Buying existing Thai ltd company which owns land/house freehold

[Fairynuff]

Never buy any property that doesn’t register YOU  as the sole owner. Going down the company route is skirting the law at best. If this precludes you from buying a house then so be it. Buy a condo....it’s yours.

[Neddiecgoon]

A mate who has been in Thailand 10 years and “owns” a number of properties has bought the land in his “wife’s” name then leased the house for a nominal rent contracted for 30 years. His safeguard being that if the relationship goes sour she can’t do anything without some negotiation with him. Lawyers thought it an excellent solution 

[camckz]

Thanks guys..

So the deeper this goes the more difficult it seems to be to make a choice at the end of this all.
Certainly there seems to be risks.
As so many people have commented, which Is most appreciated, I'm going to just throw a few key bits of additional information that may help with this debate and give a clearer picture on the scenario as there are a few different comments from a range of different people.

• no I'm not putting in my life savings and relying on income to survive
• the company is not running at a profit and books will be filed every year
• the home is 3 bedroom villa
• in regards to renting, it is more of a long term tennant, within expat community with the property being vacated when I'd like to visit with my family.
• I have no intention on marrying a Thai national and transferring it over to them.
• it will essentially be my holiday home
• Thai Share holders have been set up through law firm on the opening of the company.

Thoughts guys ?




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[DaRoadrunner]

15 minutes ago, camckz said:

Thai Share holders have been set up through law firm on the opening of the company.

Remember the words of Caligula. "Trust no one and thrust everyone." Except it may be the Thais doing the thrusting. Who are these share holders? Can you trust the lawyer? Is he part of a well known reputable firm? Thai lawyers are not like the ones you are used to back home.

[alacrity]

14 minutes ago, DaRoadrunner said:

Remember the words of Caligula. "Trust no one and thrust everyone." Except it may be the Thais doing the thrusting. Who are these share holders? Can you trust the lawyer? Is he part of a well known reputable firm? Thai lawyers are not like the ones you are used to back home.

Having read through the thread. This is the guy I would heed to.

At the very least you should get an independent lawyer to investigate the veracity of the shareholders that potentially would have a control over your investment as well as investigating the submitted annual tax returns for the period since registration. The dating of this original registration fits well with a period when many doubtful submissions were made.

There are just so many properties available that don't overly expose you to these potential risks. Bear in mind that a proven non-trading (holding) company registered with the purpose of circumventing land registration rules is illegal and assets can be seized without compensation along with a prosecution.

UP2U.

[DaRoadrunner]

To illustrate my point, here follows an example of one of the many things which can go pear shaped here.

 

A Farang I knew bought a condo, (not a house), thinking this was legal. He moves in and then finds the bank knocking on his door; they want the condo back!

 

Turns out the Thai builder who sold our Farang the property, had borrowed from the bank to construct it. Having sold all the units he then ran off with everyone's money. The Farang's lawyer had taken his money and not bothered to check the title deeds, which were in the hands of the bank.

 

So our Farang got stuffed by the Thai builder and his own lawyer! That's why I told you.... Get a reputable lawyer.

 

The bank as first line creditor had legal right to take the condo back.

 

Our Farang was left with an 8 million Baht loss and no condo. His options:- Sue his own lawyer and pay the police to find the builder. Amazing Thailand.

 

That was on a condo, and you want to buy a house, which we Farang are not supposed to own in the first place. It can be done, but be very wary, there are all sorts of scams going on.

 

[khunPer]

2 hours ago, camckz said:

• no I'm not putting in my life savings and relying on income to survive

The "never invest more in Thailand than you can afford to loose"..?
• the company is not running at a profit and books will be filed every year

Your company would be better of, and with less chance scrutiny, if running with a profit, and paying some company tax.
• the home is 3 bedroom villa
• in regards to renting, it is more of a long term tennant, within expat community with the property being vacated when I'd like to visit with my family.

You will be a renter, or having a long term lease up to 30-years from your own company – 3+ years for registration, and tax paid for full term – and you should pay rent/lease to the company.
• I have no intention on marrying a Thai national and transferring it over to them.
• it will essentially be my holiday home
• Thai Share holders have been set up through law firm on the opening of the company.

That the most scary part, you should not have nominees and/or unknown shareholders in "your" company.

A few comments in blue text above.

[Delight]

Houses /land are acquired via the company route .Potentially everyday

 

As many have claimed , this procedure is illegal.

I have lived in Thailand since 2005.

It was happening then and is still happening

Given this

Why is the action allowed to continue?
 

[buddhadug]

On 4/6/2019 at 2:33 AM, camckz said:

Thanks guys. These comments are most appreciated.. if I read between the lines it's kinda what I have been led to believe through my own research. It can be done, possible risks involved but as long as the company's legit and has no hidden dept all should be ok...yes it's not the right way to do it but it is done this way.
What are the key points to establish then before I proceed to make sure all is in order would you guys say... also what or who is DBD?
Would anyone here know of a reputable lawyer in the hua Hin area that speaks fluent English that may be able to help me once over... thanks again for your input guys any advice on this matter will be most appreciated.


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Just remember; "everyone else is doing it" is a losing defence. This is an exceptionally bad idea you have unless you enjoy being a sitting duck. 

[Fairynuff]

7 hours ago, Neddiecgoon said:

A mate who has been in Thailand 10 years and “owns” a number of properties has bought the land in his “wife’s” name then leased the house for a nominal rent contracted for 30 years. His safeguard being that if the relationship goes sour she can’t do anything without some negotiation with him. Lawyers thought it an excellent solution 

Oh well if the lawyers said it was ok it must be......yeah right!

[Fairynuff]

6 hours ago, camckz said:

Thanks guys..

So the deeper this goes the more difficult it seems to be to make a choice at the end of this all.
Certainly there seems to be risks.
As so many people have commented, which Is most appreciated, I'm going to just throw a few key bits of additional information that may help with this debate and give a clearer picture on the scenario as there are a few different comments from a range of different people.

• no I'm not putting in my life savings and relying on income to survive
• the company is not running at a profit and books will be filed every year
• the home is 3 bedroom villa
• in regards to renting, it is more of a long term tennant, within expat community with the property being vacated when I'd like to visit with my family.
• I have no intention on marrying a Thai national and transferring it over to them.
• it will essentially be my holiday home
• Thai Share holders have been set up through law firm on the opening of the company.

Thoughts guys ?




Sent from my iPhone using Thaivisa Connect

How do you know you can trust the law firm? I stand firm. Condo or nothing (for me). When I first considered buying a home here I went to a well known lawyer who promptly tried everything she could to make me buy a house rather than condo. Short story....that lawyer went to prison some time later for fraud in a nationally puplicised case

[MiNombreEsFicticious]

To the OP, you are almost certainly going to lose your entire investment, not to mention the legal fees you will surely encounter when you try (unsuccessfully, which is how it always goes) to stop the inevitable loss from occurring. I speak from experience as a former 49% shareholder of a Thai limited company. My business partner, someone I knew fairly well for 15+ years before the company was established, had the whole scam set up within the first few weeks of the company's existence. I worked for many years to build a profitable business, and then it all disappeared rather quickly. You will lose everything like I did. Don't do it. PM me if you wish. 

[emptypockets]

I'm curious who the long term farang renter would be.  I don't think I'd rent a house long term and being kicked out of it for two months every year. 

The only advice I have for the OP is to consider renting a place for the families 2 month holiday. Who knows after a couple of visits it may not be the place they want to holiday in future years. 

He may then face the problem of having to offload the company to the next sucker.  His friends friend must be ecstatic knowing he has a chance to get rid of a non profit making liability. 

[inThailand]

The reality here is lawyers or falang advisors are mostly not trustworthy and can not be held accountable to do as they say, so saying due dilegence and getting such is hit and miss. It used to be popular and easy to own property in a Thai company, those days are gone and the marketability of them has followed suit. I hope you getting a real bargain price for putting your feet into the alligator pit. You need to learn about company due dilegence and company structure your self, do not blindly trust others, or you will probably pay the piper. 

[baansgr]

10 hours ago, camckz said:

Thanks guys..

So the deeper this goes the more difficult it seems to be to make a choice at the end of this all.
Certainly there seems to be risks.
As so many people have commented, which Is most appreciated, I'm going to just throw a few key bits of additional information that may help with this debate and give a clearer picture on the scenario as there are a few different comments from a range of different people.

• no I'm not putting in my life savings and relying on income to survive
• the company is not running at a profit and books will be filed every year
• the home is 3 bedroom villa
• in regards to renting, it is more of a long term tennant, within expat community with the property being vacated when I'd like to visit with my family.
• I have no intention on marrying a Thai national and transferring it over to them.
• it will essentially be my holiday home
• Thai Share holders have been set up through law firm on the opening of the company.

Thoughts guys ?




Sent from my iPhone using Thaivisa Connect

Just rent a villa when you want to vacation....seems a lot of nonsense and risk for a holiday home....Ive lost millions through property here as have 100s thousands of others. Youve had the warnings but no doubt your mind is made up...3 bed pool villas rent for 20k upwards....20 years youve only spent a million, really dosnt make sense why you want to buy here.

 

 

 

 

[KittenKong]

11 hours ago, DaRoadrunner said:

Turns out the Thai builder who sold our Farang the property, had borrowed from the bank to construct it. Having sold all the units he then ran off with everyone's money. The Farang's lawyer had taken his money and not bothered to check the title deeds, which were in the hands of the bank.

 

So our Farang got stuffed by the Thai builder and his own lawyer! That's why I told you.... Get a reputable lawyer.

Worth pointing out that this can only happen with company name condo purchases. It can never happen with farang name condo purchases.

Hence the desirability of farang name ownership.

[Delight]

On 4/8/2019 at 7:57 AM, KittenKong said:

Worth pointing out that this can only happen with company name condo purchases. It can never happen with farang name condo purchases.

Hence the desirability of farang name ownership.

 The condo process starts with the completion of a building.

Let’s say every apartment is sold and all the owners move in. Then the developer will apply to the land office to convert the building to a condominium Juristic person i.e a legal condo.

At this stage every title deed is in the name of the developer.

The next stage is over time each apartment is then transferred to the owners  i.e people who have a contract with the developer and evidence of payments to the developer.

This happened in my case.

 

In the case outlined byDa Road runner ,the developer gave these title deeds to a bank as collateral for a loan . The developer  then did  a runner.

There is something wrong here.

Any judge ,in Thailand, will rule in favour of the owners.

The bank will lose.

 

 

For certain the bank cannot own the title deeds. They are in the name of the developer and need the permission of the JPM to transfer .This can happen if the JPM is bribed. Given that the developer has gone –then the bank will have to bribe the JPM. Unless of course the land office transferred all the title deeds to the bank. Unlikely given that the bank has no contract with the developer

In the Da Roadrunner’s example it is irrelevant if the contracts were in Thai,Farang or company names. Non of them had been transferred.

If the case outlined by Da Roadrunner actually occurred then no body who purchases a condo is safe.

[DaRoadrunner]

7 minutes ago, Delight said:

Any judge ,in Thailand, will rule in favour of the owners.

I think you will find that in this case the owners are the bank. By law, the bank is the first line creditor and can seize the property to recoup their loan. In Da Roadrunner's example, the buyer tried unsuccessfully to keep the property.

 

10 minutes ago, Delight said:

If the case outlined by Da Roadrunner actually occurred then no body who purchases a condo is safe. 

Nothing is safe or sure in this country. In this case the lawyer took his fee but failed to do his job. Common malpractice of Thai lawyers.

[Delight]

1 hour ago, DaRoadrunner said:

I think you will find that in this case the owners are the bank. By law, the bank is the first line creditor and can seize the property to recoup their loan. In Da Roadrunner's example, the buyer tried unsuccessfully to keep the property.

 

Nothing is safe or sure in this country. In this case the lawyer took his fee but failed to do his job. Common malpractice of Thai lawyers.

 Where your earlier statement makes no sense is that the developer deposited Title deeds with the bank -in order to obtain a loan- the loan being required  in order to complete the project.

Title deeds are not issued until the project is finished and the building achieves Condominium Juritic Person(CJP) status. You are  suggesting that an unfinshed building was awarded CJP status and as consequence  a Condo Title deeds issued

That would mean that the  Developer ,the Bank and the land office would have to conspire. Land office  personell would have to survey an un finished building and report that it was finished.

 

[DaRoadrunner]

The building was finished but the loan still outstanding. Loans often continue long after construction is completed.

[inThailand]

Condo titles deeds will not be issued if there is an outstanding encumbrance on the property. 

I highly doubt a bank would loan money on titles deeds that have been sold to someone else, ie no collateral. 

[Delight]

6 hours ago, inThailand said:

Condo titles deeds will not be issued if there is an outstanding encumbrance on the property. 

I highly doubt a bank would loan money on titles deeds that have been sold to someone else, ie no collateral. 

 I think that in the Da Roadrunner example the developer never applied to convert the building to CJP

He simply stole the money from the company that was set up to build the condo.Call that company 'BuildCondo Company'

The only official doument is the Chanote. That would be in the name of the 'BuildCondo Company'

How you get from that to the bank taking the entire building is beyond me.

Still think that if all those who had paid their monies had gone to court-then the judge would rule in their favour. Nobody would be kicked out.

The original  contracts between 'BuildCondo Company' and the buyers would carry alot of weight

The lawyer acting on behalf of DaRoadrunner's friend could not transfer Condominium Title deeds that did not exist.