Leasing land on which to build a home

[Cabradelmar]

I doubt this is a new question... background: my Thai wife owns 1 rai of land on which we would like to build a home. I am a foreigner living here on a retirement visa. 

 

My preference is to lease the land from my wife and to build the home (in both our names). My thinking is that should either of us die, neither of us would be at risk of being throw out of the home or off the land. My wife assures me that would never happen, but nevertheless. I am a bit older, and her family (parents and/or children) would certainly inherit any real property she leaves behind.

 

Has anyone come across this situation, and do you have any suggestion for how it should be handled?

 

1. In terms of protecting both parties (husband and wife) in the event of a  future life event (divorce or death), and

2. In terms of the delicate topic of being perceived as untrusting

[phantomfiddler]

Forget about the "delicate topic" and protect yourself at all times, and remember(or be hereby advised) that any lease over 3 years, to be of any value, must be registered on the back of the "Chanote" at the Land Office.

In a country where the failure rate approaches 99% one cannot leave anything to chance. Do everything through a respectable lawyer.

[BritManToo]

Buy one of those wooden houses on stilts, they can be stripped down and moved in a day.

Very traditional too.

Edited June 13, 2018 by BritManToo

[Peasandmash]

consider these truths:

#1. no thing lasts forever (this includes you).

#2. if you can't afford to lose the money, then don't gamble with it.

#3. when everything seems hopeless, refer to rule #1.

[GOLDBUGGY]

A "Usufruct" is probably your best way to go here. This can be set up cheaply by a Lawyer and then it is registered at the Land Office and attached to the Land Title. I have one and I am very satisfied with this. 

 

A Usufruct will give you full use of this land to do as you please for as long as you live. So building a house on it is no problem. No matter what happens in the future nobody can legally kick you off of this land or out of the house. This Usufruct Contract can only be broken if both you and your wife (the Land Owner) agree to break it, or you die. 

 

Technically it is possible for the Land Owner (in this case your wife) to sell this land. But this does not effect your Usufruct, as whoever bought it would have to honor it. So highly unlikely anyone would want to buy it under these conditions. It think this is set up mostly for the Land Owner who may pass on before you. So in a case like that this land would change hands and go to the Heir, but in no way effecting your Usufruct. 

 

But a Usufruct also limits you as it only applies to you. You therefore cannot Will this Usufruct to another person in the event of your death. You can of course make a separate Will with your wife to cover this, but it will not be covered in the Usufruct.  

 

. 

[khunPer]

10 hours ago, Cabradelmar said:

Has anyone come across this situation, and do you have any suggestion for how it should be handled?

Check with superficies, which allow you to own a house, but not the land under the house. You can combine superficies with either a lease agreement or usufruct; however it's often mentioned that usufruct can be void, as contract between wife and hisband might be declared void in case of divorce. The bold links are for more information.

 

Superficies and usufruct agreements can run for either a period of time, up to 30-years, or for life; whilst a lease agreement can only run for a period of time only; minimum 3-years, and maximum 30-years.

?

[Cabradelmar]

Thank you all. Some great advice here. Rest assured I intend to protect myself #1. Hence , why a posted the question. Thanks again.

[cyberfarang]

15 minutes ago, Cabradelmar said:

Thank you all. Some great advice here. Rest assured I intend to protect myself #1. Hence , why a posted the question. Thanks again.

With who`s money was the land bought with?

 

By law it should be her money and if bought with your money means the land was purchased illegally, so leasing the land in your name won`t protect you if problems arise.

 

 

[Cabradelmar]

3 hours ago, cyberfarang said:

With who`s money was the land bought with?

 

By law it should be her money and if bought with your money means the land was purchased illegally, so leasing the land in your name won`t protect you if problems arise.

 

 

Her money. It was all her before I married her.

[GOLDBUGGY]

4 hours ago, Cabradelmar said:

Thank you all. Some great advice here. Rest assured I intend to protect myself #1. Hence , why a posted the question. Thanks again.

Please keep in mind that any agreement you make with your wife now, will become null and void during a Divorce. This does incude Usufucts, Leases Agreements, and also Superficies. So you can never really be 100% protected as long as you are married.

 

You may put this house in your name only, but since it will be purchased during your marriage the property becomes a 50/50 split on Divorce Day anyway. If you wife owned this land before you got married to her,  then it would legally still belong only to her after the Divorce.

 

It has been my experience that all Divorces are messy. So the surest way to protect oneself is just never get married. Divorces are also life changing experiences. You may not want to live on this land on in this house once you find yourself divorced from your present wife. 

 

So in reality there really is no agreement you can make with your wife to protect yourself, as any agreement you make with her while married becomes null and void during a Divorce. A Usufruct will protect you if the tragic event like your wife (The Land Owner) were to die before you. Or your wife if you were to die first as it automatically gets turned back to the Land Owner. But other than that be good to your wife and avoid divorce at all costs.  

[cyberfarang]

4 hours ago, Cabradelmar said:

Her money. It was all her before I married her.

Then no problem and you sound like a guy who really has his head screwed on properly, a rare gem on TV.

 

Usually in these cases they hire the services of a lawyer to draw up the rental contracts. That`s what I would do in your situation.

 

 

 

 

[Cabradelmar]

I'm sharing with the group advice I just received from a Law firm in Bangkok... below is verbatim from the lawyer. Frankly, it does not appear I have many options good to protect myself; other than to keep records I paid for the martial asset and ask my wife to put me in a will (she/we will need to create -- even that she can cancel by herself). Ugh!

 

The other options 1-2 below are simply not applicable to my circumstances. I'm not operating a legitimate business and we have no children together. 

 

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Please note that due to the recent rules and regulations of the land department, many land officers will not effect the registration of usufruct and/or superficies in the event that one of the parties is a non Thai national.

In addition, as you are aware under Section 1469 of the Thai Civil and Commercial Code:
 

Any agreement concluded between husband and wife during marriage may be avoided by either of them during marriage or within one year from the day of dissolution of marriage; provided that the rights of third persons acting in good faith are not affected thereby.

 

It means that even though the lease agreement, usufruct agreement or superficies agreement has been drafted, signed by you and your wife and registered at the land office, none of these will be best to protect your interest in this property as these agreements can be void/ cancelled/ terminated without any reasonable ground.

 

There are a few ways which may help protect your interest in this property as follows:

 

1. Using a company structure

 

A foreign national may take control of the land through a company structure (i.e. a Thai Limited Company). However, in this case, a non-Thai national can only hold a limited number of shares of the company i.e. 49% or less of the total shares of the company. In addition, there must be at least 3 shareholders in a Thai limited company, 2 of which must be Thai nationals in the event the company holds the title to the land.

 

Please bear in mind that if your intention is not to operate a legitimate business in Thailand, this option is far from ideal. If such a company does not continuously engage in a business, is not active and does not file its annual balance sheet and corporate income tax for a few contiguous years, it is likely that such a company will be stricken off from the register. The assets of the company will also have to be sold. In addition to the above difficulties, issues with shareholder structures, signatory authority, registered capital, shareholders' votes and work permits are all common problems. There will also be a lot of papers for you to sign and a lot of expenses to maintain the business. 

 

 

2. Putting the ownership of the property in you and your wife child/children's name

 

If you and your wife have a child or children together, and that such child/children hold(s) Thai citizenship with Thai ID card and household registration, your child/children is/are entitled to hold the ownership of the land and house in Thailand. However, he/she/they will not be able to purchase the Property from the land owner/ Seller directly; unless he/she/they is/are 20 years above. 

 

The only way that he/she/they can hold the ownership of the property in Thailand is to have his/her/their Thai mother buy the property from the seller and that the mother transfers the property to them as a gift.

 

However, please note that once the property ownership has been transferred to the child/children's name, the property cannot be sold or leased for more than 3 years, mortgaged, registered any encumbrance or distributed in whatsoever means; unless the child/children is/are 20 years old above or by Thai court order (which is not very usual).

 

3. Putting in your wife's name solely and that your wife makes the will for you (less protective)

 

Generally, as the house is acquired during the marriage, this house should be part of the marital property. In the case of divorce, this house should be split between husband and wife in equal share. I recommend you keep all proofs which show that you help her pay for the cost of construction partly or entirely.

 

Your wife may write a Thai will and give this land and house to you in the event of her death. However, as long as she survive, your wife can cancel/terminate the will by herself at any time.
 

Please note that we require 30,000 THB + 7% VAT on account prior to providing any further advice. A consultation fee at the rate of 6,000 THB + 7% VAT per hour will apply towards your credit on account. 

[Max11man]

Does anyone out there have experience with this form of dealing with Land Office ?    "Sale of a Building"    

I would like to know if it adds any stronger legal protection than Usufruct/Superficies, which as per section 1469 of Thai civil code, can be cancelled by my Thai wife in the event of divorce.

 

> in case of a foreigner buying real estate in Thailand ownership of a house can be registered and transferred separate from the land it stands on

>Sale and transfer of ownership of an existing building separate from the land requires the current owner and purchaser of the house to:

• sign a standard land office Thai script sale of a structure document, signed at the land office in front of the competent land official (this official document is used as proof of ownership of the house)

• followed by a 30 day public announcement/ posting of the house sale at specific locations

• after the announcement period the parties return to the land office to complete the transfer (the Thai script sale of a structure agreement will stamped and issued by the land office and can be used as proof of ownership of the building)

• property transfer taxes and fees must be paid (each party pays a share based on the agreement between the parties)

https://www.samuiforsale.com/knowledge/owning-a-house-in-thailand.html

http://library.siam-legal.com/thai-law/civil-and-commercial-code-marriage-section-1465-1493/

 

 

[ukrules]

On 6/18/2018 at 12:53 PM, Cabradelmar said:

Please note that due to the recent rules and regulations of the land department, many land officers will not effect the registration of usufruct and/or superficies in the event that one of the parties is a non Thai national.

 

I've read this before and it is alarming.

 

The law itself says you can register a usufruct but the land offices won't do it because for some reason they don't want to.

 

[Hummin]

Invest in Teak trees, and buy a condo far away from her family, and live happely as long you can. If you still married after 20, and or still alive, you have a small fortune!

[baansgr]

Where is the land located.  If it's In or near her village away from civilization the house will be worthless in any event.  Anything happens you wouldn't be welcome. If it isnt in a prosperous tourist area keep your money  in your pocket..... Jeez all these women getting houses built for them,  wish someone would build me one. 

[Cabradelmar]

On 10/10/2018 at 4:55 AM, ukrules said:

 

I've read this before and it is alarming.

 

The law itself says you can register a usufruct but the land offices won't do it because for some reason they don't want to.

 

That would appear to be the case. A BKK lawyer said it was almost impossible. While an Isaan lawyer said possible.

[ukrules]

On 10/11/2018 at 8:59 PM, Cabradelmar said:

That would appear to be the case. A BKK lawyer said it was almost impossible. While an Isaan lawyer said possible.

Does it really come down the the person on the day.

 

I wonder, has anybody sent the lawyers in when they've been told they can't do something they're specifically allowed to do under the current law? Literally have the person arrested for not doing their job. I would imagine that misrepresenting the law in an official capacity as a representative of the Thai government is a crime of some sort.

[Badb0y]

Let's wake this topic up, they always say during the divorce nothing protected.

Correct me if I'm wrong, for the divorce 2 people needed. So if she wants to divorce but I don't divorce will not happen right ? So it means everything will be the same.

[Cabradelmar]

On 10/31/2018 at 8:16 PM, Badb0y said:

Let's wake this topic up, they always say during the divorce nothing protected.

Correct me if I'm wrong, for the divorce 2 people needed. So if she wants to divorce but I don't divorce will not happen right ? So it means everything will be the same.

I'm not a lawyer... so you would be wise to seek one out for a legal opinion... But, If both people want a divorce, it would be uncontested. Easy. Can do in 1 day.

 

If only one wants and the other does not, or if there is dispute over how to split marital assets, it would be contested and would likely mean more legal/lawyer fees to get it done. I doubt that you could hold up the divorce indefinitely just by being stubborn. And if she has cause (you having an affair, etc.), then it is just a matter of time before a judge would grant the divorce being requested