Irene

Donx. Thanks!!

I hope more people will know the advantages and risks and tell other people. I noticed talking to people that many at least have a friend or family member living in Thailand or at least visiting often.

Maybe a flyer at the airport could help, or a small brochure with other aspects about Thailand.

I am seriously thinking about that, but my writing skills are not that good.

There would be a long list and it would not be a small brochure but more likely a thick book like Tolstoy's War and Peace. It could start with the touts at the airport.

Khun Jean,

Your concern is mighty noble. However, in my book, my definition of an investor covers wider category of people. It includes anybody who parts his fund from a bank to stocks, property, mutual fund or commodities. Whether he is an educated one or uneducated one, that is not relevant since he is still an investor. I can now see that you are more concerned with the uneducated one.

So, your warning is to those uneducated investors that,

"Fellow,

Don't trust all these adverts of 60 year lease or 90 year lease! Because, the best situation is only a 30-year lease and you have to get the lease registered with the authority otherwise you have a legal period of only 3 years. As to the promise of a renewal period of another 30 years (plus further 30 years), don't take that as certain and can be defrauded by the lessors or developers. Check with your lawyers for any protection, if any."

If a practice is not right it should stop, even if there are no good alternatives.

Again my concern is for the private person. Shall i name a few areas where this scam is used.

Phuket, Samui, Hua hin, Pattaya, Bangkok etc..

I can name and shame at least 50 developers and realestate agents with false statements on their websites and using contracts that are not worth the paper written on it.

Irene and Abrak give samples about people/companies that KNOW the law about renewals. Good for them, they go in knowing the risks.

It is the normal people without knowledge of the thai law that believe these developers and brokers.

Those are the people that should be made aware.

I meet many people, many retiress and couples, and a lot of them have dodgy contracts and certainly not with reputable listed companies or the CPB, so i know it is happening a lot.

Again this should STOP!

I can now see your points. But I wonder whether those investors in Phuket, Samui, Hua Hin, Pataya and even Bangkok ever consulted their lawyers prior to entering into the lease contract. Second, whether their first 30 years also subject to challenge of possession.

Am I right to say that at least they have the unencumbranced right of possession for at least 30 years? If they have that rights, they may still think the prices are still cheap (comparing with what they are used to in their own countries) and therefore could not care less about losing of renewal rights. Those investors in Samui and Phuket are mostly high flyers with worldwide contacts and it would be unusual for them not to understand what they have entered into.

My observations are in bold type:

Thank you for confirming that a renewal is not guranteed. Even international laywers agree on that. Yes, you are correct, definitely not a guarantee, but you can take a lessor to court for breach of contract, if the lessor is of substance. So the benefit of the renewal is based on the substance of the lessor. It is not definitely that the renewal clause is of a zero benefit. Currently, there are a few property funds that are listed on the Stock Exchange and based on a period of lease with a renewal clause. Are they scam?

So what you are saying is you got a 30+30 lease paid everything upfront and even a part of the second term knowing that there is no guarantee that it can be extended, can not be registered and relying on good faith.Well that just says it all. Better to be overly simplistic i think. There is no guarantee of the extension but merely as a contractual promise of a renewal. If it is the Crown Property or a company of a reliable stature, it can be more than good faith.

I think your multi million dollar company is only counting on the first 30 years, and HOPING it can extend it later.

The only good think is that the company did it KNOWINGLY! If you are a finance man, you don't count the value of the renewal period unless the lessor is of substance and the terms and conditions are definitely spelt out right from Day One.

Crown property Bureau is credible so i give you that, but how many people who want land & house lease from the CPB? There are thousands of households who have their leases with the CPB. If the area is not of commercial value, most tenants practically live there for life.

And AGAIN, i am talking about private persons who want to live in Thailand. NOT about a multi million US$ company that leases with knowing it can not be guaranteed and rely on faith. pfff... Definitely, avoid leasing if you can buy at a price acceptable to you. Furthermore, the resale value of a lease is terrible unless you have got a lease right at the Sunday market or at Mah Boonkrong for your trade.

The forewarnings are good for any prospective property purchaser but don't overdo it by calling it as a scam when there are exceptions that leasing is necessary.

I think you need some modifications before pinning the statement. It is too generalised since there are exceptions to the rules.

I entered into two leasehold contracts for 30 years plus an option of another 30 years (the conditions are at the pleasure of the lessors). I have been having full benefits for the rental income for the two properties which are in Rajprasong and Rajdamri area.The lessors are Crown Property and one leading Thai family. I went in with full assurance of the 30 year benefits which has turned out to be most profitable for one and another not so great. Before the purchase, I knew full well that the option of 30 years would be at the mercy of the lessors. But that option has never come into my calculation for a decision-making of to lease or not to lease. My calculation was based on the cast iron benefits of the first 30 years that could accrue to me. However, if the lessors turn out to be kind on the option date, (which is unlikely), then I could have a windfall.

I have no desire to defend the concept of the lease. At the same time, I dislike generalised statements that could mislead readers unduly especially when one prejudges the case that in all circumstances it is unfavourable. I just give out the facts of my experiences and up to each reader's matured judgment.

On the whole, I like this thread's list of the negatives on leasing but just like to open the window a bit to know of the exceptions.

Intelligent question! Because almost all of them are polite and humble in dealing with others. Hardly, you can find an abrasive individual. They are fair-minded and prepared to accept your explanations.

I would consider myself polite, unabrasive and fair-minded. I usually get on very well with Japanese people and would resent being put in a box marked "farang" along with some some of the drunken buffoons you find in Pattaya. If they wanted to interview potential tenants to make sure they would be suitable then that would be no problem but I can't see a justification for blanket racial exclusion. Having said that I have no interest at all in singing songs with people who can't sing, giving tips to ladies with unrealistically high opinions of themselves and Japanese food is too salty for my tastes so I'm not really missing out on much.

Tuky, to make sweeping racial generalisations as you have done is indeed racism. This isn't the west where everyone panics and gets fearful and defensive at the mere mention of the word racism but to say farangs are one way and Japanese are another is indeed racism. Whether anyone should care if it's racism or not is another matter.

edwardandtub,

Thank you! Well said! You are one of the majority Westerners who are less vocal in Thailand but real nice and fair to fellowmen. If you want to see how good the westerners are, try to recall of the sympathy Thailand received in kind and words during the traumatic experience during the days of Tsunami that struck Phuket and Khao Luk. That was true Christianity.

Apparently, the owners of these apartments and/or bars prefer Japanese customers. Maybe we should consider why that would be the case... (perhaps they have more money or more likely, more willing to part with it).

Intelligent question! Because almost all of them are polite and humble in dealing with others. Hardly, you can find an abrasive individual. They are fair-minded and prepared to accept your explanations.

Good point! I have also been concerned with the EIA requirement but feel partly relaxed since the developers have to find ways and means of meeting the EIA rules in order to get my 70% final payments. My risk is with my 30% payments. Because the developer has a higher stake, so I feel not too bad. Furthermore, the end result is with higher costs for the developers for more greenery which will benefit buyers in the end.

Folks,

Thank you for all the input. Now I have a few nice alternatives in staying in Hua Hin. It has been most useful. This time, I have decided for Hyatt, just to impress on our visitors. I would have preferred Sofitel but unfortunately they are all booked up up to March.

I just put down a deposit on a condo and have a question. Most of the building looks to be sold on Leasehold. I have purchased a condo as Freehold. Is it possible to have both in the same buiding? If so, what happens after 30 years when most people's lease are up? I would appreciate to hear back from anyone who knows if this is possible. If not, I will need to talk to a lawyer.

Thanks

You can buy condos as freehold or leasehold. Most investors have bought as Leasehold - i have gone the freehold route. I spoke with the owner developer and he said both can co-exist in the same project but I wanted a second opinion. I will speak with a trusted lawyer and ask him to confirm. Thanks for the replies.

**************************************************

This is really a mystery. Thais dislike leasehold, so no market for the Thais. While foreigners can buy freehold, so why bother to buy leasehold. There could be a big price differentiations. Is the location in a prime area like Rajprasong or Rajdamri? I cannot understand why any developers would market their products with such differentiation. Normally, they like to build and sell and say goodbye to you and move on to a new project with fresh cash fund.

There are so many favourable factors appeared within one day, not only Thai political direction towards respectability. The following are the factors that coincide nicely with the local factor:

First, Baht is stronger and likely to be even stronger because of flooring of US interest rate. Therefore, foreigners are likely to come in more for double dips of exchange gain and capital gain.

Second, foreign portion has already exhausted in selling their stocks in hand. Net buying by foreigners reached 8.2 billion while local institutions and retails sold that net sum.

Third, CNBC survey and many started to opine that the likelihood of US recession is now less than 50% chance.

Fourth,volume trading amounted to 40 billion plus which strengthens the belief that the buying may be real.

Fifth, the US bad news on the write downs appear to be exhausted.

Sixth, it appears inevitable that the US government has to help to protect too deep a fall for the sake of coming election.

In conclusion, since the beginning of subprime crisis in August 07, I have never seen things to come in so nicely like the last two days. Did I put my money where my mouth is? Yes, plenty.

What are my fears?

The lining up of the Thailand cabinet minister is so nameless to disturb the confidence of the investors.

Second, my assessment of the US economy is far off mark and the recession truly creeps in.

Third, today's investment from foreigners was only a blip and it won't be followed through.

I may have missed other factors that could have caused the deep dip. I love to read the thoughts of others.

It is easy to buy a condo - all I have to do is bring the full amount in from overseas - that I know.

What about selling the condo again ? Once sold, how to get the money back out of Thailand again? what about any increase in the value?

Sample

Bought condo for 3. mil THB

Selling condo at 5. mil THB

Any tax ?

Problem sending the money out from Thailand ?

How to handle a sale from outside Thailand

WHAT TO DO ?

I have arranged for sale proceeds to be remitted out for a friend of ours with evidences of Exchange Control Form when he first brought in the fund to buy in earliers years and receipts of the taxes and duty paid. His tax on the proceeds (including his capital gain) was taxed as follow:

Transfer fees at 2% (but agreed with the buyer to bear one half),

Stamp duty at 0.5% of the proceeds (borne by him),

Specific Business Tax at 3.3% (but exempted since he has held the property for five years and over),

Withholding income tax is calculated on an assumed gain. The assumed gain is calculated by having the proceeds being reduced by a percentage of deductions (depending on the number of years ownership). The percentages range from 50% to 92%. The net sum will then be divided by the number of years of holding, i.e. annualised the sum. The annualised sum will then be computed based on tax rates of 5% to 37%. The result shall then be multiplied by the number of years. That sum shall then be payable. Because of annualising method, the amount is normally not prohibitive.

I had no problem in having the fund remitted out.

To handle a sale from outside Thailand can be carried out through a reliable estate agent in Thailand but do stick to an international agent like CBRichard Ellis.

Irene I have one more question.

Would I take that letter to the land company at the time the chanote is put in my name and will they document this and keep a copy of the letter.

Or is simply for my protection should anything differ from what is said to me

thaitot,

Pursuant to the law, the Land Department has to have this letter as evidence of clearance of debts of past owners before the official can transfer the name in the chanote to you. They will keep the letter. (You may photocopy this letter for your own record, if you like). The idea is to ensure all the co-owners to pay their dues to the juristic body of the condominium before they can transfer their obligations of paying maintenance fees to another party. Your obligation of paying the dues to the juristic body will begin on the day of your ownership.

Beentheredonethat Thanks for the reply.

Will I will only need to go to the land office Beside going to the condo management and checking for dues in arrears?

Is the land office where they will tell me if any money is owed against the chanote and all paperwork in handled.

Am I correct on this.

Thanks again

No, you need to get a letter from the management of the condo stating that that unit is clear of any debt owed to the juristic body. You have to start to ask the condo office to prepare this letter.

To a Thai, with allowance of 90-year lease, his land will be more marketable with more demand and resulting in higher value. There will be a big boom in Phuket and Samui where the demand has been suppressed by the 15-month threat of Foreign Business Law.

My comments are in bold type:

Am looking at buying a Condo in Pattaya under a 30 year lease type agreement. Is this normal practice?No, it is not normal to acquire a condo under a 30 year lease type agreement. The normal route is freehold. However, in a prime area like Rajdamri/Rajprasong in Bangkok, a 30 year lease is common. But I am unaware of Pataya area where a 30 year lease is warranted. As a caveat, Thais dislike leasing immensely. So when you want to sell, you may have to rely on the expat demand.

I understand this eliminates the need for the Thai ownership requirement. That is correct. As a lessee, a non-Thai is not restricted to ownership of this lease right.

Do I need a lawyer for this type of arrangement? Because it is a non-routine transaction for condo ownership, a lawyer to guide you is recommended. One thing for certain is that the lease has to be registered with the authority to validate the 30 year period, otherwise it would have a validity period of 3 years.

If I got a lawyer what would be a realistic price for his services on about a 40m2 studio.Baht20,000-30,000 range.

Thanks

John

Sheryl,

That was good posting. I never thought of scouting for a right doctor before. Have always been at the mercy of receptionists and nurses. Thanks a lot!

It appears a French bank caused the market disruptions this week:

PARIS/LONDON, Jan 25 (Reuters) - French bank Societe Generale (SocGen) conducted a dramatic market sell-off operation in 48 hours after discovering a massive alleged fraud at the bank, traders and fund managers said on Friday.

Sources close to French banks said SocGen had been nursing losses of 1-1.2 billion euros when it discovered the fraud on Friday. It subsequently unwound more than a million Eurostoxx stock index futures contracts from Jan. 21 to 22, bringing the hit to 4.9 billion euros ($7.2 billion) by Thursday.

Estimates for the value of the dumped contracts ranged from 20 billion to 70 billion euros ($29-$103 billion).

"What's emerging is that SocGen was brutal in the way it unwound its positions," said a trader at an investment bank. .....

No doubt at all that this week's disruption was part of the work of SocGen in closing the future contracts with a loss of 7 billion dollars. The question is now posed in Herald Tribune that whether the US Fed was duped in reducing the interest rate by 75 points when the market was then distorted by SocGen's actions. I don't blame SocGen for closing the contracts committed by Jerome Kerviel before the public announcement on Thursday thereby closing the painful chapter of this colossal misdeed of a rogue trader. But it is interesting to note that the revealed fraud may prove to be beneficial in calming the market a little bit by the Fed's early action before Jan 29. The whole question now is whether the reduction on Jan 29 will be 50 basis points as many have expected and hope for.

My comments are in red:

One good thing about the US is the rule on moral hazards. They never believe in helping out the wrongdoers.

Are you being ironic here? Cutting interest rates to bail out banks who made bad loans and keep crappy asset values high long enough to dump it to someone else. Punishing savers who live within their means while rescuing lenders who loan to high risk persons. Giving handouts to taxpayers in excess of tax receipts. No moral hazard? It reeks.

In my book, cutting interest rates was not specifically to bail out banks who made bad loans. I agree. It was specifically done to keep hedge funds and mutual funds from having to make forced liquidations in a plunging stock market that was repricing the cost of risk. Now, I can see your point on the help to the hedge funds and mutual funds. But that help is also of benefits to the US population and world economy.They will still be in a jam even after the bail out. Their crappy asset values were already written down heftily to the extent that you need Asian and Middle East money to salvage them. (It is a reverse from 1997 when the US institutions came to Asia to pick up cheap assets).

Savers who live within their means are not affected. On the contrary, they are in a better position to buy cheap assets because they are cash rich. Savings is savings. It is not intended for picking up cheap assets. My 79 year old father is not buying the dip in Google or flipping condos. He lives on the return his savings provides. He is not a speculator, nor should he be. Point taken. But with the change of scenario of pricing especially in the property area, for many savers, they now have a chance to consider shifting some of their savings with the same degree of risk. For certain, fixed income instruments would not be so attractive because of downward trend of interest rates.

Giving handouts to taxpayers was given universally to all and not to a specific group of wrongdoers. No moral hazard.

I have overseas visitors coming to Thailand. We are hoping of visiting Hua Hin for a few days. Sofitel seems to be well booked for February. We are hoping of picking the one similar to Sofitel next to the beach. We would appreciate some recommendations.

Savers who live within their means are not affected. On the contrary, they are in a better position to buy cheap assets because they are cash rich.

Giving handouts to taxpayers was given universally to all and not to a specific group of wrongdoers. No moral hazard.

What crap.. Think deeper..

Savers have money.. By flooding new money into the system with low interest rates you feed inflation.. Inflation degrades the savers assets making them poorer.. Inflation is a form of stealth tax on savings and the government are racking it higher by producing more money hence lowering its value.

Second what the government are doing is rewarding speculators who made bad bets. They are essentially taking taxes from the frugal population and using it to bail out (by lowering interest rates) people who gambled and should have lost. Its morally backwards. Many people took out liar loans, took on board more credit than they could afford, at historically way out there low rates of interest gambling that the prices would rise and they would make a killing.. Why should the frugal and sensible pay the price to save these people ?? If groups of people go into the casino and gamble on something why should those that are risk averse pay to cover thier losses ??

Wow, what a confused mind. My thought may be crappy but at least I am polite.

What's wrong with helping the US economy from sliding down to recession? From past experiences, once you are there, it takes time to recover. The idea is to pump up consumers spending. All the financial institutions like Citi, Bear Stern, suffered their losses on bad lendings and had to charge those losses against their earnings. The persons who suffered from their misdeeds are their shareholders like myself. Many heads were chopped off. One good thing about the US is the rule on moral hazards. They never believe in helping out the wrongdoers.

The very fact that the US Federal government is returning $145 billion dollars to taxpayers - about 4 months from now - means that there are underlying and comprehensive problems in the US economy.

As for consumption spending, it now accounts for over 70% of the US economy. Government solution: just go out and buy more stuff.

I don't think anyone really know how bad it will bet, or if it will get worse.

Again, the very fact there printing these checks out and mailing them to taxpayers means things are seriously, wrong.

I don't think this is a normal cyclical recession (if we are even in one). Since 1945, there have been 10 recessions, which average from 8 to 16 months in length.

There is no doubt at all that the US economy is in a jam due to the credit crunch precipitated by greed and bad management of the US financial institutions and housing sector. They were worse than the misdeeds as previously committed by the Asian world pre-1997.

It can only resolve through confidence of consumers and the financial institutions come back to the fold after taking all the losses on their earnings.

One good thing about the US is the rule on moral hazards. They never believe in helping out the wrongdoers.

Are you being ironic here? Cutting interest rates to bail out banks who made bad loans and keep crappy asset values high long enough to dump it to someone else. Punishing savers who live within their means while rescuing lenders who loan to high risk persons. Giving handouts to taxpayers in excess of tax receipts. No moral hazard? It reeks.

In my book, cutting interest rates was not specifically to bail out banks who made bad loans. They will still be in a jam even after the bail out. Their crappy asset values were already written down heftily to the extent that you need Asian and Middle East money to salvage them. (It is a reverse from 1997 when the US institutions came to Asia to pick up cheap assets).

Savers who live within their means are not affected. On the contrary, they are in a better position to buy cheap assets because they are cash rich.

Giving handouts to taxpayers was given universally to all and not to a specific group of wrongdoers. No moral hazard.

What's wrong with helping the US economy from sliding down to recession? From past experiences, once you are there, it takes time to recover. The idea is to pump up consumers spending. All the financial institutions like Citi, Bear Stern, suffered their losses on bad lendings and had to charge those losses against their earnings. The persons who suffered from their misdeeds are their shareholders like myself. Many heads were chopped off. One good thing about the US is the rule on moral hazards. They never believe in helping out the wrongdoers.

Irene, of course the doctor should know everything about what he is prescribing but farangs living in Thailand (and many other countries) have to try to educate thenselves. Pharmacists should also give information to the patient on the medicines they hand over to the patient. I always make a point of asking pharmacists for the contra-indications and side effects. They know diddleysqat. So when I get home I read up on the internet and decide what to take and what to flush down the toilet. At the moment I am taking a drug that on some internet sites is described as "the drug from hel_l' and the doctor had prescribed to the equivalent of 40 mgs of Valium! Immediately on reading that I cut the tablets into smallest possible pieces and took only one little piece - I absolutely did not need the eqivalent of 40 mgs of Valium! Next time I saw the doctor I told him what I was taking and he was completely unfazzed and gave me 1/2 mg tablets which are bigger and so much easier to cut into tiny pieces! I am now in the process of weaning myself off this medication - without the doctor telling me to. Let's hope I can do it without side effects.

Tammi, yes, you have a good point. Doctors are normally pressed for time and I sometimes doubt whether they have updated themselves as much as some patients. Furthermore when you raise some questions from what you have read with them, they tend to get annoyed. Patients are in no-win situation. My tactic is to be nice to all of them and buy them Xmas gifts etc. Once they become accustomed to you, they could become your family doctors and know all your family DNA. Presently, I am able to involve them in long consultation more than other patients to the disliking of nurses. Some of the doctors even asked me for a few tips on the stock market. Now I have to buy some sweets for the nurses just to complete my system. Knowing lawyers and doctors well is a must in Thailand.

In one highly recommended book called, "How Doctors Think" by Jerome Groopman, M.D., it was noted at the side cover that "On average, a physician will interrupt a patient describing her symptoms within eighteen seconds. In that short time, many doctors decide on the likely diagnosis and best treatment......"