Has anyone ever RENEWED their 30-year lease without any problem?

[sh2019]

I ALMOST set up a Ltd to buy land + property. I read up on Thai law and decided not to. I am now considering to lease the land and have read all about it ????There is simply no "secure" way other than the secured lease offshore option which unfortunately, is not available with the villa I'd like to buy. So my question: Has anyone on this forum had a good experience with their 30(+30+30) lease contract and successfully renewed the lease after 30 years? I guess I am clutching straws, I'd just really like to hear a success story between all the doom and gloom. Failing that, has anyone actually been thrown out of their home after 30 years because the lease wasn't renewed as expected? I'd like to hear some real life experience not just speculations that all hell breaks lose if you do this or that.

[Langsuan Man]

It will be interesting if anyone admits to it, since 30+30+30, leases are not valid or legal in Thailand.  Kind of tough to enforce something that the law does not even recognize

 

There is a reason most opt for the Company Route, since that is clearly legal despite the naysayers here at Thai Visa , with the added advantage of no time limits 

[FritsSikkink]

30(+30+30) lease contract

Not valid

[ukrules]

There are two houses in my street that are 'owned' by foreigners with no Thais involved, obvious company owned houses.

 

They're both attempting to sell their houses for between 6 and 8 million Baht.

 

This is a row of townhouses, my next door neighbour (a Thai) was recently booted out of the house over a debt and the 'land department' was called in to provide a proper valuation. It was 2.8 million Baht. My rent in this row of houses if 15,000 / month.

 

The other houses for sale are identical apart from refurbishments, etc.

 

The woman who I live with (also a Thai) told me after speaking to a very informed source that a 5 to 6 years ago the people who owned these houses back then liked to sell them for double the true value and waited until they found some suckers to buy them.....and it worked.

 

This is why one house in a row of houses is 'worth' only 2.8 million and the others are 'selling' for between 6 and 8 million Baht.

 

Needless to say the people who are attempting to sell the houses for 6 to 8 million Baht have had no 'luck' for nearly 2 years now....

 

This practice is kown as the 'greater fool theory' - google it if you're not sure what it means. Essentially it's a business model where you sell to the bumbest idiot you can find for the most amount of money they can afford......

 

There's no such thing as a lease that lasts more than 30 years in Thailand. There should be but there isn't.

[sh2019]

Thank you. I think I have come to terms that either I accept that all I'd do is pay a rent 30 years up-front and make the best out of it OR drop it altogether :(((

[Netease]

27 minutes ago, sh2019 said:

Thank you. I think I have come to terms that either I accept that all I'd do is pay a rent 30 years up-front and make the best out of it OR drop it altogether :(((

I wouldn't do that, at any time they want you out they will find a way and you won't get your money back

[DaRoadrunner]

The company way might be ok if the company is paying tax as a legit business, so the shareholders are not just nominees.

[Destiny1990]

2 hours ago, Netease said:

I wouldn't do that, at any time they want you out they will find a way and you won't get your money back

No its not rent its a 30 years lease.

So he can only be kicked out after 30 years.

But its kinda like renting because i can be terminated after the lease expires 

[BigFun]

4 hours ago, ukrules said:

There are two houses in my street that are 'owned' by foreigners with no Thais involved, obvious company owned houses.

 

They're both attempting to sell their houses for between 6 and 8 million Baht.

 

This is a row of townhouses, my next door neighbour (a Thai) was recently booted out of the house over a debt and the 'land department' was called in to provide a proper valuation. It was 2.8 million Baht. My rent in this row of houses if 15,000 / month.

 

The other houses for sale are identical apart from refurbishments, etc.

 

The woman who I live with (also a Thai) told me after speaking to a very informed source that a 5 to 6 years ago the people who owned these houses back then liked to sell them for double the true value and waited until they found some suckers to buy them.....and it worked.

 

This is why one house in a row of houses is 'worth' only 2.8 million and the others are 'selling' for between 6 and 8 million Baht.

 

Needless to say the people who are attempting to sell the houses for 6 to 8 million Baht have had no 'luck' for nearly 2 years now....

 

This practice is kown as the 'greater fool theory' - google it if you're not sure what it means. Essentially it's a business model where you sell to the bumbest idiot you can find for the most amount of money they can afford......

 

There's no such thing as a lease that lasts more than 30 years in Thailand. There should be but there isn't.

What rubbish. The LO regularly values land where I live at 200,000-300,000 per rai whereas it sells for 10 times or more that figure. The LO appraisal (raka pramun) is very often very low I would imagine in other areas too. As for house valuation they would have no idea I'm sure.

[BigFun]

3 hours ago, sh2019 said:

Thank you. I think I have come to terms that either I accept that all I'd do is pay a rent 30 years up-front and make the best out of it OR drop it altogether :(((

You have a 3rd option to set up a Thai company. In 15 years of clients doing this I have never had a problem.

 

Intrigued to know what the offshore lease is too? 

[Retdent]

6 hours ago, sh2019 said:

Thank you. I think I have come to terms that either I accept that all I'd do is pay a rent 30 years up-front and make the best out of it OR drop it altogether :(((

 

There is no way you should ever do that. it does not work, even in in Australia. In the weekend news in Au. there was a report of an ex AFL footballer (Busustow) who paid 40 years rent up front (about $200K), the company he was dealing with went belly up. Reportedly, he may now need to sell his memorabelia to get by. Look for a better option. Why not just rent and move as it falls into disrepair.

[trd]

You have a 3rd option to set up a Thai company. In 15 years of clients doing this I have never had a problem.
 
Intrigued to know what the offshore lease is too? 

You will still have to find a Thai shareholder.

[tpkhk]

As various people have reported, only the 1st 30 years are protected by law.  The 2nd & 3rd 30 year period renewals (not recognized by the courts) depend on the integrity of the lessor. 

 

To increase your chances....

 

a) It helps if it is a large developer (preferably even a listed co) offering this as standard to tens, if not hundreds of other buyers.  If your agreement is from an individual, his heirs could choose to not renew.

 

b) If you have an option of additional clauses, see if you can get the following added in - probably wont carry much weight, but better than nothing

- Lease payments equivalent to 1/3rd will be refundable for each 30 year lease that is not renewed.  

- If the lease is transferred to a person/entity able to hold freehold - the lease periods are dissolved and it becomes freehold. (some wording to that effect)... ie keeps it attractive if you decide to sell...

- If the laws of the land change to allow longer leases, you have the option of increasing accordingly.

 

To answer your question - I haven't come across anyone who has renewed, some lawyers may have - ie. in Phuket etc. some of the earliest developments may be coming up for renewal.  Some of the lawyers with experience can even tell you which developers to avoid. 

[Humpy]

I'm nearly 80. What is my best option of staying in our house until I die if my wife dies before me ? If I take the 30 year option who do I have to pay the 30 year rent to ?

[clonetom]

Other options to company set-up and 30-year lease include:

 

Right of Habitation (Civil and Commercial Code Sections 1402 - 1409)

Right of Superficies (Civil and Commercial Code Sections 1410 - 1416)

Right of Usufruct (Civil and Commercial Code Sections 1417 - 1428)

 

Translated Thai/English version can be found online.

 

The latter two are considered "real property rights"" and covered by the land title (chanote). Both can be set for either 30 years (inheritable) or lifetime (uninhabitable) and "basically"only differ in transferability as the key point.

 

Note that all three are under the discretion of the Land Department (Gom Tii Din) and while there were no problems in my area, one may want to have a talk with the relevant official in one's area.

 

For detailed infos and contractual hints, please PM...

 

 

 

 

[The Theory]

9 hours ago, sh2019 said:

Thank you. I think I have come to terms that either I accept that all I'd do is pay a rent 30 years up-front and make the best out of it OR drop it altogether :(((

Buy on you gf name then lease 30 year it from her. Pay of rent for 30 year (small annual payment). 

Don't lease it from unknown. 

 

[khunPer]

17 hours ago, sh2019 said:

Has anyone on this forum had a good experience with their 30(+30+30) lease contract and successfully renewed the lease after 30 years?

The 30(+30+30) lease is illegal, and to my knowledge even mentioning it in a lease-agreement, could make the agreement void.

 

The Civil and Commercial Code 'rent of property' says...

Quote

Section 540. The duration of a hire of immovable property cannot exceed thirty years. If it is made for a longer period, such period shall be reduced to thirty years. The aforesaid period may be renewed, but it must not exceed thirty years from the time of renewal.

Full text in English translation here.

 

About contracts...

Quote

A promise based on general contact laws, say to do something in future (e.g. to renew a lease in 30 years time), may turn out unenforceable under Thai contract law.

Source "Options in a lease contract".

 

When signing a lease agreement running for 3+ years it shall be registered at the local Land Office to be legal, and tax paid for the full lease term.

 

Compare your leasing fees, eventually tax deposit, and estimated interest during the term – either loss of interest for prepaid, or gain of interest when paying monthly compared to buying a property for cash – with buying price of the land/property. You might in 30 years pay the full value of the land.

 

Compare that with an option for either the company limited method, or letting a Thai wife or girlfriend owing the land, and giving you habitation right of one-or-kind (read more here). However, not all land offices will accept a usufruct servitude for a foreigner, and be also aware of the legality of contracts between husband and wife.

 

As poster @The Theory suggested – "Buy on you gf name then lease 30 year it from her" – and have loan-servitude for the sales price (or like servitude) registered on the land to protect your "investment", and lease it from her. The monthly leasing fee can equal the repayments of the loan. However, you must check that possibility with a local experienced property solicitor that know what the local land office accepts of servitudes; there can be differences in different areas, what's possible here, might not be possible where you look at property, vice versa.

 

And to your initial question: No, I have not heard about renewals of 30-year lease periods – however, might exist – and was curious to see if any posters came up what a reply. 

 

My solicitor said that a separate agreement – not mentioned in the initial lease agreement – could be made for an optional lease term(s). However, it would probably not be worth the paper it was written on, as it gives no rights at all, and the only way to enforce it, would be proceeding with a civil court case. If the lessor had died, or the land was sold – and of course respecting the lease-servitude for the original 30 years – it would be hard to sue someone.

 

In another thread I asked about if any cases were known, where a private home owned by the company limited method has been claimed illegal, because of using the company limited method – and lease out from the company – but seems like no replies. Cases with fraud – or large speculative, or "white-washing" projects – don't count; its expected that one keep the said company limited in as legal condition as possible. Apart from the relative small annual cost for a running company, it might not be that bad an option; also compared to when leasing 30-years from third party and during that period pay the full value of the land/property – or more – anyway.

 

There might not be a general optimal solution for safe home-habitation or home-ownership in Thailand, as lots of details are individual from case to case, and area to area.

????

[timewilltell]

You all might be interested to know the outcome of a Dika court decision (Supreme Court equivalent and binding in precedent) on my lease which was a 30 year lease which I took out after buying the property in the name of my ex-wife (common law) to hold for me.  The lease was terminated by proven fraud. The fraudster was my ex-wife (common law) who admitted the fact that she stole the chanote by breaking into the safe and conspired with others to cancel the lease to sell on the same day to a money lender. The moneylender admitted being suspicious enough to have to ask the land officer to confirm the transaction was Ok for him to lend under sale with right of redemption - an obnoxious law that is basically a workaround for the interest limits laws which are masked as charges and redemption fees and unwritten contracts for extension payments.

 

The decision of the Dika court is far-ranging and really quite shocking. Three parties, myself, my ex-wife in admission and the seller all gave evidence that I bought the house and put it in the name of my ex-wife to hold for me - there was no evidence to suggest any other situation other than the defence scrabbling around for excuses to defeat my claim for recovery.

 

There are several aspects that I cannot cover due to the rules governing contempt of court but the main decision was this.

 

The purchase of the house and act of putting it in the name of the ex-wife meant that I intended to give it to her as we were living together (kin khao gan kin khao gan which means far more than eat food together and is a big thing in Thai law so far as responsibilities and ramifications go) The evidence refuting that idea was simply not accepted.

 

The decision found the very act of taking the lease from her was merely an act to try to stop her selling it out from under me without my knowledge and enhanced the point that she was the owner because it provides for payment for the use of the house.

 

She was perfectly entitled in law to sell the house as she was the owner and the cancellation of the lease has no bearing on that issue in law. 

 

You might infer there is an inference that as she was the owner she was entitled to have the chanote and therefore could not have stolen it despite the admission of that fact.

 

You have to infer that taking a lease with any person you live with acknowledges they own the property and that such leases are practically unenforceable and useless.

 

Interestingly the point was also made that as I had businesses that held land (for development purposes), I could have put my personal house in the name of that company if I intended to buy it and not give it away to my ex-wife. It seems the point that holding personal property in that way has been routinely threatened to be against the law and also that putting the property in the name of a company adds it to the assets which are owned by the shareholders and not any one person was not considered.

 

The end result is that whilst you can take a lease from your partner all you are doing is proving the point that you intended to gift it and confirming ownership by your partner who can dispose of the property as she wishes. 

 

I suggest that you do not use a lease for any form of ownership and if you think a lease is anything other than a contract of rental much as you might rent a motorbike then I suggest you invest a few baht and grab a copy of the commercial code which is available in English. By my experience, quite a few lawyers in Thailand do not seem to have a very good grasp of the law perhaps because the law is far more the personal interpretation of the judge rather than interpretations passed down through precedent as you find in the UK and so the real meaning of the law is malleable.

 

Do get the best legal advice you can afford and understand even that may not be correct and if you can't afford the best then invest somewhere else - in fact just invest somewhere else.

[sh2019]

I'm sorry this has happened to you but can we please stay on topic - I don't have a Thai spouse, so this is for a foreign NON-Thai person WITHOUT any Thai spouse trying to buy a property in Thailand and having it for ideally more than 30 years. A Thai nominee shareholder company is a NO IMO because it is illegal. I do believe a leasehold if properly done and registered is as good as safe for 30 years, the problem is just that, that it's just for 30 years.

[Tomahawk21]

On 6/10/2019 at 4:05 AM, sh2019 said:

Thank you. I think I have come to terms that either I accept that all I'd do is pay a rent 30 years up-front and make the best out of it OR drop it altogether :(((

buy in a company name, i have owed house here for over 20 years no problems.

[Oxx]

20 hours ago, Humpy said:

I'm nearly 80. What is my best option of staying in our house until I die if my wife dies before me ? If I take the 30 year option who do I have to pay the 30 year rent to ?

Usufruct can give you the right to live in the property for the rest of your life.  No need to pay rent or associated taxes.

[Jumbo1968]

If you have bought a property on a 30 year lease, what happens after that expires, do you have to pay for another 30 year lease ?

If you do it doesn’t appear to be a good deal/investment, you are just paying rent upfront for 30 years ?

[steve73]

What about the "usefruct" option?  This usually get a mention.

It's a lifetime lease as I understand it.

[midzo]

On 6/10/2019 at 4:05 AM, sh2019 said:

Thank you. I think I have come to terms that either I accept that all I'd do is pay a rent 30 years up-front and make the best out of it OR drop it altogether :(((

If you pay rent up front you have no leverage when it comes to getting repairs done by the landlord. 

 

Hard enough to get a landlord to fix a leaky roof on a month-to-month contract. 

[Jumbo1968]

1 minute ago, midzo said:

If you pay rent up front you have no leverage when it comes to getting repairs done by the landlord. 

 

Hard enough to get a landlord to fix a leaky roof on a month-to-month contract. 

I would have thought as a leaseholder the owner would responsible 

for any repair.

i am a leaseholder in the U.K. of an Apartment, the leaseholders are responsible for all repairs including redecoration.

[DJ54]

14 hours ago, sh2019 said:

I'm sorry this has happened to you but can we please stay on topic

Unless I’m mistaken it’s on topic with the poster experience to be helpful...

[ThomasThBKK]

16 hours ago, timewilltell said:

You all might be interested to know the outcome of a Dika court decision (Supreme Court equivalent and binding in precedent) on my lease which was a 30 year lease which I took out after buying the property in the name of my ex-wife (common law) to hold for me.  The lease was terminated by proven fraud. The fraudster was my ex-wife (common law) who admitted the fact that she stole the chanote by breaking into the safe and conspired with others to cancel the lease to sell on the same day to a money lender. The moneylender admitted being suspicious enough to have to ask the land officer to confirm the transaction was Ok for him to lend under sale with right of redemption - an obnoxious law that is basically a workaround for the interest limits laws which are masked as charges and redemption fees and unwritten contracts for extension payments.

 

The decision of the Dika court is far-ranging and really quite shocking. Three parties, myself, my ex-wife in admission and the seller all gave evidence that I bought the house and put it in the name of my ex-wife to hold for me - there was no evidence to suggest any other situation other than the defence scrabbling around for excuses to defeat my claim for recovery.

 

There are several aspects that I cannot cover due to the rules governing contempt of court but the main decision was this.

 

The purchase of the house and act of putting it in the name of the ex-wife meant that I intended to give it to her as we were living together (kin khao gan kin khao gan which means far more than eat food together and is a big thing in Thai law so far as responsibilities and ramifications go) The evidence refuting that idea was simply not accepted.

 

The decision found the very act of taking the lease from her was merely an act to try to stop her selling it out from under me without my knowledge and enhanced the point that she was the owner because it provides for payment for the use of the house.

 

She was perfectly entitled in law to sell the house as she was the owner and the cancellation of the lease has no bearing on that issue in law. 

 

You might infer there is an inference that as she was the owner she was entitled to have the chanote and therefore could not have stolen it despite the admission of that fact.

 

You have to infer that taking a lease with any person you live with acknowledges they own the property and that such leases are practically unenforceable and useless.

 

Interestingly the point was also made that as I had businesses that held land (for development purposes), I could have put my personal house in the name of that company if I intended to buy it and not give it away to my ex-wife. It seems the point that holding personal property in that way has been routinely threatened to be against the law and also that putting the property in the name of a company adds it to the assets which are owned by the shareholders and not any one person was not considered.

 

The end result is that whilst you can take a lease from your partner all you are doing is proving the point that you intended to gift it and confirming ownership by your partner who can dispose of the property as she wishes. 

 

I suggest that you do not use a lease for any form of ownership and if you think a lease is anything other than a contract of rental much as you might rent a motorbike then I suggest you invest a few baht and grab a copy of the commercial code which is available in English. By my experience, quite a few lawyers in Thailand do not seem to have a very good grasp of the law perhaps because the law is far more the personal interpretation of the judge rather than interpretations passed down through precedent as you find in the UK and so the real meaning of the law is malleable.

 

Do get the best legal advice you can afford and understand even that may not be correct and if you can't afford the best then invest somewhere else - in fact just invest somewhere else.

Were you _legally_ married at the time you did that?

 

From what i understand all contracts between wife and husband in thailand can be nullified as long as no third party is damaged by doing so.

[BritManToo]

16 hours ago, timewilltell said:

You all might be interested to know the outcome of a Dika court decision

Not all that interesting as you put the land in your wife's name in an attempt to bypass Thai restrictions on foreigners owning land. You admitted a crime in court, and they punished you for it.

[timewilltell]

15 hours ago, sh2019 said:

I'm sorry this has happened to you but can we please stay on topic - I don't have a Thai spouse, so this is for a foreign NON-Thai person WITHOUT any Thai spouse trying to buy a property in Thailand and having it for ideally more than 30 years. A Thai nominee shareholder company is a NO IMO because it is illegal. I do believe a leasehold if properly done and registered is as good as safe for 30 years, the problem is just that, that it's just for 30 years.

With respect I think the problem is you think a lease is good as safe in Thailand - the facts are they are only safe until someone decides to scam you - then you find out the real law. As you said Thai nominee companies are supposedly against the law and yet the Dika court suggests otherwise.

 

the key takeaway is that you are trying to secure tenure under the law but you don’t know what the law is until you have to test it out as my cases (and I have 13 more that will leave your eyes watering but don’t want to bog down the thread with a book).

 

 

[timewilltell]

41 minutes ago, BritManToo said:

Not all that interesting as you put the land in your wife's name in an attempt to bypass Thai restrictions on foreigners owning land. You admitted a crime in court, and they punished you for it.

That is nonsense - a lease should be valid and not capable of being cancelled without your approval whoever holds the ownership.