medina

Medina

The voidable contract would be the original purchase you made from the Developer. In other words the land would go back to the Developer, you'd get your money back, and then he would have to sell it within 1 year .This is why the law allows for "in good faith", so that any innocent party does not lose from an illegal act. In fact the Developer would receive a large fine or a prison sentence and you would go on as normal, unless you coluded.

Morning Dragonman,

Thank you. Does "blink" suggest the developer probably wouldn't have to sell the land? But what happens if I have built a house on the plot? Will the developer have to refund the cost of this as well? And, what is the situation if the developer has not got the financial means to buy back the land and/or building? Do you know of any situations where what you describe, has happened? Lots

of questions! Look forward to learning more.

Regards,

Medina

The Developer will likely have to sell the land which he has not already disposed of. If he has sold to you before him being declared "illegal", you would be declared having purchased "in good faith". Thus you would maintain ownership.

If under some totally insane Judgement (there have been a couple over here, but not as many as people think ) the contract is voidable then you would have to go through Civil Court to get your money back. Extremely rare due to"in good faith", and the law allows for innocent parties not to suffer financial penalties. There have been judgements where assets must be sold in illegal Companies, and also fines (don't know of any prison sentences yet). But I do not know of a case where contracts have been deemed voidable. When you think of it logically to follow "the letter of the law" where there is an illegal Company, everyone who ever purchased goods would have void contracts, hence the blink.

Dragonman,

Many thanks. Most helpful. I have a supplementary question. What in your opinion is going to happen to all those who have bought property using a company with "nominee shareholders"?

Am I correct in thinking that to make an "illegal"company "legal" you would have to find genuine Thai shareholders which would mean surrendering 51% of the equity in your property. Hardly an enticing proposition. Or, is it more likely that Thai purchasers will benefit from a massive "farang firesale".

A fudged solution will not solve anything as everyone should now be aware of the problem of using "nominees". In other words, the market in the places where foreigners buy will just stagnate.

Regards,

Medina

Medina

The voidable contract would be the original purchase you made from the Developer. In other words the land would go back to the Developer, you'd get your money back, and then he would have to sell it within 1 year .This is why the law allows for "in good faith", so that any innocent party does not lose from an illegal act. In fact the Developer would receive a large fine or a prison sentence and you would go on as normal, unless you coluded.

Morning Dragonman,

Thank you. Does "blink" suggest the developer probably wouldn't have to sell the land? But what happens if I have built a house on the plot? Will the developer have to refund the cost of this as well? And, what is the situation if the developer has not got the financial means to buy back the land and/or building? Do you know of any situations where what you describe, has happened? Lots

of questions! Look forward to learning more.

Regards,

Medina

This is certainly interesting times in the property market, particularly for foreign developers who have sub-divided and 'sold' house and land to fellow farangs using the 'nominee' route. It is very feasible that every developer is to be investigated under the enforcement of current Thai law and it is questionable where they will draw a line in the sand under their investigations. The new government have to do something about Foreign land 'ownership' or the entire Kingdom is heading for a massive economic crash. Time will tell and you are doing the right thing putting any plans on ice.

Just my opinion

watchoutfarang

Thanks Watchout. It strikes me that the Thai property market is now in uncharted territory. I live in Spain where the construction industry forms a very significant part of the economy. We have more than our share of dodgy agents, lawyers and developers but at least there is no bar on owning a freehold. It will be very interesting to see how the Thais react to the problems that have been created by the use of "nominee" structures by both developers and buyers. A "head in the sand" solution will just make matters worse. Like a good Martini, my plans are firmly on ice!

Cheers,

Medina

Hi everyone,

I have a technical question for the legal beagles on TV.

A)Imagine that a "foreign"controlled Thai company purchases land and then subdivides it into smaller plots for resale. A purchaser acquires one of these plots "legally", ie as a Thai national or using a properly constituted and genuine Thai company.

B)The Thai authorities decide to investigate the original land purchase and the developer is found to have violated Thai land ownership laws.

What is the legal situation of the people who bought plots from the developer?

I should add that I have been preparing a business plan to develop a quality tourist facility in Thailand but due to the problems of land ownership, political uncertainty and excellent advice I have received from contributors to TV, I have put my plans on ice.

Look forward to hearing your views.

Regards,

Medina

Technically the contract would be void or at least voidable. But "in good faith" would be a reasonable defence. It is unlikely that the Judge would allow "unjust enrichment" to the developer which is likely if the contract was void. As these violations from case law normally involve fines or imprisonment but frequently do not involve assets. In fact the judgement purely says the land has to be sold.

Hi Dragonman,

Thanks for your reply. I'm still not clear on this. Which contract would be voided? Can the Thai authorities force an owner who has purchased a plot of land "legally" to sell the plot because the

original land purchase by the developer was done using a "foreign"controlled company?

The follow on to this particular question is what is going to happen to the very large number of people who have bought property using "nominee" shareholders? If the Thais say they have to sell the properties many people are going to find themselves in a fire-sale situation.

Alternatively, if the Thais say that you have to make your company legal, where are all the genuine Thai shareholders going to come from and how are foreign owners caught in this situation going to react to losing 51% of their equity in a property?

The expression "can of worms" comes to mind. All of this suggests that the Thai propery market in the principal areas where foreigners buy, apart from legitimate condo purchases, is going to go through a very sticky patch.

Regards,

Medina

Hi everyone,

I have a technical question for the legal beagles on TV.

A)Imagine that a "foreign"controlled Thai company purchases land and then subdivides it into smaller plots for resale. A purchaser acquires one of these plots "legally", ie as a Thai national or using a properly constituted and genuine Thai company.

B)The Thai authorities decide to investigate the original land purchase and the developer is found to have violated Thai land ownership laws.

What is the legal situation of the people who bought plots from the developer?

I should add that I have been preparing a business plan to develop a quality tourist facility in Thailand but due to the problems of land ownership, political uncertainty and excellent advice I have received from contributors to TV, I have put my plans on ice.

Look forward to hearing your views.

Regards,

Medina

"ceiling fan works for me"

10 minutes under a ceiling fan and i catch a bronchitis and cough a few weeks if i don't take immediately hard antibiotics. i don't have a thai wife but mine loves the ceiling fan on turbo-speed AND aircondition. when i explain to her that this is energy wise nonsense i get for an answer "BUT I LIKE IT LIKE THAT. LEAVE MY ROOM."

it's not really the lower temperature i enjoy with aircondition but the lower humidity. lived and worked in Saudi Arabia, Kuwait and West Africa with much higher temperatures than Pattaya and did not suffer. but then i was 20-25 years younger. old age takes it's toll.

Dr Naam,

Interesting what you say about ceiling fans. I live in Spain. I don't have A/C because I hate it but do have ceiling fans. Last summer I was sleeping with the bedroom fan on and developed a horrible throaty infection. I guess it must be the downdraught.

Cheers,

James

Hi Everyone,

Am relatively new here and doing lots of due diligence! Do these new Visa Rules mean that as from 1 October 2006 no NEW Investment Visas will be issued? In other words, this category will cease to exist except for people holding IV's prior to 1 October. I had read on previous threads that the minimum amount would probably be increased to 10 mil Bht.

Regards,

James

All channels are blocked with music.......

Something is happening.

CNN in the USA is saying Thaksin is no where to be seen at the United Nations this morning. He was supposed to be seated at the Thai desk with the leaders of other nations.

Hola from Spain. Have been trying to open up the website for The Nation and the Bangkok Post but without success. Guess they have pulled the plug on them.

Medina