"hypothetical" Way For Farang To Aquire Land...

[Marvo]

Hypothetically.....

Let's say a farang wanted to "aquire" a piece of land in LOS. He knows that farang are not allowed to own land in Thailand. He knows that the Foreign Business Act is now being more forcefully enforced in relation to foreigners illegally using Thai "nominee" shareholders as a workaround so the company route is not a dead cert.

This "hypothetical" farang could buy the land in a Thai's name and lease the land back.

The questions this farang has about doing this are...

i) Could he "lend" this money to the Thai with a legally drawn up loan aggreement with conditions of the loan being that the money loaned is soley for the purchase of a certain piece of land.

ii) Is it legal for a Thai to buy land in their own name using money loned to them by a foreigner?

ii) Is it possible/legal to stippulate as part of the loan aggreement, that if that land were to be sold, then the loan has to be repaid with the interest on the loan being the gain in the value of the land (minus all obvious land sale taxes)?

This "loan" would involve the farang transfering a substancial amount of money from overseas into his Thai baht account in Thailand. He's transfered £3,000 a couple of times with no problems or questions asked.

iv) Could someone point out to him if he'll hit any complications transferreing £75,000? People on this board have talked about "retension" or taxes????? Does he get the whole £75,000 appear in his account in baht?

v) Additionally, if a foreign Exchange certificate is obtained, does that mean there would be no problem sending the cash back out of Thailand in the future?

iv) If he wants to send £ stirling out of Thailand, what rate (i.e. on/offshore) do the bank convert his baht at?

This farang has got a huge mountain to climb gaining the knowledge he'll need if he's ever going to live in Thailand. He knows this is a bit of a bombardment with questions but you guys and girls out there are all so helpful, and he really appreciates any help you can give him (and any other browsers) with his education.

[quiksilva]

Its certainly legal for the Thai to purchase land with money that was lent to them by the foreigner. Just so long as they are not a nominee shareholder of the same firm!

If taking this route, the foreigner would want to have a lawyer draft a very strict mortgage agreement, with the land being held as collateral against the loan. This way the foreigner could block any future sale of said title.

Its difficult to link interest rates to land values as their is no official index that is accurate. You might be able to link it to changes in government's appraised value, but they rarely reflect true open market value, so perhaps you would be better off using the average of two appraisals or simply apply a rate that you think is fair, right at the outset.

[eljeque]

Rent

[ProThaiExpat]

quicksilva is spot on as usual! My 30 year lease back is structured exactly that way, loan the money to the Thai and obtain a mortgage in return. Rent the property from the Thai with mortgage payments equaling the rent payments so you have a wash on the money exchange. Strong penalty provision for disturbance of "quiet enjoyment".

Likewise, one can employ a balloon payment of the mortgage at end of lease period or any acceleration thereof.

Additional provision of acceleration of balloon payment for any disturbance of quiet enjoyment or dispossession for any reason.

You will have to negotiate the tax payable on the rent payments even though no money passes and there are fees at the land office for each document recorded.

Your mortgage and the lease are clearly lodged on the back of the chanote at the land office so all are on notice of the encumberances on the property, which effectively makes the property nontransferable except by gift, but the subsequent holder of the chanote is bound by the recorded documents. If the acceleration clause is well drafted, even if a gift is attempted, the mortgage becomes immediately payable as does the penalty provision.

[PattayaParent]

"Theoretically" fine, I've thought about it myself.

But then what happens after the 30 year lease runs out and the Thai doesn't want to extend it?

And what if the Thai dies in the meantime and his family want you off 'their' land.

Or what if you want to sell the land to get your money back and the Thai or their family doesn't want to?

[BL4u]

This structure is not theoretically fine as it is illegal to use Thai nationals to buy land on your behalf or use Thai nationals to buy land as your agent.

If you are a foreigner the land offices in Thailand will generally not register a mortgage to secure your loan agreement. Especially not if this is combined with a lease.

If your nominee land owner dies the agreements or clauses in the lease to protect your investment will not pass to the heirs.

You cannot prevent the land owner from selling the property, as in if you would, you will probably be deemed the actual owner by the land department and the Thai national your agent. In this case you risk fines and even imprisonment. Meaning, if you have problems with the nominee owner or heirs you do not want to explain the set up.

If you would explain this legal set up in Court (it will likely be deemed void) or the Land Department will deem that the Thai national has acquired the land under section 96 of the Land Code - he acquired land as the owner in place of an alien. And according to section 113 - any person who acquires land as an agent of an alien or juristic person under the provisions of Section 97 or 98 shall be punished with a fine not exceeding twenty thousand baht or an imprisonment not exceeding two years, or both.

This is not an alternative for land ownership and you must be very careful with this structure.

Edited January 18, 2008 by BL4u

[ProThaiExpat]

While the preceding post speaks in a very authoritative manner, the opinions contained therein are in conflict with quicksilvas advice and he is a very respected BKK real estate Broker.

Likewise, the opinion conflicts with the many Thai lawyers who have drafted lease agreements and mortgages for falang whose property is held in the name of their unmarried partners.

A Thai judge I know has reviewed my lease, mortgage and clauses refered to in my post and concurs that they would be very persuasive if ever reviewed by a competent Thai judge.

I just don't see how one can contend that a loan to a Thai person to buy land in his own name in which a lease is given back to the benefactor/falang would be considerered void because the Thai person would somehow be converted into an agent of the falang by the process, since there are no indices of control between the falang and the Thai to establish an essential element of agency.

[quiksilva]

edit: PTE's explanation of the linkages between the parties are better.

I'll just add that this structure does not even begin to come close to a fee simple absolute interest. In this case you get the right to inhabit and enjoy the premises, under the lease, and can block a sale if needs be.

Are there still risks, yes of course there are, you dont own the freehold, and some of these risks have been pointed out above. However, by acting as a mortgagor, many (but not all) of the risks are mitigated.

Are they mitigated enough, for your tastes? Well thats something that only you and your lawyer can decide.

Edited January 18, 2008 by quiksilva

[Khun Jean]

Land can raise in value very quickly. A mortgage can be paid of and the remainder is profit for the owner.

Only thing left is the 30 year lease. Don't count on any extensions. How old are you in 30 years?

But if that is enough, why not.

Would a mortgage be possible with only paying the interest? That would at least keep the initial value 'mortgaged' and retrievable when sold.

[PattayaParent]

Only thing left is the 30 year lease. Don't count on any extensions. How old are you in 30 years?

But if that is enough, why not.

A usufruct is vailable for life isn't it?

[WilliamJarvis]

I don't doubt PTE and QS's authority on this matter, but as of last year Bank of Thailand regulations would only allow foreign financial institutions to register a legally enforceable mortgage. To constitute a "foreign financial institution", the organisation in question had to be licensed as a financial institution in its country of incorporation.

Moreover, foreign financial institutions with legally enforceable mortgages could not foreclose on the mortgage, but rather had to sell the mortgaged property at public auction. In this regard, the debtor is not precluded from bidding at such public auction.

I have not been involved in the Thai property market for some time, and things tend to change quickly. However, while I would say the above structure could be put in place, I would be reluctant to state that it was enforceable.

An additional issue with regard to "nominees" is that, as BL4Ucorrectly points out, this is not restricted to shareholders. Under the Land Code it is a criminal offence for a Thai national to act as a nominee for a foreigner purchasing land. Sometime ago, the government issued a regulation to Land Depts. around the country stipulating that Thai nationals buying land where rent of that land was to be made to a foreinger needed to show "proof of funds". IOWs, the Thai had to show evidence of where the funds had come from to purchase that land.

Just before I left Thailand I had a Thai wife and foreign husband client buying land in Minburi. Even though the foreign husband had signed a waiver saying the money was his wife's (which it was), because the money had come from their joint account in USA to purchase the property, the Land Dept. in Minburi refused to register the land in her name as they claimed she could not prove that the source of funds were hers. At the same time I had another couple who did exactly the same thing but in Issaan, and the Land Dept. there did not blink an eye-lid. So again, while I would say it was doable, I would not say it was doable in all cases.

Edited January 24, 2008 by WilliamJarvis

[quiksilva]

Good post, I thought you might find this interesting.

Can a foreigner hold a mortgage on land in Thailand?

A foreign individual can hold a mortgage on land in Thailand. The Land Code only prohibits foreign ownership of land. There is no similar provision regarding a foreigner being a mortgagee. Under Thai law, in the event of foreclosure of a mortgage, the mortgagee must sell the land at public auction. A foreign mortgagee could not purchase the land at the auction, but he can retain the proceeds of the sale to repay the debt secured by the mortgage. So, a foreigner’s holding a mortgage on land does not risk violating the prohibition on foreign ownership.

A foreign company cannot hold a mortgage on land in Thailand. Land Office policy considers the lending of money secured by mortgage to be an aspect of the “business of banking”. In order to engage in the business of banking in Thailand a company must be a financial institution licensed to do business in Thailand, so a foreign company cannot qualify. Similarly, a Thai company cannot hold a mortgage in Thailand unless it is licensed as a financial institution.

BSA Law

Edited January 24, 2008 by quiksilva

[WilliamJarvis]

^interesting.

I seem to recall, however, that loans with security of real property (such as a mortgage) constitutes "banking business" under the Commercial Banking Act (CBA).

I could be wrong and would readily accept that. I would also readily accept that things in Thailand have changed. For no other reason than I cannot seem to see a piece of [Thai] legislation that was not in some way or another either changed or thought of being changed under the last government.

[WilliamJarvis]

I should add that the "licensed to do banking in Thailand" in the article you quote is wrong.

I know this because I registered a mortgage in favour of ANZ, who have no presence in Thailand. In that case, the BoT asked us for evidence that ANZ were a licensed bank in their country of incorporation. Again, however, there was a stipulation that enforcement meant sale buy auction and that ANZ could not hold title to the property.

Given Thailand's Draconian foreclosure laws, this did not bother them [ANZ].

Edited January 24, 2008 by WilliamJarvis

[donx]

So a farang, as an individual, holds a mortgage on land that his/her Thai partner makes payments against. The land is in a small rural village. After a few years of bliss, the relationship deteroriates and the Thai partner refuses to make monthly mortgage payments and kicks the farang off the property. The mortgage is in default and the farang now has to sell it by auction. At the auction, the only people that show up are the relatives of the Thai partner. There is only one bid on the property and it is for 1/20 the original price of the property. If the farang is allowed to reject this low bid, what happens? Do another auction one month later with the same result? How long can this go on? One year maybe? In the end, the Thai partner ends up with the property at 1/20 its original purchase price.

Anyone care to comment on this hypothetical situation?

[Khun Jean]

^ So don't go live in the sticks or use a usufruct/lease.

Another example:

foreign individual holds a mortgage on a prime piece of land in central bangkok. After a few years of bliss, the relationships deteriotaes and the Thai partner sells the land with a 500% profit. Pays of the mortgage and kicks out de foreigner.

Get a lease/usufruct, just rent something or buy a condo.

[lioness]

You are getting lots of advice, however I hope you take care to speak with a lawyer, you are talking a reasonable amount of money so you don't want to end up loosing it.

Pay attention to title, the only one that is reconised by banks and Land administration is a Chanort, this is the only one that can have a lease attached and is good for a 30+30+30 year lease situation, I take it you will be dead in 90 years time and not much fussed about what happens to it then.

You can provide the funds for the purchase of the property and have a lawyer draw up a possessory right which gives you total control even though the land is not in your name. You will of course own any improvements on it.

Another way is to lease land and build ( or buy ready built ) then the whole lot stays in your name and you have total control. I know of 2 such developments in the central region ( selling for around 45,000 sterling, house and land, If you would like more details please pm me.

Lastly take care how you transfer the funds and make sure you keep the transfer document if you may want to take the money out again. The exchange rate fluctuates so you will need to check that with the bank.

Take care and best of luck

[ProThaiExpat]

The last hypo disconnected the mortgage from the lease. Not the idea. The lease is the primary document you rely on for possession. Yes, many prefer the usurfuct. In any case, the mortgage and lease provisions are security devises to make it more difficult for anyone to disposes the falang. Mortgage payments are not important in an of themselves as a lump sum payment at the end of the lease can also be used, thus keeping the full amount of the mortgage in place to discourage transfers of the property. Penalty provisions in the lease for violation of peaceful possession can also be used to discourage relatives attempting dispossession.

A few years ago there was a post about a falang who was dispossesed by relatives and he won in court. I believe it was just a basic lease that he sued on.

I had never heard of a usurfuct before coming to Thailand but understand it provides in essence is a "life estate". I do recall my lawyer put a provision in my lease that made it a "life estate". Perhaps a merger of usurfuct language and lease language in the same document is possible, after all, it is not the "label" on the document that controls in court, it is the basic provisions. I was surprised when my lawyer said I could stay on the property for my natural life. However, since that will surely end before the lease term, I have little concern for the provision.

[quiksilva]

I should add that the "licensed to do banking in Thailand" in the article you quote is wrong.

I know this because I registered a mortgage in favour of ANZ, who have no presence in Thailand. In that case, the BoT asked us for evidence that ANZ were a licensed bank in their country of incorporation. Again, however, there was a stipulation that enforcement meant sale buy auction and that ANZ could not hold title to the property.

Given Thailand's Draconian foreclosure laws, this did not bother them [ANZ].

Actually ANZ do have a presence here although only as a representative office. Australia & New Zealand Banking Group (representative office) 9th Floor Diethelm Tower A

William, seeing as you are calling out that 'mistakes' made by BSA Law on their website (from which I quoted). I think it would be a great service to the readers of TV to share your credentials too.

[beginner]

The last hypo disconnected the mortgage from the lease. Not the idea. The lease is the primary document you rely on for possession. Yes, many prefer the usurfuct. In any case, the mortgage and lease provisions are security devises to make it more difficult for anyone to disposes the falang. Mortgage payments are not important in an of themselves as a lump sum payment at the end of the lease can also be used, thus keeping the full amount of the mortgage in place to discourage transfers of the property. Penalty provisions in the lease for violation of peaceful possession can also be used to discourage relatives attempting dispossession.

A few years ago there was a post about a falang who was dispossesed by relatives and he won in court. I believe it was just a basic lease that he sued on.

I had never heard of a usurfuct before coming to Thailand but understand it provides in essence is a "life estate". I do recall my lawyer put a provision in my lease that made it a "life estate". Perhaps a merger of usurfuct language and lease language in the same document is possible, after all, it is not the "label" on the document that controls in court, it is the basic provisions. I was surprised when my lawyer said I could stay on the property for my natural life. However, since that will surely end before the lease term, I have little concern for the provision.

Here is the final result of legal shenanigans in Naklua. It might be a very good idea to rent.

German man gunned down From Pattaya City News

Heinrich Hermann Friedrich aged 63 from Germany was found dead lying in the road next to his motorbike and initial inspections determined the victim had sustained four gun shots.

His current partner, Khun Nantha aged 25 soon arrived at the scene. The pair had been together for 1 year 8 months.

Freidrich was previously married to Khun Roongnapar aged 32. Khun Nantha explained that Freidrich had purchased the house he and his new partner were living in at a cost of 5 Million Baht.

This house was purchased in the name of Khun Roongnapar. The house was then leased to Freidrich for a period of 30 years. When the pair split, Khun Roongnapar initiated a civil lawsuit to recover her asset and remove Freidrich from the house. She subsequently lost the case and Freidrich was permitted by the court to remain in the house.

Witnesses mentioned hearing four shots and saw two men on a motorbike following the victim moments earlier who double-backed after the shooting and appeared to check the victim to ensure he was dead. No items were stolen suggesting this may have been a contracted killing. Police are now investigating this murder and at the moment are exploring all possibilities.

I imagine that the hypothetical person in the op has a partner 'who is different'.

But this is Thailand.

[WilliamJarvis]

William, seeing as you are calling out that 'mistakes' made by BSA Law on their website (from which I quoted). I think it would be a great service to the readers of TV to share your credentials too.

I wasn't aware I was trying to sell a service to the readers of TV...

...but merely pointing out that I believe that information is incorrect.

Nonetheless, even if ANZ have a Rep. Office in Thailand, they're not "licensed to fo banking business" there. Which was the point I was trying to make.

However, if, at any time, either via PM or public post, I attempt to sell my "services" to the members of TV, I'll freely let them know what my credentials (if any) are.

But as I no longer live in Thailand, if anyone were to asked me for advice, I would more than likely refer them to Greg at Sunbelt in any case.

EDIT: not that it really matters, because, as I said, I no longer live in Thailand, but my UN rather gives me away. A quick search on my name will lead you in the right direction.

Edited January 25, 2008 by WilliamJarvis

[Khun Jean]

You are getting lots of advice, however I hope you take care to speak with a lawyer, you are talking a reasonable amount of money so you don't want to end up loosing it.So please disrecard everything i say here below

Pay attention to title, the only one that is reconised by banks and Land administration is a Chanort, this is the only one that can have a lease attached and is good for a 30+30+30 year lease situation, I take it you will be dead in 90 years time and not much fussed about what happens to it then. Never heard of nor sor sam kor? And only 30 years is guaranteed, and yes you can live longer than those 30 years and yes you would care what happens after you die, like willing it to your children (impossible)

You can provide the funds for the purchase of the property and have a lawyer draw up a possessory right which gives you total control even though the land is not in your name. You will of course own any improvements on it.You never have full control, only limited until 30 years guaranteed, unless you use a usufruct then it is for your live, but still FULL control would also mean selling it whenever you want, leaving it for your children, etc. You would own the improvements, they are only worth a little bit because the land it sits on is not yours.

Another way is to lease land and build ( or buy ready built ) then the whole lot stays in your name and you have total control. I know of 2 such developments in the central region ( selling for around 45,000 sterling, house and land, If you would like more details please pm me. RED FLAGS!!!!

Lastly take care how you transfer the funds and make sure you keep the transfer document if you may want to take the money out again. The exchange rate fluctuates so you will need to check that with the bank.

Take care and best of luck

Sounds like typical developer/broker/lawyer (with interest in selling) talk.

Unfortunately this kind of talk actually works. Many people accept this BS as the truth because the ones who tell this are assumed to be professionals. Many forget that in a previous live most developers/brokers where working in the post office sorting mail or some other hard job that has nothing to do with what they are doing here.

So many sites, brokers tell this same 30+30+30 year story and often use the word FULL CONTROL that it is scary. The few i visited and told me this i laughed at them in their face and walked out of the office wishing them good luck, because karma WILL get you.

So instead of listening to those folks why not try to read some real written laws. It is not that hard and everything is available in English.

I did that and can counter every BS that is told to me. It works because very quickly they change their sales talk, so they DO know what is the real law.

They really don't like the real law because it makes selling so much harder.

Edited January 25, 2008 by Khun Jean

[Marvo]

Can I, at this stage in the thread, say a big thanks to you all for your intelligent postings. I have spent much time doing a lot of background research to build my knowledge of how things work in Thailand so that I stand a chance of understanding and correctly interpreting the information I get from you guys and gals.

I am reading and taking in all of your words of wisdom, building a bigger mental picture of all the possible options to protect an upcoming "investment" in Thailand. My perspective is not to be expecting a financial return on the investment but a return in the form of a secure enjoyment of "my home" for the rest of my natural life (30,40,50 yrs??? - maybe less if I chose to live in Pattaya, thanks Beginner ;-).

I'm looking for a more developed "intelligent" way of doing things, beyond the obvious 30 yr lease option. The life usufruct in addition to a 30 yr lease sounds like a good start. I've already got some pointers from Sunbelt's site.

And adding to this, I like PTE's mortgage concept (you seem to know your stuff!) but I'll need to give this thread a few reads through to take it all on board and understand fully. I especially like the posibility of "tailoring" the terms to my advantage (I'm still trying to get my head around those options too). Is it possible to set up a mortgage (when everyone is amicable) where

i) the 30 yr mortgage is only for a final small % value of the land.

ii) the payments are interest only and can be made in advance (preventing the arrears issue).

But I worry then that the mortgage could be (maybe unknown to me) settled early.

As I understand it, all that I'm trying to do is to make it as unattractive and difficult as I can for anyone potentially interested in buying the plot from it's legal owner (which without saying cannot be me in Thailand). I guess I'll need a lawyer who really kows his onions regarding foreigners and mortgages.

As Quicksilver points out, this is about the mitigation of risk, and at what point an individual is content with his lot. If I am able to arm myself with ALL the facts (correct facts that is, not always easy in Thailand) then I will be able to put into place an arrangement, with which I am at piece. As long as I don't ever want to sell up or will the land to my (non-existant) children then a 30 yr lease with life usufruct with additioal protection by mortgage should see me happily living in my dream home to my grave. (It's the mortgage bit that I just need the finer points of explaining a little more).

Khun Jean, you talk my language. You go about business and anylise exactly the way I like to. I like your style, thanks for your time and your input.

I know a lot of sceptics keep ranting... "a foreigner cannot own land in Thailand, just rent and be happy", but if the decision is between:

i) living the rest of my life "making do" in less than perfect accommodation, in a location that I don't find ideal and living with the threat of being moved on by landlords at their whim, or,

ii) living the rest of my life at piece in a purpose built dream home on a plot with a view to die for...

Over 30 years, hopefully more, I can tell you now which option will be cheaper, given what rents are likely to be, in up and coming areas, 20 years from now!

I guess really, option (ii) not being to own the land is effectively "renting" but with huge benfits. That's the way I see it.

Also from what I understand regarding usufruct, the holder of the usufruct can go on and lease out the land he has usufruct for to anyone he likes (a lease of up to 30 years). A lease which goes and is valid beyond the usufruct holder's death. An usufruct can also be drawn up to include more than one person too. Does anyone know any different to this.

And finally, @ Beginner, maybe my lady is "different", I'll post back in 20 years and let you know if she still is (different).

In the meantime, anymore "knowledge-building" contributions to this thread will be most welcomed by the "hypothetical" farang who OP'd .

In the next few weeks, with all of your help, I'll be reading and posting more and starting to form an idea of the route I'll be most comfortable taking.

Edited January 25, 2008 by Marvo

[lioness]

Khun Jean

I am not a Developer/Broker or Lawyer.

Unfortunately people like you seem to view the world as you would deal with it. A bit sad really.

The person in question wanted assistance, you will note I said to make sure they check with a lawyer. I had a similar situation, I have control, I can sell and I can bequeath.

Not everyone is out for personal gain, some of us are genuine. I had no one to help me when I first arrived and it was difficult to say the least, and if I can help someone or point them in the right direction then I am happy to do so.

[Marvo]

Khun Jean

Unfortunately people like you seem to view the world as you would deal with it.

I'm afraid long years of bitter experience is moulding us lioness. It's a jungle out there and our behaviour, to some extent, seems to be controlled by our, now well developed, self-preservation mechanisms. (Especially in LOS )

...if I can help someone or point them in the right direction then I am happy to do so.

Everyone's opinion is welcome in this thread. Any piece for the puzzle can be useful.

[ProThaiExpat]

Marvo: Hypothetical questions are fine as long as one doesn't create a false bridge from reality to fantasy.

You have raised some points to add to your hypothetical:

i) the 30 yr mortgage is only for the final 1% value of the land.

ii) the payments are interest only and can be made in advance (preventing the arrears issue).

iii) the mortgage does not have the facility to be settled early.

Point i) If you mean to have the mortgage fully re-paid by language so it only covers 1% of the outstanding money loaned to buy, then that mortgage doesn't offer protection as it can be repaid easily by anyone. The idea of making a mortgage with a single "balloon payment" at the end of the lease term, effectively makes the mortgage at "full discouraging power" until the end of the lease.

ii) I must missed someone's point on the "arrears issue", since if the mortgagee is in default and the mortgagor makes no payment on the mortgage, failure to pay when due just keeps the "discouragement" factor at full strength until the end of the lease since failure to pay keeps the outstanding balance due on the mortgage in place.

iii) If the mortgage is payed off early, ie. a "balloon payment" due on the last month of the lease term payed off, the mortgageehas recovered the entire cost of the property to him and still has the lease to enforce, if dispossession is attempted. Likewise, with my "penalty provision" for disturbance of "quiet enjoyment" the dispossessor is facing a daunting possible penalty when the court case is litigated on the lease.

As to your point of the usurfuct outliving the "measuring life", not possible. Since the duration of the "estate", the interest in real property which is used to determine the duration of the estate, ends at the end of the "measuring life", the usurfuct holder, the duration of the usurfuct estate cannot extend past the measuring life. The measuring life of an estate is similar to the term of a lease, a lease is also an estate (a right to posesion).

Thus a usurfuct being a life estate and the term or duration of the life estate is the life of the estate holder, it can extend past a lease term but a lease term with a stated ending cannot extend past a usurfuct term since by definition, a lease term is always fixed and is void unless specific as to termination.

A fine point becomes in issue, if the lease term is for 30 years and the usurfuct terminates earlier because the lessee dies

before the end of the lease, I believe Thai law would terminate the lease as the lessee has died and in Thailand it is considered a personal obligation that terminates upon the death of one of the agreeing parties regardless of the term of the lease. Granted, if the lease provides for the right to assign and the lessee enters into an assignment prior to his death, said agreement being "triggered" by lessees death, I have no clue how a court would rule on that question.

I think the foregoing hypothetical might be enforceable if the lessee obtains the landlords agreement to the assignment triggered upon the death of the lessee, but practically speaking, a landlord would probably notagree to such a clause in a lease.

Since Thai property law has been copied from Western law, Western law principles can be used as a guide, but keep in mind,i) the 30 yr mortgage is only for the final 1% value of the land.

ii) the payments are interest only and can be made in advance (preventing the arrears issue).

iii) the mortgage does not have the facility to be settled early. that Thai property law is "code law", that which is written down on the books and not that which has developed over centuries by court decisions, so the Thai code law may well not cover all of the possible hypotheticals we can come up with.

[beginner]

My perspective is not to be expecting a financial return on the investment but a return in the form of a secure enjoyment of "my home" for the rest of my natural life (30,40,50 yrs??? - maybe less if I chose to live in Pattaya, thanks Beginner ;-).

ii) living the rest of my life at piece in a purpose built dream home on a plot with a view to die for...

And finally, @ Beginner, maybe my lady is "different", I'll post back in 20 years and let you know if she still is (different).

There are numerous web posts, books and articles written about the difficulties of Thai-Farang relationships and the conflicting cultural expectations of both parties and their families.

Even in the West with a marriage between two farangs around 50% of marriages fail within a few (5?) years.

There are many longstanding mixed marriages here but they seem to be the exception not the rule.

Once the relationship fails then hanging onto the house regardless of legal niceties and 'rights' can be harrowing and dangerous.

In areas with large expat populations there would be lots of support but a farang in an isolated Thai area would be very vulnerable to intimidation and the cold shoulder.

One of the best written and compelling versions of this familiar scenario is "For Juraporn" by Phil and first published (8/12/03)on www.stickmanbangkok.com in readers submissions. It is now in the Green Star ..Best of The Best list. Click on 'more readers submissions'.

Mangosauce.com among many others have other stories and many books cover the topic. See Michael Schemman Lady of Isaan and Lady of Pattaya. The classic Farang/Bargirl is Private Dancer by Stephen Leather.Thailand Fever is another by Pirazzi and Vasant.

Perhaps the theoretical relationship does not include a bar girl (strangely..very few do!!).

Then Money Is Still Number One. No Money No Honey. Fools Diary. Fool in Paradise etc etc.

In the meantime, anymore "knowledge-building" contributions to this thread will be most welcomed by the "hypothetical" farang who OP'd .

In the next few weeks, with all of your help, I'll be reading and posting more and starting to form an idea of the route I'll be most comfortable taking.

75,000 offshore UK will produce 5250 tax free HSBC...ie say 340,000 baht or 28,000 ish per month. More than enough for rural rentals. Bring into LOS and receive around 2.25% from Bangkok Bank...still enough for rent but the cash is more at risk of moving into the Thai family coffers. That could be the normal total family income for decades...a jackpot waiting to be cashed.

The more adventurous might move it into Australian banks and hope for an appreciating currency versus the baht based on Oz commodity demand.

The GOLDEN RULE. Only spend in LOS what you can afford to walk away from. Its often dead money...."money gone". If 75,000 loss won't hurt then no problem.

If it matters then your research might lead to the conclusion that renting is a better long term option.

Up to you as they say.

The very best of luck.

Edited January 26, 2008 by beginner

[fm2002]

Great info here guys. Just enough to digest and not look like an idiot when speaking with a lawyer. Thanks !

[Tony121]

Another option I have been looking at is leasing land only, and then owning the property freehold, with 30+30+30 year. Then if they don't renew at least I can have the satisfaction of smashing the house down, the plot I want is only costing THB 1,000,000

[ThaiLawOnline]

There is a very old proverb is law: YOU CAN'T DO INDIRECTLY WHAT YOU CAN'T DO DIRECTLY.

It is taugh in introduction of law classes.

The land code forbids foreigners to own land, with some exceptions created by other laws or decree.

(BOI, investment of 40 m baht, etc.)

So, how can you <hypothetically> acquire land indirectly if you can't do it directly?

I have to agree with BL4U and the excellent William Jarvis.

Usufruct is a concept of civil and roman law. It's normally unknown by people from Commonwealth countries.

I won't describe a usufruct as a "life estate". I studied them in French language (in Quebec) and it was describe as "demembrement du droit de propriete" which I could translate by "part(s) of the property right"

Property in civil law is divised in 3 parts: usus, fructus and abusus (latin).

A usufruct combines the 2 first part by you are not the FULL owner. You don't have the abusus, which gives you the right to sell or destroy (restrictions can be made according to the law or good faith, rights of third parties, etc.).

Usufruct can be created for a term (10-20-30 years), not only life, for free or NOT (and there are taxes to pay if it is not for free) and it can be done on some other title deeds than Chanotte. We did one last week on a Nor Sor 4.

Unfortunately, a lot is said about property in Thailand for foreigners but we rarely read precise and complete information. Some of the most complete information is often written by people having interest in the business.

I should add that Thai lawyers don't help: I often find them having opposite opinions about easy issues.

And one of the biggest problem for us, foreigners, is to find information in English.