Beware Bogus Land Deals

[quiksilva]

Beware of bogus land deals

Wat Suan Kaew case underscores need for purchasers to tread very carefully

SRIWIPA SIRIPUNYAWIT

When buying a piece of land, people rarely ask themselves the simple question of whether the seller actually owns the property. But a number of recent cases illustrate the importance of asking this most basic question. One high-profile dispute involves a 10-million-baht land plot purchased by the Suan Kaew Temple Foundation.

The story begins several years ago when the foundation, established by a well-respected monk Phra Payom, bought a land plot to build shelters. The land belonged to Wantana Suksamrerng, who claimed ownership through ''adverse possession''_ similar to squatter's rights.

The son of the previous owner took the case to court, using his mother's deed to claim land ownership. The court annulled the temple's purchase and the original land owner demanded an additional seven million baht for the plot. The temple said it could only afford three million.

There are two key issues arising from this case. First is the issue of adverse possession. Second, the importance of determining whether the land really belongs to the seller.The law says that a person can own land if he has peacefully and openly possessed it with the intention of owning it for a period of 10 years.

Thawat Damsa-ard, a partner with the international law firm Tilleke & Gibbins, explains that the law, though it may seem unfair to the original owner, attempts to attain the highest level of property utilisation.

Therefore, it is up to the buyer to check that the seller really is the property's original owner.

Another example involves an orphanage that bought a plot of land in Pattaya. After completing the purchase, the buyer discovered that the land was claimed by a bank. Because the previous owner had used the land as collateral, the bank was able to seize the property.

''There are so many such cases today and it means that buyers must be wise enough to check all of the details before making a purchase. Or else, they should seek assistance from legal consultants who are more familiar with the issue,'' Mr Thawat explains.

The lawyer offers the following advice for prospective buyers of any property:

• The buyer should deal only with the true or original owner. To make sure the owner is real and original, the buyer should ask for a copy of the title deed from the owner and check it with the Land Department.
  
• The credibility of the land developer always counts. Sometimes it is safer buy from a reputable land developer.
  
• Make sure the land you want to purchase and the piece stated on the title deed are the same plot. There are often instances when the title deeds and the actual land plots don't match. The Land Department can provide this information.
  
• There are some areas and pieces of land that are not allowed to be owned by any private entities, such as plots next to the sea coast. Therefore, buyers need to check if the lands they are buying fall into these categories.
  
• Check if the plot is under expropriation. It's no fun if the land you purchase is expropriated one year later.
  
• The buyers should visit the land themselves to ensure that there are no conflicting claims on the plot.
  
• Make sure that the plot has access to a public road. This is one significant issue that land buyers tend to overlook.
  

The contract is the key. Buyers need to make sure that all of the essential details are clearly written into the contract, such as any unusual characteristics of the plot. It is the buyer's duty to thoroughly check these details.

For instance, a buyer should be wary if the land provides no access to public roads, or if poisonous trash or toxic substances have been dumped on the plot. These are characteristics that must be clearly mentioned in the contract as they are prime factors that can influence the buyer's decision. The contract or the purchase of the land could become annulled if it is found that the sellers intentionally covered up the truth.

Some really useful tips here, for Thais and Farangs lucky enough to have trustworthy Thai partners.

http://www.bangkokpost.com/Business/28May2007_biz45.php

Edited May 28, 2007 by quiksilva

[Beardog]

Beware of bogus land deals

Wat Suan Kaew case underscores need for purchasers to tread very carefully

SRIWIPA SIRIPUNYAWIT

When buying a piece of land, people rarely ask themselves the simple question of whether the seller actually owns the property. But a number of recent cases illustrate the importance of asking this most basic question. One high-profile dispute involves a 10-million-baht land plot purchased by the Suan Kaew Temple Foundation.

The story begins several years ago when the foundation, established by a well-respected monk Phra Payom, bought a land plot to build shelters. The land belonged to Wantana Suksamrerng, who claimed ownership through ''adverse possession''_ similar to squatter's rights.

The son of the previous owner took the case to court, using his mother's deed to claim land ownership. The court annulled the temple's purchase and the original land owner demanded an additional seven million baht for the plot. The temple said it could only afford three million.

There are two key issues arising from this case. First is the issue of adverse possession. Second, the importance of determining whether the land really belongs to the seller.The law says that a person can own land if he has peacefully and openly possessed it with the intention of owning it for a period of 10 years.

Thawat Damsa-ard, a partner with the international law firm Tilleke & Gibbins, explains that the law, though it may seem unfair to the original owner, attempts to attain the highest level of property utilisation.

Therefore, it is up to the buyer to check that the seller really is the property's original owner.

Another example involves an orphanage that bought a plot of land in Pattaya. After completing the purchase, the buyer discovered that the land was claimed by a bank. Because the previous owner had used the land as collateral, the bank was able to seize the property.

''There are so many such cases today and it means that buyers must be wise enough to check all of the details before making a purchase. Or else, they should seek assistance from legal consultants who are more familiar with the issue,'' Mr Thawat explains.

The lawyer offers the following advice for prospective buyers of any property:

• The buyer should deal only with the true or original owner. To make sure the owner is real and original, the buyer should ask for a copy of the title deed from the owner and check it with the Land Department.
  
• The credibility of the land developer always counts. Sometimes it is safer buy from a reputable land developer.
  
• Make sure the land you want to purchase and the piece stated on the title deed are the same plot. There are often instances when the title deeds and the actual land plots don't match. The Land Department can provide this information.
  
• There are some areas and pieces of land that are not allowed to be owned by any private entities, such as plots next to the sea coast. Therefore, buyers need to check if the lands they are buying fall into these categories.
  
• Check if the plot is under expropriation. It's no fun if the land you purchase is expropriated one year later.
  
• The buyers should visit the land themselves to ensure that there are no conflicting claims on the plot.
  
• Make sure that the plot has access to a public road. This is one significant issue that land buyers tend to overlook.
  

The contract is the key. Buyers need to make sure that all of the essential details are clearly written into the contract, such as any unusual characteristics of the plot. It is the buyer's duty to thoroughly check these details.

For instance, a buyer should be wary if the land provides no access to public roads, or if poisonous trash or toxic substances have been dumped on the plot. These are characteristics that must be clearly mentioned in the contract as they are prime factors that can influence the buyer's decision. The contract or the purchase of the land could become annulled if it is found that the sellers intentionally covered up the truth.

Some really useful tips here, for Thais and Farangs lucky enough to have trustworthy Thai partners.

http://www.bangkokpost.com/Business/28May2007_biz45.php

Thanks for the awesome post Quick . I almost got snagged on the first real estate deal & the second one money was owed on the property & I didn't buy, I had a feeling there was a chance of losing & it looks llike you are right on the first deal the lawyer said it was right to own house only & further investigation proved he in fact did not own the property. The second I suspect who-ever he owes 650,000 baht to is the owner till paid. I think it would be the bank. A clear Chinote with a full investigation is the only way to safeguard your investment! Thanks for the post!

[Sunbelt Asia]

Qiksilva,

Saw this in the BangkokPost this morning and was going to post it. You took the words out of my mouth, good advice.

We've had quite a number of times where the client hired us to do a search to verify if the seller who stated he owns the condo or house and had the deed, were the true seller. The search in a number of cases showed something else was. (happens it seems at least once a month) You wonder sometimes how some of these people grow such a big pair of brass balls.

Also have seen where people actually thought they had bought a condo at the Land Dept and had not. One time it was registered in the gfs name! Everything was done in Thai and he trusted the girlfriend

Other case, it was a leasehold condo and the buyer of the leasehold had gotten only a receipt of a petition to the land office that they will be renting the condo out on a leasehold. The seller never finished the process of registering the condo. The announcement had been done three years before.

Another case, the buyer pays all the money to the developer. The seller and buyer are not in a rush to register at the Land Dept. as the buyer lives overseas. The bank forecloses on the building the following year and the money is gone.

Could go on and on…. You get the picture. Please be careful and do a search.

www.sunbeltasiagroup.com

[old wanderer]

I have to add my kudo's to Sunbelt.....I (my wife) recently purchased 38 rai of land. I had then do a title search to insure the seller was the real owner, and there were no leans on the property. Their representative then traveled to the land office (in Kaeg Koi) on the morning of he sale, knew when to just sit quietly, and when to intervene, read each document answered all my questions. We were done in a little over an hour. Left with the Chanote in hand.

Why when people are investing some millions of baht in property why they do not involve professionals that work in this business everyday, and instead try to save some truly insignificant amount of baht by doing it themselves or relying on a wive/gr that has never owned a piece of property in their lives just totally baffles me.

One of the interesting side notes of this transaction, some of the people that were involved with the seller, including one that was an attorney, everyone wanted to know "How much you pay for Bangkok attorney"?

Finally my wife had to just bluntly tell them it was a Farang custom, and her husband says it is none of your business. Uniformly everyone told us, when we started with the title search....no problem, you do not need to pay money to an attorney...yada yada, yada....For me for the piece of mind it was an excellent investment.

In our case everything was in order, but if it was not, I am sure they would have intervened, and we would not have lost any money.

[quiksilva]

Interesting stories, Sunbelt there's so many different scams, one I come across occasionally is the landlocked parcel.

It happens like this, you are shown an awesome piece of land, typically in great locations with what appears to be main road frontage, at a very fair [even cheap] price. The buyer then rushes in to seal what appears to be the deal of the century, forgetting the old adage of "if its too good to be true it probably is".

Some dubious landowners sub-divide parcels leaving a 1-2m wide strip along the main road, which the buyer is now effectively forced to buy at an exorbitant price.

Its a very, very easy scam to avoid, but people frequently fall for it and pay.

Yes, the civil and commercial code grants some access rights for landlocked parcels but securing these rights this way is a lengthy, expensive process, that could easily have been avoided if one took the trouble to do a seek professional advice right at the outset.