30-year Property Lease

[llso]

If you have a 30-year properly registered property lease with tax paid can the Thai owner use that property as collateral for a bank loan without your permission.

LL

[dr_Pat_Pong]

What does the lease agreement say about it ?

[llso]

Hi DR. PP,

Thanks for the reply. THis is just a hypothetical question. In thinking about this situation I thought of that scenario. So I would imagine that there should be such a clause in a lease agreement concerning borrowing against the property.

My question is I guess would a bank or lending institution be able to check if a particular property had a 30-year lease to someone on it.

THanks,

LL

[Tornado]

My question is I guess would a bank or lending institution be able to check if a particular property had a 30-year lease to someone on it.

THanks,

LL

The lease agreement should be registered with the land office and the land title should have this written on the back of the title. In my limited experience, this is normal practice, but a lawyer should be able to give you a better reply than mine.

[dr_Pat_Pong]

To be valid a lease of this length of time needs to be properly registered to be valid. Most 30 year leases are for the protection of the obviously unregistered farang who put up the money in the first place. It doesn't need a genius lawyer to draft a sensible lease, but it does need one with a bit of nouse to do it properly. Don't stint on the expense and risk a second rate job. As the lease is basically a charge on the land, particulars of its existence will be shown on the title.

[llso]

Thank you very much for the replies. So if the lease agreement is properly noted on the land title there should not be any problem.

LL

[dr_Pat_Pong]

Thank you very much for the replies. So if the lease agreement is properly noted on the land title there should not be any problem.

LL

PM me and tell me the circumstances of the proposal. Is the wife or GF to be the registered proprietor.

[ProThaiExpat]

I have always been interested in the value of land in Thailand burdend with a 30 year lease.

I doubt if a bank would loan much money, if any, on property it cannot re-posses and sell to recover their collateral for thirty years.

[dr_Pat_Pong]

I have always been interested in the value of land in Thailand burdend with a 30 year lease.

I doubt if a bank would loan much money, if any, on property it cannot re-posses and sell to recover their collateral for thirty years.

Default on the mortgage by the mortgagor could well give rise to the extinguishing of the lease, unless the mortgage recognizes the prior claim of the lessee. The issue could be complicated.

[mickba]

dr_Pat_Pong

If the Lease has been properly registered and recorded on the back of the Chanote then how could a Mortgage fail to take note of it?

[quiksilva]

dr_Pat_Pong

If the Lease has been properly registered and recorded on the back of the Chanote then how could a Mortgage fail to take note of it?

Correct, the landlord would find it very difficult to us it as collateral for a loan except under special circumstances where the bank could control the lessee too, (say, where his own company is leasing it from him).