is generally the case, he or she provided the money to buy the land and property.

The Thai divorce court regards these valuable assets as a "gift" to the Thai spouse and will not usually take them into account in a divorce settlement. (One is tempted to ask how this squares with the recently introduced Thai Constitution which expressly forbids discrimination on the grounds of religious, creed or race. . . )

But gifts, surely, can work both ways. I know of nothing in Thai law to prevent a Thai wife or husband from giving money to their falang spouse - for example, his or her share of the proceeds of the family home if the relationship goes belly up

[Sumitr Man]

I don't know where you have got the idea of "gift" from - with most land purchases farangs have to sign a document that states (1) they have no claim over the land; and (2) they have in no way assisted with the purchase of the land.

Both of these requirements are set out in the Land Code: as requirements prior to the registration of the land in the wife's name.

As to loopholes, the best one I know is to buy a condo

SM

[Godders]

Sorry. Sumitr man and the rest of you, but the last portion of my post about trying to offer some protection for falangs buying land and property with their Thai spouses somehow never made it onto the page. . .

In the missing bit, I suggested a possible solution was for the falang husband and Thai wife to sign an agreement that in the case of divorce, the land and house should be sold and the spoils split 50-50 or whatever they felt was fair.

By the way. . .

You may not understand my "gift" reference, Sumitr Man, but the Thai divorce courts certainly do. Ask any falang foolhardy enough to have submitted himself to their jurisdiction. If you can find one.

[Thetyim]

By the way. . .

You may not understand my "gift" reference, Sumitr Man, but the Thai divorce courts certainly do. Ask any falang foolhardy enough to have submitted himself to their jurisdiction. If you can find one.

OK I have got my hand up.

In fact I have got both hands up because I have lost two houses

Please hurl a barrage of insults at me just to make sure I don't do it again.

[Zarkow]

Godders>> Time to read up on the law.

http://www.dol.go.th/guide/land_080745_eng.htm

But most importanly:

http://www.dol.go.th/guide/foreigner_Eng_ver.htm

3.1  In the case where a Thai national who has an alien legitimate spouse applies for permission to purchase land or accept a transfer of land in a similar case during marriage or cohabitation as husband and wife with an alien, as the case may be, if after the inquiry the applicant and the alien spouse have given a joint written confirmation that the money which that Thai national will expend on the purchase of the land is wholly the separate property of that Thai national and not the community property or the jointly acquired property, the competent official will proceed with the registration of rights and juristic act.

You have no legal right to claim the land your wife bought.

[Sumitr Man]

I'm not too sure I understand what you mean by "gift" and divorce. Are you saying that if you get divorced, and claim in court that you helped pay for the house, the court's will say the money you paid was a "gift"?

If so, although this may be true, the court's shouldn't need to rely on this because you are not allowed to assist in the purchase of property bought in your wife's name after you have married - the law strictly prohibits this. Likewise, the gift of immovable property cannot be considered sin sot (among farang/Thai relationships).

Practically speaking we all know this to be cobblers and most (if not all) farangs help in the purchase of the house - if not buy it outright. But were I to go to court, I wouldn't have a leg to stand on on this count.

As for the legal contract, yes I think you could do that. The problem would be the enforcement of that as the Thai wife would be allowed to revoke the contract at any time during the marriage and for a period of one year from the day of dissoultion of the marriage, provided that no third party rights were affected [section 1469 of the Civil and Commercial Code].

On a more serious note, the only way I know for you to "protect" your investment is to get your wife to sign a loan agreement for the purchase price of the house - the loan to last the duration of the mortgage, or 30 years (whichever is better for you). Then , should you break up, you enforce the loan by way of sale of the house. But, whether you'll be successful or not is another matter.

On that point I've always said - don't spend more than you would be willing to lose outright and don't go through with the pruchase if you even remotely think you'll not stay together - it's not worth the risk: and renting in Thailand is so cheap

SM

[Heng]

On a more serious note, the only way I know for you to "protect" your investment is to get your wife to sign a loan agreement for the purchase price of the house - the loan to last the duration of the mortgage, or 30 years (whichever is better for you).  Then , should you break up, you enforce the loan by way of sale of the house. But, whether you'll be successful or not is another matter.

This is probably the most practical and safest solution. Although it pretty much telegraphs to your spouse that you do not trust them, and this type of relationship will limit the growth of "family" property holdings in the long run (while the children of others inherit their swaths of real estate, your children will be getting a house with a mortgage to pay down).

[cdnvic]

Have your wife buy the land, and lease it to you for a low price (but not ridiculously low, that the courts may rule unreasonable) and then you can pay to build a house on it. You own the building, she owns the land, and you have a 30yr lease that even her family cannot mess with if something happens to her.

cv

[mrbojangles]

Have your wife buy the land, and lease it to you for a low price (but not ridiculously low, that the courts may rule unreasonable) and then you can pay to build a house on it. You own the building, she owns the land, and you have a 30yr lease that even her family cannot mess with if something happens to her.

cv

CV,

I am looking to buy (sorry my wife !!) is looking to buy some land this year and then we will build a house on it. Yes, it will be funded totally by me. Your suggestion seems so simple and would totally meet my needs. Is this a legally binding solution? i.e. there is no way in the case of a Divorce or her death that this could be terminated?

Mr BoJ

[bkkbound04]

i've heard of this method...

i think u have hit on a valid point and one that should be checked e.g if your thai wife leaves the land to her parents in the will....

maybe they could argue the agreement or fight for a nominal fee in compensation to pay you, u could end up with your house in the back of a few pick ups if the parents don't want u on their land

i'd be interested in hearing more on this subject

[Dragonman]

The formal lease would still be binding if freehold was in new ownership ( as long as the lease was drawn up correctly ), what may not be as binding is the 30 year option that a number of people attach to the lease.

[Crossy]

Not a loophole but this thread may be worth investigating:-

http://www.thaivisa.com/forum/index.php?showtopic=34007

Usufruct, apparently gives you an effective lifetime lease, certainly worth a look

DC

[Thetyim]

Have your wife buy the land, and lease it to you for a low price (but not ridiculously low, that the courts may rule unreasonable) and then you can pay to build a house on it. You own the building, she owns the land, and you have a 30yr lease that even her family cannot mess with if something happens to her.

cv

Correct but you have not mentioned what happens if you divorce.

The lease is worth money as it generates an income

Your assets are divided between you so she is entitled to half the lease.

[Dragonman]

Whilst I have not seen any case law on the matter. I don't see why a peppercorn rent should invalidate the lease. There is no reason why an economic rent is charged.

[Godders]

By the way. . .

You may not understand my "gift" reference, Sumitr Man, but the Thai divorce courts certainly do. Ask any falang foolhardy enough to have submitted himself to their jurisdiction. If you can find one.

<{POST_SNAPBACK}>

OK I have got my hand up.

In fact I have got both hands up because I have lost two houses

Please hurl a barrage of insults at me just to make sure I don't do it again.

<{POST_SNAPBACK}>

The last thing I (or anyone else in their right mind, I imagine) would wish to do, Thetyim, is to add insults to the injury you have already suffered in terms of emotional and financial trauma.

I for one have the utmost sympathy for anyone falling foul of the racist Thai land laws, which forces falangs into a paranoid and defensive posture when entering into lifelong relationships with Thai partners.

If it is not too painful for you, I am sure many of us who might be in a similar predicament one day would like to hear an account of just what happened when you sought justice through a Thai divorce court.

I believe it is in the interests of Thais as well as falangs actively to campaign for a change in Thailand's land ownership and property laws, which are not only unfair but also racist (and as such in contravention of the Thai Constitution).

The guarantee of a more equitable distribution of assets in the event of a marriage break-up would result in more falangs investing their lives and resources in Thai families, with obvious social and economic benefits to the country.

In the meantime, however, falangs must continue to risk all - or seek partial protection from on lease or morgage agreements which, by their very nature, inevitably undermine the mutual trust on which any marriage needs to be based.

[Sumitr Man]

Whilst I have not seen any case law on the matter. I don't see why a peppercorn rent should invalidate the lease. There is no reason why an economic rent is charged.

<{POST_SNAPBACK}>

Hi Dragonman:

You are correct, a peppercorn rent will not invalidate a contract. Nonetheless, the Revenue Department does not acknowledge "peppercorn" rents, and for income tax purposes will assess a "fair market rate" against the landowner, regardless of whether or not the actual rent is a peppercorn rent. This tends to be the reason why "economic rents" are charged.

SM

[Sumitr Man]

Not a loophole but this thread may be worth investigating:-

http://www.thaivisa.com/forum/index.php?showtopic=34007

Usufruct, apparently gives you an effective lifetime lease, certainly worth a look 

DC

<{POST_SNAPBACK}>

DC,

I understand this would only work if there was no "debt" (i.e. mortgage) involved.

SM

[Thetyim]

The last thing I (or anyone else in their right mind, I imagine) would wish to do, Thetyim, is to add insults to the injury you have already suffered in terms of emotional and financial trauma.

Godders,

Thank you for your kind words and sympathy.

I do not blame the thai law however, I blame myself.

I was aware of the thai law before I bought each house.

I try to explain the risks to other falangs but all too often my advise falls on deaf ears. Right now I can see another TV member making this same mistake.

[Dragonman]

Whilst I have not seen any case law on the matter. I don't see why a peppercorn rent should invalidate the lease. There is no reason why an economic rent is charged.

<{POST_SNAPBACK}>

Hi Dragonman:

You are correct, a peppercorn rent will not invalidate a contract. Nonetheless, the Revenue Department does not acknowledge "peppercorn" rents, and for income tax purposes will assess a "fair market rate" against the landowner, regardless of whether or not the actual rent is a peppercorn rent. This tends to be the reason why "economic rents" are charged.

SM

<{POST_SNAPBACK}>

SM. Quite right and so they should. Just suggesting that this is a better way not to get stung on divorce, regarding lease value. Mind you who am I to preach. Was involved in property law for nearly 30 years and everything's in my wife's name.

I just don't give a monkey's bum.

[Sumitr Man]

... everything's in my wife's name.

I just don't give a monkey's bum.

That makes 2 of us mate - the car (which is in my name) and coffee-maker, that's all I need

[meadish_sweetball]

The last thing I (or anyone else in their right mind, I imagine) would wish to do, Thetyim, is to add insults to the injury you have already suffered in terms of emotional and financial trauma.

Godders,

Thank you for your kind words and sympathy.

I do not blame the thai law however, I blame myself.

I was aware of the thai law before I bought each house.

I try to explain the risks to other falangs but all too often my advise falls on deaf ears. Right now I can see another TV member making this same mistake.

Well, my ears are open. Your advice being 'rent or buy a condo, forget a house', or something else?

[Crossy]

Not a loophole but this thread may be worth investigating:-

http://www.thaivisa.com/forum/index.php?showtopic=34007

Usufruct, apparently gives you an effective lifetime lease, certainly worth a look 

DC

DC,

I understand this would only work if there was no "debt" (i.e. mortgage) involved.

SM

Probably correct, we are buying our land via 'owner finance' no banks involved.

DC

[Bilko]

... everything's in my wife's name.

I just don't give a monkey's bum.

That makes 2 of us mate - the car (which is in my name) and coffee-maker, that's all I need

<{POST_SNAPBACK}>

And one more is 3. The pick up is in my name though, throw a few shirts in the back and away I go again......Great stuff.

No worries about what will happen if it all goes tits up, no worries about what will happen if The Thai government has a crack down on Bogus companies, no sleepless nights for me, I like to KNOW just where I stand.

Edited June 13, 2005 by Bilko

[Sumitr Man]

Only way to do it - life here gets too tough "adios". If you are REALLY worried about how to structure your land ownership in Thailand, you probably shouldn't be doing it

Just my 0.02c worth

[TokyoT]

Unfortunately I do not think there is any sure fire way to guarantee you are protected if things go sour between you and your wife. Best advise on this front is to not spend more than you are willing to loose.

Even if you think you have a 100% solid case going into court you are still the farang – and sorry to say nothing is guaranteed for you in a court of law in the Kingdom.

It really is a shame as I think many farang would be willing to invest more in land and houses in Thailand if the laws were different. I can even understand the logic behind not wants foreigners corning the real estate market in Thailand and therefore providing a certain level of protection to the local population. But what would be wrong with simply requiring any/all property to be sold at the time of the divorce and splitting the proceeds 50/50? At least you would be secure in not loosing it all. Plus isn’t the little misses entitled to that 50% for putting up with our crap for the time we were married?

I have already told my wife in no uncertain terms I will not invest/build/buy anything in Thailand if I can not be listed on the title. I would be more than willing to have both of us listed on the title even. My stand at this point is that Thailand obviously does not want me to invest in land here or they would change the laws.

Car – no problem – I buy it – my name goes on the title.

House – big problem – technically I can not even buy it – remember that little piece of paper signed at the time of purchase indicating your Thai wife paid for the property with money that is her own money.

[mrbojangles]

House – big problem – technically I can not even buy it – remember that little piece of paper signed at the time of purchase indicating your Thai wife paid for the property with money that is her own money.

Now I'm a Tad (to say the least ! confused). Is what your saying:- If you buy a house that is already built on a freehold piece of land, can only the wife own it all, lock stock and 2 smoking barrels? Whereas, if you buy a piece of land and build a house on it she can own the land but i can own the house that is on it and then (as mentioned earlier) she leases me the land for say 30 years

Mr BoJ

[bkk_mike]

House – big problem – technically I can not even buy it – remember that little piece of paper signed at the time of purchase indicating your Thai wife paid for the property with money that is her own money.

<{POST_SNAPBACK}>

Now I'm a Tad (to say the least ! confused). Is what your saying:- If you buy a house that is already built on a freehold piece of land, can only the wife own it all, lock stock and 2 smoking barrels? Whereas, if you buy a piece of land and build a house on it she can own the land but i can own the house that is on it and then (as mentioned earlier) she leases me the land for say 30 years

Mr BoJ

<{POST_SNAPBACK}>

Exactly - she buys the land. You lease it from her (30 year lease, with possible option to extend for a further 30). Then you build the house.

House is yours for at least 30 years. (even if she divorces you, dies before you, etc.). Assuming she's still alive after 30 years, your option to extend for another 30 can be exercised.

However, I'm yet another farang who doesn't practice what he preaches... House and land are in my wife's name. (we've got kids and I get on well with the family, so even if she died, the house would belong to the kids. It's not like the house here is my only asset. I can get by without it...)

[Heng]

SumitrMan,

In regards to these "spouse owns the land/ I own the house lease agreements" ...would it be considered trespassing to get to your house over someone else's land under the current law? Not a huge issue for most houses... but what to do if it's a 300 meter driveway and the inlaws decide to build a closed concrete wall on their land?

[SpaceKadet]

... everything's in my wife's name.

I just don't give a monkey's bum.

That makes 2 of us mate - the car (which is in my name) and coffee-maker, that's all I need

<{POST_SNAPBACK}>

Well, my bike, and my guitar in my case... OK, maybe the harddrive with all my MP3's too...

[Sumitr Man]

Heng:

Obviously it would depend somewhat on the amount of land we are talking about. However, basically you would have an automatic right of way over the land in question as you cannot stop someone's access to a main throughfare.

Section 1349 Civil and Commercial Code

If a piece of land is surrounded by other pieces of land, which means that it has no access to public ways, the owner may pass over the surrounding land to reach the public way.

....

[para 3]The place and manner of the passage must be so chosen as to meet the needs of the person entitled to the passage and at the same time to cause as little damage as possible to the surrounding land.  The person entitled to passage may, if necessary, construct a road for passage.