30-year Property Lease Agreement

[zazaza]

Can anybody help with preparing a 30-year lease on the land in Hua Hin on which my house is built? Briefly, the land is owned by a limited company in which I have a 38% holding, my daughter (Thai) has 16% and my girl friend has 45%. Four others share the balance of 1%. This gives me some element of protection in that my daughter and I acting in concert control the majority of shares.

However, in the event that something awful happens to my girl friend I do not want to find my self in conflict with her family over the shares in her name. I believe that if the company gives me a 30-year lease then at least I have the protection of not being forced to sell or leave the property.

I have approached several law firms but the lowest cost quoted for preparing a lease was THB 40,000 with the highest at THB 60,000. I think this is extortionate and I wonder if any other member could provide me with a copy of a draft lease so that I can revise & amend it myself before having it translated into Thai and then registered at the local land office.

[apetley]

Go along to your local Amphur They can set one up for you or give you a copy of a lease/usufruct.

Lot cheaper than 40k.

[ThaiLawOnline]

There are law firms doing it for much less. Guess who?

If you use a form for a lease or a usufruct, there are many clauses that won't be in your contract.

In a professional contract, clauses are adapted to the situation of the clients.

[Irene]

zazaza,

below you should find it of interest:

Thailand Forum _ Real Estate, housing, house and land ownership _ Registered An Usufruct

Posted by: crewcut 2007-11-04 09:47:58

Last week I went to the land office and enquired about the possability of having a usufruct contract made between me and my wife with regards to a property we have recdently built. At first the gentleman we spoke with was unsure of how to help us, my wife then mentioned the Thai name for this process; sit-ti-gep-gin.

We made the relevant photo copies (pasport, ID, marriage, tabien ban and letter of permission to build a house on the land). The contract used was a standard document which allows me to stay in the house rent free until I die. It turns out that I was the first foriegner to ask for this to be done at their office and because of this they had to check the manuals of how to put this together and the paper work needed.

Now whether this standard contract is as full proof as one a lawyer may have drafted I don't know, but after researching this matter and thinking of my own requirements I decided following this process was the best option for me.

My wife and I have been married for 10 years and I have no reason to belive that she would ever be unfair with me if we were to split. All I wanted was something legal and official done with her approval so she would understand/think that I have rights on the property also. Knowing her, if we did split she would never question this document let alone hire a lawyer to do it for her.

You may ask why did you bother going through this process if you trust her and have no reason to doubt her future fairness?

Well the whole process at the land office took just over an hour to sort and cost me 75 baht.

I had quotes from several lawyers ranging from around 10,000 for a contract drawn up and telephone support to 70,000 for a lawyer to come with me and do the process for me. Like I said before I'm sure these contracts may have had more clauses etc, but in my situation the do-it yourself-option was the best solution.

I would encourage others who are thinking about getting an usufruct to inquire about this same process and save a few baht. If you do want other clauses added have them prepared ahead of time and expect the process to take a bit longer.

[mrbojangles]

The contract used was a standard document which allows me to stay in the house rent free until I die.

Could someone please confirm this to correct. I believed that there had to be a fee paid by the person leasing the land (even if it's the husband) and had to be at market value not nominal, otherwise it couldn't be construed as being rented.

Yeah, i know, you pay the wife and she gives it back but these little things are what trip us up

[Irene]

The contract used was a standard document which allows me to stay in the house rent free until I die.

Could someone please confirm this to correct. I believed that there had to be a fee paid by the person leasing the land (even if it's the husband) and had to be at market value not nominal, otherwise it couldn't be construed as being rented.

Yeah, i know, you pay the wife and she gives it back but these little things are what trip us up

mrbojangles,

My post was meant for you to pursue on your own another route instead of leasing. I used to think that leasing was superior to usufruct until I saw this posting of crewcut. Since then I changed my mind and believe that usufruct agreement is better, cheap and better protection. Usufruct agreement was originally designed for orchards where the grantee is entitled to take charge of the fruits of the land for sales and it can be lifelong and not based on period. There have been many foreigners using this route through their lawyers. But crewcut was even better since he got the land officials to help him to effect the agreement. I personally made informal enquiry with the land department and had the impression that it is now part of the system for the officials to help the public to have this type of agreement effected. They even have a standard agreement for you to fill in. Go to the land department with a trusted Thai speaker to find out first.

[ThaiLawOnline]

There are several options for foreigners in real estate. A freehold condominium is safe, it's under your name.

But if you are talking about land, foreigners can't own land in Thailand. But you can own the building, the structure...

A FREE rent doesn't exist in Thailand. A lease contract must have a rent. But a usufruct contract can be done for free.

It is similar but different.

Now, there are factors to consider before deciding which contract would be the best for you. Your age, your heirs, the relationship you have with your Thai wife (for example), if you are legally married or not, where is the property, the investment to be made, etc. The fees to register a usufruct agreement or a lease agreement are low and not the same in all land department. Contracts must be made at least in Thai but if you can't read it...This is why we do bilingual contracts.

Anything that is NOT illegal (or against public interest) can be added in an agreement. If you are not married and decide to buy land, I would add a clause in the usufruct stating that buildings or structures added to the land will become part of the asset of the usufructuary, for example. You can add clauses for insurance, etc.

If you decide to make a lease agreement, there are taxes to be paid on the rent (12.5%) and many clauses can also be added to protect you as much as we can.

[thai_narak]

zazaza,

below you should find it of interest:

Thailand Forum _ Real Estate, housing, house and land ownership _ Registered An Usufruct

Posted by: crewcut 2007-11-04 09:47:58

Last week I went to the land office and enquired about the possability of having a usufruct contract made between me and my wife with regards to a property we have recdently built. At first the gentleman we spoke with was unsure of how to help us, my wife then mentioned the Thai name for this process; sit-ti-gep-gin.

We made the relevant photo copies (pasport, ID, marriage, tabien ban and letter of permission to build a house on the land). The contract used was a standard document which allows me to stay in the house rent free until I die. It turns out that I was the first foriegner to ask for this to be done at their office and because of this they had to check the manuals of how to put this together and the paper work needed.

Now whether this standard contract is as full proof as one a lawyer may have drafted I don't know, but after researching this matter and thinking of my own requirements I decided following this process was the best option for me.

My wife and I have been married for 10 years and I have no reason to belive that she would ever be unfair with me if we were to split. All I wanted was something legal and official done with her approval so she would understand/think that I have rights on the property also. Knowing her, if we did split she would never question this document let alone hire a lawyer to do it for her.

You may ask why did you bother going through this process if you trust her and have no reason to doubt her future fairness?

Well the whole process at the land office took just over an hour to sort and cost me 75 baht.

I had quotes from several lawyers ranging from around 10,000 for a contract drawn up and telephone support to 70,000 for a lawyer to come with me and do the process for me. Like I said before I'm sure these contracts may have had more clauses etc, but in my situation the do-it yourself-option was the best solution.

I would encourage others who are thinking about getting an usufruct to inquire about this same process and save a few baht. If you do want other clauses added have them prepared ahead of time and expect the process to take a bit longer.

can anyone translate this (bold above) into thai?

[thai_narak]

There are several options for foreigners in real estate. A freehold condominium is safe, it's under your name.

But if you are talking about land, foreigners can't own land in Thailand. But you can own the building, the structure...

A FREE rent doesn't exist in Thailand. A lease contract must have a rent. But a usufruct contract can be done for free.

It is similar but different.

Now, there are factors to consider before deciding which contract would be the best for you. Your age, your heirs, the relationship you have with your Thai wife (for example), if you are legally married or not, where is the property, the investment to be made, etc. The fees to register a usufruct agreement or a lease agreement are low and not the same in all land department. Contracts must be made at least in Thai but if you can't read it...This is why we do bilingual contracts.

Anything that is NOT illegal (or against public interest) can be added in an agreement. If you are not married and decide to buy land, I would add a clause in the usufruct stating that buildings or structures added to the land will become part of the asset of the usufructuary, for example. You can add clauses for insurance, etc.

If you decide to make a lease agreement, there are taxes to be paid on the rent (12.5%) and many clauses can also be added to protect you as much as we can.

what if legally married and have childrens? i still need an usufruct, don't i?

[Irene]

can anyone translate this (bold above) into thai?

sit-ti-gep-gin. สิทธิเก็บกิน

Pronounced as "sit-tid-kep-kin"

Literally it means "the right to reap the benefits" of the land e.g. to harvest or pick fruits of the orchards or the right to inhabit on the land.

[thai_narak]

sit-ti-gep-gin. สิทธิเก็บกิน

Pronounced as "sit-tid-kep-kin"

Literally it means "the right to reap the benefits" of the land e.g. to harvest or pick fruits of the orchards or the right to inhabit on the land.

thanks irene, i will take note of this...

Edited December 13, 2007 by thai_narak

[mrbojangles]

A FREE rent doesn't exist in Thailand. A lease contract must have a rent. But a usufruct contract can be done for free.

It is similar but different.

Thanks for clearing that up

BTW, where are you based Isaanlawyers

[ThaiLawOnline]

I will answer quickly.

If legally married, 1469 may apply. This is the same for a lease or a usufruct.

Actually, you can ask many Thai lawyers and they don't have the same interpretation of 1469 and I never seen it in practice.

For children, depending if they have Thai nationality or not, their age, your asset, your can decide to give them something or not at your death. You must think about inheritance. That's why it's important to know your situation, just not about the property.

A lease can't be done for free. Article 537 states that you must give a rent. Max 30 years with option to renew (art.540)

If it's for free, then, it becomes a gift!!! (article 521). But you can't give LAND to a foreigner...

This is why in civil law, you separate Usus, fructus and abusus. Meaning you can use the land if the owner wants...or use and collect the fruits (usufruct). For a limited period of time or the rest of your life.

A usufruct can be done for free (the owner gives you this right for free or for some money) art. 1417 and following.

[zazaza]

There are law firms doing it for much less. Guess who?

If you use a form for a lease or a usufruct, there are many clauses that won't be in your contract.

In a professional contract, clauses are adapted to the situation of the clients.

Ok, I'll take the bait! Please give me a price for preparing for me a 30 year lease agreement. I'm located Hua Hin.

You can send me a private reply to [email protected].

Regards

[ronswelters2]

Can enforceable leases or usufruct contracts (which are presumably annotated on the title deed) be made on property which carries a bank loan already registered on the title deed?

Thanks for any advice.

Edited December 22, 2007 by ronswelters2

[Thighlander]

I got a 30 year pre-paid lease on property owned by my nominee. A bit of a grey area on this is the amount of the rent. We tried for 300,000 for 30 years--10,000 per year, but the office said too low. They did accept 500,000 for 30 years. We had to pay a 1% tax on that--it is now a part of the chanot. I was told, as mentioned above, there is a 12.5% rental tax, but I also heard it is rarely collected. If it were, that would be 2000 thb per year. This is on a pretty small, but nice, home, in a great, well-known moo-baan. My total legal fees were 20,000, plus the fees at the Amphur. I'll keep my fingers crossed, but it all seems pretty kosher.

[selftaopath]

zazaza,

below you should find it of interest:

Thailand Forum _ Real Estate, housing, house and land ownership _ Registered An Usufruct

Posted by: crewcut 2007-11-04 09:47:58

Last week I went to the land office and enquired about the possability of having a usufruct contract made between me and my wife with regards to a property we have recdently built. At first the gentleman we spoke with was unsure of how to help us, my wife then mentioned the Thai name for this process; sit-ti-gep-gin.

We made the relevant photo copies (pasport, ID, marriage, tabien ban and letter of permission to build a house on the land). The contract used was a standard document which allows me to stay in the house rent free until I die. It turns out that I was the first foriegner to ask for this to be done at their office and because of this they had to check the manuals of how to put this together and the paper work needed.

Now whether this standard contract is as full proof as one a lawyer may have drafted I don't know, but after researching this matter and thinking of my own requirements I decided following this process was the best option for me.

My wife and I have been married for 10 years and I have no reason to belive that she would ever be unfair with me if we were to split. All I wanted was something legal and official done with her approval so she would understand/think that I have rights on the property also. Knowing her, if we did split she would never question this document let alone hire a lawyer to do it for her.

You may ask why did you bother going through this process if you trust her and have no reason to doubt her future fairness?

Well the whole process at the land office took just over an hour to sort and cost me 75 baht.

I had quotes from several lawyers ranging from around 10,000 for a contract drawn up and telephone support to 70,000 for a lawyer to come with me and do the process for me. Like I said before I'm sure these contracts may have had more clauses etc, but in my situation the do-it yourself-option was the best solution.

I would encourage others who are thinking about getting an usufruct to inquire about this same process and save a few baht. If you do want other clauses added have them prepared ahead of time and expect the process to take a bit longer.

Thanks so much. I suppose I can use the local land office in Isaan. My g/f also thought we could do this by signing a document at the land office. This would eliminate the need for a lawyer. I am amazed to hear the Bt 75 vs the Bt 16, 000.00 that the lawyer wanted

Thanks again. Oh and I love ThaiVisa. I found this by doing a google search. Guess I could have gone directly to Thaivisa.com.

[mickba]

I got a 30 year pre-paid lease on property owned by my nominee. A bit of a grey area on this is the amount of the rent. We tried for 300,000 for 30 years--10,000 per year, but the office said too low. They did accept 500,000 for 30 years. We had to pay a 1% tax on that--it is now a part of the chanot. I was told, as mentioned above, there is a 12.5% rental tax, but I also heard it is rarely collected. If it were, that would be 2000 thb per year. This is on a pretty small, but nice, home, in a great, well-known moo-baan. My total legal fees were 20,000, plus the fees at the Amphur. I'll keep my fingers crossed, but it all seems pretty kosher.

My GF was recently not a little upset when she went to sort some tax issues only to find that the tax man was looking to collect on the 1,400,000 advance rent she'd "received" from farang -

They told her she make big problem for future - cheered me up no end to know that at least the Lease is properly in the system.

The rest of the tale is still unfolding, but I think my vote today would be for the Usufruct - ah well...........perhaps next time.

Edited December 20, 2008 by mickba