Lending money to a Thai

[1FinickyOne]

15 hours ago, Leaver said:

So many fake titles floating around

They call me Mr. Tibbs... Earl of Sandwich, Duke of Earl - - like that?

[1FinickyOne]

14 hours ago, Leaver said:

It's like the "my girl is different" scenario. 

so, you have met my girl and agree?

[1FinickyOne]

19 hours ago, Bammie said:

Anytime I lend a friend or family member money I always look at it as a gift that will never be repaid. 

And i add one condition too.. no discussion.. no mention of the loan.. just one day, some day, surprise me but no talk in between...

 

I lent 10,000 baht to a Thai motorcycle guy to have an operation around 1999... He was so appreciative, he gave me his grandfathers ring which I wear on a chain every day... near 20 years later, he told me he finally had the $$ and wanted to pay me back... I declined, but when I lent him the $$ I knew he was a man of strong character... 

 

But, I do the same.. just gifts.. never disappointed that way...

[RobMuir]

10 hours ago, khunPer said:

To my knowledge it's depending of the title of the deed, only high level titles, like Nor Sor 3 and Chanote, can easily be transferred, and Nor Sor 3 is not full ownership, and can be disputed within 30 days after transfer.

 

When physically transferring a land you need to pay stamps, transfer fee and tax of the highest value, which is either the land office's appraised value, or the actual sales value. However, some land offices might accept to use only their appraised value, which often is lower than a sales value and actual trading price, whilst others insists on full documentation of the sale and price; I've experienced both.

 

The transfer fee is 2 percent and stamp duty is 0.5 percent of the value of the property, whilst tax is depending of use and length of ownership. If it's business it's 3.3 percent business tax on top, but no stamp duty. You can find a property transfer fee and tax calculator HERE.

 

Doing a transfer and a sale back; fees, and stamps, and taxes will need to be paid twice; and if the ownership is a short time only business tax will apply.

 

When a high title deed with full ownership is transferred, and there are no servitudes declared, then that's it. Any agreement about buying land back within a certain time will to my knowledge be an external document, which need to be takes through the normal legal system, if not fulfilled.

 

But there might of course be things that I don't know, I've just never heard about a legal registered "kaifaag"-method as an option for high title deeds.

 

However, things like that, i.e.  "kaifaag", are often used for lower titles, typically village and farm land with numerous different deed titles. Here a transfer is often just a sales agreement in presence of the head-of-villa (Poo yai ban), who might sign as witness. The blank power of attorney is typically a part of the agreement, and the title deed is held by the lender. Sometimes the interest is paid by the lenders right to use the land for farming, or rent it out, during the agreed period; other times an interest is agreed. Interest can legally not exceed 15 percent a year (pro anno). But the problem is that the land can be difficult to legally transfer at a land office, as much low titles land cannot be sold, but can be indheritage or transferred within family only. Often many families are related in a village, and also neighboring villages, so if lender is within family it's not a problem, or lender can sell to another family related person to borrower. So the power-of-attorney might be worthless in a land office; and it also happens that the copy of the owner's ID-card is outdated, as an ID-card has a validity period, if there a long period between issuing the power-of-attorney and actually using it.

 

The lender can however still use the court to get money back based on a loan document, but lender cannot take the land. I however know a case where the court gave the borrower a new chance to pay the loan, but no interest, and if defaulted the land should be sold, which could only be to someone that it legally could be transferred to, and if nobody wished to buy, then that's it. In another case the borrower claimed the land back after the lender took possession, and if the land is not legally transferred at a land office, the borrower might well succeed, if not squatter rules apply; i.e. the lender is squatter and use the land for a certain length of period.

 

Furthermore, you need to consider if it's wise with a foreigner as lender, as a foreigner cannot claim the land. Using a trusted Thai you legally have no rights at all to the land, but could however have a loan declared as servitude, just like a mortgage. For 2 million baht you should also consider the expenses for the transaction; i.e. fees, and stamps, and taxes, and eventual lawyer fees.

 

What a good informative reply from someone in the know as opposed the answers from those who obviously had never heard of Kaifaag/jumrong.

 

What do reckon of my 30 year lease double back up plan? Any issues there?

 

The title is chanote.

[khunPer]

On 4/30/2021 at 7:38 PM, RobMuir said:

Worst case scenario is I live on a personal 80 Rai personal resort for the next 30 years for 182 baht per day, selling the palm oil, durian and birds nest.

Not really, you'll need to pay transfer fee and tax, and either stamp duty or business tax, to transfer the property. Furthermore you need to pay tax of the full 30-year lease term upon registration as a servitude on the title deed. On top of that comes yearly business property tax for an 80 rai resort.

 

However, I think that if an owner of 80 rai chanote land will transfer it to someone for a 2 million baht loan, then either the land is either almost worthless, i.e. 25,000 baht a rai, or "there is something rotten in the state of..."????

[kingstonkid]

Follow up to lending money.  GF borrowed 10,000 baht from me last fall said she would pay it back.  Yesterday she shows me how much money she had and I ask her for my 10k.

 

You thought i would have asked her to kill herself. LOL 

 

Thais are of a mind that you do not have to pay back loans and I think from listening to others in Canada that it is not just Thais that think credit and overdraft are money to spend without repercussions.

[thaibeachlovers]

On 4/30/2021 at 1:26 PM, RobMuir said:

Yes, good point.

 

Will be in my trusted Thai business partners name. We have a company together (he funded his share, not just a nominee). We might even put it through the company.

 

I was hoping to get some real life info from someone experienced with that also.

Many of us have real life experience of lending giving money to Thais. Ignore the previous negative posts at your own risk.

[BritManToo]

On 5/1/2021 at 12:38 AM, RobMuir said:

Worst case scenario is I live on a personal 80 Rai personal resort for the next 30 years for 182 baht per day, selling the palm oil, durian and birds nest.

Disagree,

Worst case scenario ........ she has you shot in the head by a drive by motorcycle.

[RobMuir]

Just now, BritManToo said:

Disagree,

Worst case scenario ........ she has you shot in the head by a drive by motorcycle.

Good point. 

I will put the lease in my brother's name

[AlfHuy]

9 minutes ago, kingstonkid said:

Follow up to lending money.  GF borrowed 10,000 baht from me last fall said she would pay it back.  Yesterday she shows me how much money she had and I ask her for my 10k.

 

You thought i would have asked her to kill herself. LOL 

 

Thais are of a mind that you do not have to pay back loans and I think from listening to others in Canada that it is not just Thais that think credit and overdraft are money to spend without repercussions.

GF's never borrow, never ever.

They are entitled.

What she had before will always be her's.

What you have, becomes her's too (so they think).

[Surelynot]

3 minutes ago, BritManToo said:

Disagree,

Worst case scenario ........ she has you shot in the head by a drive by motorcycle.

....and paid for the drive by killing with your money......that's got to hurt.

Edited May 3, 2021 by Surelynot

[AlfHuy]

2 minutes ago, RobMuir said:

Good point. 

I will put the lease in my brother's name

And a good life insurance.

Please put my name down as a sole beneficiary, please, krub.

[gunderhill]

Lend her  3million,  just to be on the safe side.

[gunderhill]

2 minutes ago, Surelynot said:

she has you shot in the head by a drive by motorcycle.

Is  this a new  model, where can I get one?

[Surelynot]

1 minute ago, gunderhill said:

Is  this a new  model, where can I get one?

Ha....that's for Britman....but well spotted.

[kingofthemountain]

4 minutes ago, AlfHuy said:

They are entitled.

They think they are

untill they discover gf isn't a lifetime title

it was just a temporary situation

at the end of the day, it's up to the provider

but for some reasons this obvious fact need

to be remebered to her on a regular basis

[AlfHuy]

9 minutes ago, RobMuir said:

Good point. 

I will put the lease in my brother's name

I think Rob is writing a telenovela.

 

He has a very wealthy Thai lady friend. She is asset rich but cash poor (for the moment).

She has borrowed from banks and friends and family;

 

Now, she remembers her good mate Rob and asks for a small 2 Million contribution.

 

Rob thinks that it is the opportunity of a life-time to get his hands on a nice property for cheap or at least a good return on his investment.

 

Rob wants to take a lease in his name but is scared to get shot.

Solution: lease will be in his brother's name.

 

Rob, I would sell this story to a film producer and get the royalties.

[gunderhill]

7 minutes ago, AlfHuy said:

I think Rob is writing a telenovela.

 

He has a very wealthy Thai lady friend. She is asset rich but cash poor (for the moment).

She has borrowed from banks and friends and family;

 

Now, she remembers her good mate Rob and asks for a small 2 Million contribution.

 

Rob thinks that it is the opportunity of a life-time to get his hands on a nice property for cheap or at least a good return on his investment.

 

Rob wants to take a lease in his name but is scared to get shot.

Solution: lease will be in his brother's name.

 

Rob, I would sell this story to a film producer and get the royalties.

Nonsense,  you  will at  least need  to have a deep cave on that property to make it even  mildly interesting.

[RobMuir]

1 hour ago, AlfHuy said:

I think Rob is writing a telenovela.

 

He has a very wealthy Thai lady friend. She is asset rich but cash poor (for the moment).

She has borrowed from banks and friends and family;

 

Now, she remembers her good mate Rob and asks for a small 2 Million contribution.

 

Rob thinks that it is the opportunity of a life-time to get his hands on a nice property for cheap or at least a good return on his investment.

 

Rob wants to take a lease in his name but is scared to get shot.

Solution: lease will be in his brother's name.

 

Rob, I would sell this story to a film producer and get the royalties.

Just like to remind everybody that I am in no way romantically involved with this woman.

I have known her since before covid when she was debt free and had plenty. 

 

I hear all the members saying "don't lend Thais money" but none of you got a kaifaag agreement against property worth many times more than the loan, doubly secured with a 30 year lease in a relatives name who doesn't love in the country (in my case, my brother)

 

I am glad I opened this thread and got the feedback from a couple of posters who actually know about jumrong and kaifaag agreements.

And talking it through also gave me the idea of the lease, and then to be put into somebody else's name to avoid being shot on the head.

 

This woman wouldn't do that anyway. She is about to cash in big time with the sale of her large hotel, and will be living a life in the top 1%. She has a good future. 

 

She obviously believes the resort will settle in 3 months. I have my doubts because it is such a big deal with banks, lawyers and the tax department involved, I believe it will take longer. And the covid situation may also add delays.

 

I spoke to my lawyer this morning who said kaifaag is watertight. The disadvantages are mainly the added expense of transferring it to me and then back again. I won't be paying it, she will have to if she wants the money.

 

It seems every second member has lost money lending to Thais. Hope you see this is the best way to do it. If they don't repay, you actually end up with more if done correctly.

 

If she doesn't pay i will take over the resort and give free accommodation to all tvf members who have lost money lending to Thais. 

 

The resort is on 4 Rai of the 80. I will sell the other 76 rai as one Rai blocks to the same members.

 

It can be a shrine for all those poor farangs who got dudded because they didn't use the kaifaag/30 year lease.

[khunPer]

2 hours ago, RobMuir said:

Good point. 

I will put the lease in my brother's name

She'll have both of you shot, it only costs about 50k baht to get rid of a farang.

 

My lovely girlfriend had been kind and lend some money out to a Thai that did not pay her back. A good friend offered to help her, so she (the friend) set up a dinner with the local chief of police, whom she knew well. The kind big police boss even brought the solution with him, the preferred money collector and hitman...????

 

I need to add that my girlfriend still haven't been paid – it's a number of years ago now, so she probably have overcome it by now – and the hitman is probably still available for yet another job.

 

In my view, the most important thing to remember when living in Thailand: Always be worth more alive than dead...????

[khunPer]

44 minutes ago, RobMuir said:

Just like to remind everybody that I am in no way romantically involved with this woman.

I have known her since before covid when she was debt free and had plenty. 

 

I hear all the members saying "don't lend Thais money" but none of you got a kaifaag agreement against property worth many times more than the loan, doubly secured with a 30 year lease in a relatives name who doesn't love in the country (in my case, my brother)

 

I am glad I opened this thread and got the feedback from a couple of posters who actually know about jumrong and kaifaag agreements.

And talking it through also gave me the idea of the lease, and then to be put into somebody else's name to avoid being shot on the head.

 

This woman wouldn't do that anyway. She is about to cash in big time with the sale of her large hotel, and will be living a life in the top 1%. She has a good future. 

 

She obviously believes the resort will settle in 3 months. I have my doubts because it is such a big deal with banks, lawyers and the tax department involved, I believe it will take longer. And the covid situation may also add delays.

 

I spoke to my lawyer this morning who said kaifaag is watertight. The disadvantages are mainly the added expense of transferring it to me and then back again. I won't be paying it, she will have to if she wants the money.

 

It seems every second member has lost money lending to Thais. Hope you see this is the best way to do it. If they don't repay, you actually end up with more if done correctly.

 

If she doesn't pay i will take over the resort and give free accommodation to all tvf members who have lost money lending to Thais. 

 

The resort is on 4 Rai of the 80. I will sell the other 76 rai as one Rai blocks to the same members.

 

It can be a shrine for all those poor farangs who got dudded because they didn't use the kaifaag/30 year lease.

So if she can live together with the 1 percent on the hi-so top from sale of 80 rai land, with a 4 rai resort, it surely sounds like a beachfront plot in one of the superior tourist areas, stuffed with expensive 5-star resorts; otherwise 80 rai won't take her – or you – up in the hi-end 1 percent-level...????

 

Unfortunately, I once had a nice 1 rai land by an important main road on my hand, i.e. title deed and power of attorney – unfortunately the lady that owned the plot paid everything in due time...????

 

 

[RobMuir]

25 minutes ago, khunPer said:

She'll have both of you shot, it only costs about 50k baht to get rid of a farang.

 

My lovely girlfriend had been kind and lend some money out to a Thai that did not pay her back. A good friend offered to help her, so she (the friend) set up a dinner with the local chief of police, whom she knew well. The kind big police boss even brought the solution with him, the preferred money collector and hitman...????

 

I need to add that my girlfriend still haven't been paid – it's a number of years ago now, so she probably have overcome it by now – and the hitman is probably still available for yet another job.

 

In my view, the most important thing to remember when living in Thailand: Always be worth more alive than dead...????

Good advice once again Per.

Thankyou for your contribution. 

I will "joke" to her that if I am suddenly shot it will be obviously her. 

And her daughter will be shot also if that happens.

 

I wish you girlfriend all the best getting her money back.

In hindsight she would have been better of using the kaifaag method, secured with a 30 year lease in a relatives name who doesn't live in Thailand.

 

 

[khunPer]

16 minutes ago, RobMuir said:

Good advice once again Per.

Thankyou for your contribution. 

I will "joke" to her that if I am suddenly shot it will be obviously her. 

And her daughter will be shot also if that happens.

 

I wish you girlfriend all the best getting her money back.

In hindsight she would have been better of using the kaifaag method, secured with a 30 year lease in a relatives name who doesn't live in Thailand.

She did – Kaifaag – she is cleaver, but as I told you, it unfortunately won't always work for all farm- and village land, if the landowner is "difficult"...????

[RobMuir]

1 hour ago, khunPer said:

So if she can live together with the 1 percent on the hi-so top from sale of 80 rai land, with a 4 rai resort, it surely sounds like a beachfront plot in one of the superior tourist areas, stuffed with expensive 5-star resorts; otherwise 80 rai won't take her – or you – up in the hi-end 1 percent-level...????

To clarify...

The small resort is on the 80 Rai which she will be putting up. The resort only covers 4 Rai of it. The rest is palm and durian.

 

It is 500 meters to the beach. Land in that area generally sells for 1.5ish million per Rai. It is not in a built up tourist area.

 

The bigger resort that she is selling is in Patong less than 50 meters from the beach. Her father acquired it in the late 1970's when nothing was down there.

It is worth a lot of money. She had a deal lined up before covid hit which fell through because of covid. She reduced the price accordingly and has a new buyer, who will knock most of it down. She kept paying most of her staff, some who has been with her for decades, but regrets that a bit now. Like most she didn't expect this covid to drag on for as long as it has.

 

Her plan is to jumrong the smaller one to me and sell the bigger one to pay me and other debts. Which will still leave her many millions.

 

After all the helpful contributions here I will tell her I won't accept jumrong but am considering kaifàag with a 30 year lease attached.

 

 

Edited May 3, 2021 by RobMuir

[khunPer]

28 minutes ago, RobMuir said:

To clarify...

The small resort is on the 80 Rai which she will be putting up. The resort only covers 4 Rai of it. The rest is palm and durian.

 

It is 500 meters to the beach. Land in that area generally sells for 1.5ish million per Rai. It is not in a built up tourist area.

 

The bigger resort that she is selling is in Patong less than 50 meters from the beach. Her father acquired it in the late 1970's when nothing was down there.

It is worth a lot of money. She had a deal lined up before covid hit which fell through because of covid. She reduced the price accordingly and has a new buyer, who will knock most of it down. She kept paying most of her staff, some who has been with her for decades, but regrets that a bit now. Like most she didn't expect this covid to drag on for as long as it has.

 

Her plan is to jumrong the smaller one to me and sell the bigger one to pay me and other debts. Which will still leave her many millions.

 

After all the helpful contributions here I will tell her I won't accept jumrong but am considering kaifàag with a 30 year lease attached.

Have you checked the land office's appraised value?

 

1.5 million baht x 80 rai is 120 million baht, if it mirrors market value. Transfer fee, stamp duty,  and withholding tax could be more millions of baht than the 2 million you talk about borrowing the owner.

 

And what about a 30-year lease that mirrors the market price, it's 1.1 percent tax and stamp duty for the full lease sum upon registration of servitude.

 

Even if you might get away with an appraised value of 10 percent of your mentioned market value, transfer and taxes range around 800.000 baht.

 

Normal procedure is that the seller pays taxes, and the buyer pays transfer fee and stamp duty, but it can be agreed different. If the borrowers pays all it would be like a 100 percent loan to pay back, but with a probably not very attractive 30-year lease, which however might reflect some annually or monthly income that you shall pay...????

 

Have you talked to the owner about this?

 

Anyway, Phuket is an attractive area, but probably difficult to sell a resort, and land, for pre-Covid market price, both at the moment, and in the near future...????

[Simple Jack]

My dear old father once told me. " Don't gamble or lend money you can't afford to lose" Then again. It's you're life. Do what you wish.

[Gecko123]

17 hours ago, RobMuir said:

I spoke to my lawyer this morning who said kaifaag is watertight.

Let out a loud guffaw when I read this. Are you planning on suing for legal malpractice if things don't work out as planned? Was he willing to put that in writing? ????

 

I can think of at least two legal arguments the borrower could make to annul, or stop you from enforcing the agreement, even after the borrower has accepted consideration (the loan).

 

The borrower could argue that the corporate entity into whose name the property was transferred was just a sham nominee the OP used in order to circumvent Thailand's land laws prohibiting foreign ownership of land. In support of this argument, she could claim that she dealt strictly with you, you told her it was your money and bank records will support this, your business partner had nothing to do with the loan, and that making large real estate loans is beyond the scope of the corporation's normal business activities and corporate charter. Thus they could argue that the contract was unenforceable because it violated land law.

 

The borrower could also argue that the contract violates provisions of the contract section of Thailand's civil code which makes a contract which allows one party to receive a windfall benefit at the expense of another party unenforceable. It seems to me that a contract where one party agrees to forfeit in its entirety an asset worth 10's of millions of baht in exchange for a loan of 2 mm baht would run afoul of this provision of the civil code.

 

Were the borrower to prevail on either of these arguments, you could easily end up holding an unsecured loan, i.e., a virtually worthless piece of paper.

 

 

 

 

Edited May 3, 2021 by Gecko123

[HAPPYNUFF]

Many years ago, my (then)  wife loaned several hundred thousand baht to a  school teacher.    Many papers signed and sealed,   government stamps all over them, all registered, kaifaag registered.      Teacher,  naturally,  defaulted on payments.    Off to court. Lawyers fee 30,000 baht. Court ordered  loan to be repaid at 1000 baht per month.  ???.  no  word on seizure of  her property as detailed in  legal papers.    Agai n defaulted  on  1000 baht  payments. Lawyer wanted another 30,000 to go back to court.

 Just walked away  and  wiped it off.   I  wouldn't loan  the cost of a bandaid to a leg amputated Thai  in future.

[motdaeng]

32 minutes ago, HAPPYNUFF said:

Many years ago, my (then)  wife loaned several hundred thousand baht to a  school teacher.    Many papers signed and sealed,   government stamps all over them, all registered, kaifaag registered.      Teacher,  naturally,  defaulted on payments.    Off to court. Lawyers fee 30,000 baht. Court ordered  loan to be repaid at 1000 baht per month.  ???.  no  word on seizure of  her property as detailed in  legal papers.    Agai n defaulted  on  1000 baht  payments. Lawyer wanted another 30,000 to go back to court.

 Just walked away  and  wiped it off.   I  wouldn't loan  the cost of a bandaid to a leg amputated Thai  in future.

a story hard to believe. did you trust your laywer? 

eg. bank's must (for sure) have better laywer's ...  

[AlfHuy]

4 hours ago, Gecko123 said:

Let out a loud guffaw when I read this. Are you planning on suing for legal malpractice if things don't work out as planned? Was he willing to put that in writing? ????

 

I can think of at least two legal arguments the borrower could make to annul, or stop you from enforcing the agreement, even after the borrower has accepted consideration (the loan).

 

The borrower could argue that the corporate entity into whose name the property was transferred was just a sham nominee the OP used in order to circumvent Thailand's land laws prohibiting foreign ownership of land. In support of this argument, she could claim that she dealt strictly with you, you told her it was your money and bank records will support this, your business partner had nothing to do with the loan, and that making large real estate loans is beyond the scope of the corporation's normal business activities and corporate charter. Thus they could argue that the contract was unenforceable because it violated land law.

 

The borrower could also argue that the contract violates provisions of the contract section of Thailand's civil code which makes a contract which allows one party to receive a windfall benefit at the expense of another party unenforceable. It seems to me that a contract where one party agrees to forfeit in its entirety an asset worth 10's of millions of baht in exchange for a loan of 2 mm baht would run afoul of this provision of the civil code.

 

Were the borrower to prevail on either of these arguments, you could easily end up holding an unsecured loan, i.e., a virtually worthless piece of paper.

 

 

 

 

You seem to be a lawyer.