Buy Apartment

[MeAtPhuket]

Maybe some of you can help me out here.

I am planning to buy a apartment in Bangkok and have found my dream apartment. The apartment is priced to 11 000 000 Baht and I cannot own it as freehold under condominium act. Instead the seller is offering me a long lease on the apartment of a total of 90 years. The whole setup is like a land lease but this is done for apartments. I have been trying to find information regarding long lease but I cannot find it. Maybe some of you guys know more about this??

John

[HowardJohnson]

As far as I am aware you cannot get a guaranteed 90 year lease. It is a 30+30+30 year lease, meaning that it can only be done 30 years at a time and there is no guarantee that at the end of 30 years they will offer the next 30.

Also, when you come to sell it, you cannot offer a new 30 year lease to the next buyer. It will be for the remainder of the 30 years (ie: If you have been there for 5 years, you will only be able to offer 25 years to the next buyer.)

There are many people who buy houses and land this way. Make sure you have a good lawyer and there are no caveats that leave you exposed.

[MeAtPhuket]

As far as I am aware you cannot get a guaranteed 90 year lease. It is a 30+30+30 year lease, meaning that it can only be done 30 years at a time and there is no guarantee that at the end of 30 years they will offer the next 30.

Also, when you come to sell it, you cannot offer a new 30 year lease to the next buyer. It will be for the remainder of the 30 years (ie: If you have been there for 5 years, you will only be able to offer 25 years to the next buyer.)

There are many people who buy houses and land this way. Make sure you have a good lawyer and there are no caveats that leave you exposed.

Correct but the rent is prepaid for 90 years and registered by land office. Lawers have looked on it and say it is safe way of doing it, but I am not sure what to think

John

[cclub75]

Run. Far away.

A lease of 90 years... doesn't exist. It's 30 years max. Some people argue that "2 extensions of 30 years" can be negociated... Real estates companies and lawyers. The same people who were selling the scheme : "you-can-buy-land-through-a-company-no-problem". etc.

The 3x30 years lease is a "no man's land" from a juridic point of view.

What could happen in case of succession (death) ? Way too many questions, unanswered.

Bottom line : it's already difficult in Thailand when you deal within a proper juridic frame. So imagine, what it could be, if you overstrech this frame...

3x30 years could work. But it's not sure. Basically because nobody -yet- went in front of a judge with such a scheme. A thai judge could say : "it's illegal". Then what would you do with your papers ? Crying would be an option...

Who is the "seller" ? An individual or a company ?

Are you sure that a freehold is not available ? Did you check ?

The freehold, within the frame of the Condominium Act gives you a security. A clear one. Stick to it.

Don't trust the "seller". Take 2 lawyers. In competition. Cross check what they tell you.

I should add that this issue could be a good way to reduce the price. 11 millions for freehold. Less of course with a long lease.

It's impossible to argue that freehold = "90 years lease".

Maybe some of you can help me out here.

I am planning to buy a apartment in Bangkok and have found my dream apartment. The apartment is priced to 11 000 000 Baht and I cannot own it as freehold under condominium act. Instead the seller is offering me a long lease on the apartment of a total of 90 years. The whole setup is like a land lease but this is done for apartments. I have been trying to find information regarding long lease but I cannot find it. Maybe some of you guys know more about this??

John

Edited February 19, 2007 by cclub75

[MeAtPhuket]

Ok, I am running

It will not be 90 years it will be 3 * 30 but prepaid 30 years rent. So in all 3 contracts for the rental of 30 years times 3 and all 30 year periods paid in advanced.

Can you recommend a good law firm in Bangkok, with a website?

[quiksilva]

Please clarify, is my understanding of the deal offered to you correct?

term 1 = 0-30 years (prepaid)

term 2 = 30-60 years (also prepaid?)

term 3 = 60-90 years (also prepaid?)

If so, beware. Only pay the first term in advance, its the only enforecable lease term there is.

Consider your exit strategy also, if you wish to sell at some point in the future how will prospective buyers value an unenforceable future lease term? What guarantees can you offer a buyer that the lease can be assigned to them and that it will still be good in 30 years time?

Also how has the landlord valued the future unenforceable terms? Have they provided calculations? If so, what discount rates have they applied to compute the values of this leasehold interest?

Are there any other, **ehem**, 'mechanisms' at play here?

If so, are you comfortable with them, make sure to get them checked out by a reputable independant lawyer, or two.

As for advice on lawyers search the forums and you will find what you seek