The 30+30(+30) Year Lease (final) Discussion

[Irene]

If you are the Landlord then I agree with your comment. I was looking at things as the Rentor. If I were the Rentor, I simply would not agree to the clause you refered to. I would not agree to requiring the LL's consent to a sublease. Per the Thai Civil and Commercial Code, a sublease or an assignment on uses of property is not possible unless specifically stated in a lease. If a lessee subleases or assigns the right without the lessor's agreement, the lessor may terminate the lease. The clause I referred to was a repeat of a legal standing as to make the lessee aware of this restriction. Even without this clause in a lease, section 544 of the Code is still applicable and you cannot override the legal requirement through your one-sided intention as a lessee.

A similar subject. As a LL you would never agree to allowing a Rentor to sublease at a rent higher than that the LL is receiving (because, why not rent it yourself for the higher amount if you know you can get it ). As a Rentor I say that has nothing to do with the LL. ?? As a LL, I will never allow any sublease or assignment blindly without knowing who they are first. So, if you do that, it would be a cause for me to terminate the lease and claim for damages.

And while it may not be common, the lease agreement I have for my house in Bangkok both gives me the absoulte right to sublease, without the consent of the LL, and the right to sublease at a rent higher than that I pay the LL. That is an agreed intention concluded by BOTH parties and within the letters of the law.

But in that case I am the Rentor, as the LL I would never agree to those clauses. So what my case proves, if it proves anything, is that in contract negotiations I had the stronger bargaining power, which is reflected in the terms of the agreement. It just proves that to sublease legally, you need a lessor to agree with you first. Also, it just proves that you have a better bargaining power than the lessor.

[mickba]

.................................The law and diference between real rights and a 'promise' is unknown to many and people really think that once it is in a contract they can rely on it............................................

You're right of course i.e. a 30 Year Lease (registered) is (at best) just that and that, presumably, a Lifetime Usufruct is (at best) just that, regardless of all the clever clauses one might put in the Lease Agreement.

So for those of us around 60 yo who cannot accept the rental option (i.e. must create our own living space) and who accept the end result of either, what is our best option of these two - 30 Year Lease or Usufruct (please ignore the effect of marrying the owner this time) - or is there another way?

I am writing as an individual buying land in Thai's name and building - I do accept your point/s that the 30+30+30 etc etc can be a scam when used by developers to mislead buyers.

[thairookie]

I was thinking about this article 1469.

Is this scenario possible?

Register land in the name of mother/father/brother/sister in law.

get a usufruct for live.

Mother/father/brother/sister in law writes a will to leave the land to your wife/husband/girlfriend/boyfriend.

or, if you have children with Thai nationality:

Register land in the name of child/children

get a usufruct for live. (Would that be possible? Can as an example a foreign father decide that for his child(ren))

Never read before on internet too.

Isn't a Will ambulatory ? That is to say, any beneficiary of the Will has "NO LEGAL RIGHTS" until the death of the Testator. In the meantime, while the Testator is still alive, he can change his Will as often as he changes his diapers. He need not even have to go to the same lawyer to change his Will, so that you will not find out that he has changed his Will. It's the Last Will and Testament that matters.

As for children, I don't think they're old enough to legal own a land.

[thairookie]

This UsuFruct thingy is something new to me.

Now having read several comments on UsuFruct, it seems to me that an UsuFruct is the equivalent of the English Common Law concept of "Life Interest" or "Tenant for Life". You're definitely guaranteed the right of possession during your lifetime regardless of the number of occurrences the property may have changed hands, though in practical terms nobody would want to buy a property encumbered with a Life Interest. So effectively what the owner has is a Reversionary Interest, that is to say, the property goes back to the owner or her estate(if she dies before you) upon your death.

The agreement that produces the Life Interest will appear to be the English equivalent of a Trust, and a Trust is irrevocable in order for it to make any sense.

[WilliamJarvis]

If you are the Landlord then I agree with your comment. I was looking at things as the Rentor. If I were the Rentor, I simply would not agree to the clause you refered to. I would not agree to requiring the LL's consent to a sublease. Per the Thai Civil and Commercial Code, a sublease or an assignment on uses of property is not possible unless specifically stated in a lease. If a lessee subleases or assigns the right without the lessor's agreement, the lessor may terminate the lease. The clause I referred to was a repeat of a legal standing as to make the lessee aware of this restriction. Even without this clause in a lease, section 544 of the Code is still applicable and you cannot override the legal requirement through your one-sided intention as a lessee.

True, but the sub-lease is agreed to in the lease agreement, the difference is that there is no further [later] consent required from the LL in my case - as the consent is provide for in the LEASE AGREEMENT [for emphasis purposes], whereas you require consent [from LL at a future date] if Rentor wishes to sub-lease. Thus a restrictive coventant.

I fail to see the difficulty with grasping the conspect.

[Irene]

[

I fail to see the difficulty with grasping the conspect.

I don't see the difficulty in grasping the concept because I have been doing this as a living and no sublease is ever allowed by me or by any rational lessor because you want to vet a person going to use your property. Blind permission to a lessee for subleasing is out of character of any lessor. I am not doing this as an academic exercise and know very well where I am standing.

[WilliamJarvis]

I don't see the difficulty in grasping the concept because I have been doing this as a living and no sublease is ever allowed by me or by any rational lessor because you want to vet a person going to use your property. Blind permission to a lessee for subleasing is out of character of any lessor. I am not doing this as an academic exercise and know very well where I am standing.

Exactly - but, from the posts I've read, you appear to take the stance of a land owner or agent. 99.5% of people on the forum are looking at things as the rentor or leasee.

I like your posts on the forum and think they're really useful. But come over to the dark-side and see things from the a different standpoint

[Irene]

I don't see the difficulty in grasping the concept because I have been doing this as a living and no sublease is ever allowed by me or by any rational lessor because you want to vet a person going to use your property. Blind permission to a lessee for subleasing is out of character of any lessor. I am not doing this as an academic exercise and know very well where I am standing.

Exactly - but, from the posts I've read, you appear to take the stance of a land owner or agent. 99.5% of people on the forum are looking at things as the rentor or leasee.

I like your posts on the forum and think they're really useful. But come over to the dark-side and see things from the a different standpoint

In life, there are two sides of a coin and one has to be open-minded. I am in both positions in life, as a lessor and a lessee and can see clearer the rights of both parties. It boils down to the meeting of both minds in concluding any contract in life. There is nothing academic about restrictive or non-restrictive covenants.

[Khun Jean]

Digged up from page 10 to help new readers.

[BL4u]

I think you will find that anyoption to renew contained in a 30 year lease will not be noted on the land title deed (Chanod).

It's not a case of someone 'forgetting' - it would never be recorded, as it is a "personal" matter between leasor and leasee.

So there would never be any problem in selling the land, either during, or after the 30 years has expired, regardless of what effectively is a 'side deal' on an option to renew. It just isn't enforceable.

Mobi: as the usufurctuary you can't lease the property to another individual for a term up to 30 years because simply you can't register this at the land office and this is a requirement under Thai law for the lease to be enforceable - despite what sponsors on this forum say.

The reason why developers push the 30+30 or more specific prefer to push the 30+30+30 for land and house is because they know the purchasers rights will only last 30 years. Developers are more street-smart than the average lawyer representing the buyer!!

A developer who sold a property under a lease just has to wait 30 years before he can sell it again to you or someone else!

Set up a company (with the drawbacks) if you want to buy and own something!!! Take a lease or take a usufruct if you want to have possession and use over a property for 30 years! Beyond that, lease and usufurct will only benefit the owner of the property.

[Khun Jean]

a Usufruct can be for live, and you can not give a lease longer than 3 years to somebody else because that has to be recorder on the chanot and for that you need the real owner.

If he does that you are very lucky, but don't count on it. Especially after a long while, the land can be very expensive in that time.

If you want to 'transfer' it to your children put the usufruct in the name of the children from the beginning. They would be worth more dead than alive so that could be a problem.

[mickba]

Herewith my 30 yr Lease tale thus far :-

I chose this option with my eyes fairly wide open - at almost 60 it doesn't worry me too much. So I bought the land in gf's name and took the prepaid Lease - properly registered on the Chanote and with the properly drawn up, signed and witnessed (but no doubt useless) contract alongside which gave me permission to build a home and register it freehold in my name.

We did the contract promptly but I chose to have the land divided/re-measured etc., and due to this and then a delay in getting all the signatures re the boundaries, we didn't get the new Chanote for about 3 months and then had to get the Lease registered - but no problem (yet).

Meanwhile, wanting to get on, we had the plans drawn up and applied for permission to build. Of course at this stage, we only had the original Chanote in gf's name and without the Lease registered so the application was done in her name - but no probs eh? because in England at least it doesn't matter who applies for planning consent.

My understanding was that once the build was about 70% done we could apply for the address etc and I would get the House Book. 10 months later and 2 million into the build cost, the documents became available, but in the name of the planning consent applicant i.e. the gf. I am now told that this cannot be changed except as follows:-

Land Office suggests I form a company etc. to buy it, ha ha

Lawyer suggests I do a 30 yr Lease on the house as well ha ha ha

Lawyer says otherwise I have to buy the house from gf and pay all the costs and taxes for doing so. I don't know how much yet, but that's where I'm heading.

My main Question is this - given that the Lease had been registered several months before the House Book was issued, is it reasonable for the Land Office to have created title to the house in the Lessor's name as it creates a crazy situation should she expire or we split up?

I should say that gf and I haven't fallen out (yet) and I expect to resolve it, but at best it's going to cost me - anyone know how much?

I'm still not clear what I could have done differently, other than to delay the planning application until I had the new Chanote with the Lease registered on it.

I don't think this is a Lease vs Usufruct question, as I believe the same problem would have arisen.

[Khun Jean]

I would suggest you buy it. Taxes now are very low so it should not cost you more than a few thousand baht total.

[mickba]

I would suggest you buy it. Taxes now are very low so it should not cost you more than a few thousand baht total.

Thanks - that's the conclusion I came to, so I've asked the Lawyer to find out how much, but I don't have a choice really. Apparently the Land Office have to do a valuation based on area etc. i.e. they won't take account of the fact that it's only part built at the point of sale. I'm guessing the tax rate is about 1.1% the same as for a Lease? Then I'll have to pay the Lawyer. It's just annoying and no doubt it'll take another 2-3 months.

As I said, I'm not sure what I could have done different except perhaps I should have gone back to the Land Office once the Lease had been registered but before the House Book was issued and paid the guy to change the panning applicant's name to mine, but I didn't foresee the problem because I thought I had to apply for the book. It seems that once the book has been issued it's cast in stone.

Although I knew what I wanted to do, in practice it can prove difficult to synchronise the various parts. Along the way there were (and still are) points at which my position/security was/is at risk should the gf situation have gone wrong - definitely not for the faint hearted.

Maybe a lesson in there for someone.

[tiow]

As a long time reader and sometimes poster, "user" of land owned by my wife i find it amazing how many times this "30+30+30 years lease" is mentioned.

Even more amazing is that people seem to get these leases. If you are wel informed you will NEVER do this as it is not guaranteed.

My intention for this thread (Thread is a big word, this post should be enough) is to

END this SCAM!

So please don't try to defend this "30+30+30 years lease", you will only make a fool of yourself. On second thought, yes defend it, then at least we know you are talking BS and all the rest you say can be ignored.

First things first, the lease itself:

Be sure the land title is "Nor Sor Sam", "Nor Sor Sam Gor" or "Chanote". All other lower titles can not register a lease.

Make sure you register the lease! Otherwise it is only enforceable for a maximum of 3 years.

If the land is sold to a new owner the lease is transfered with all the rights for the one who leases. (There is a catch!)

So far so good.

Time for some negatives.

We have to make a distinction between "real lease rights" and "non lease rights".

NEGATIVE NUMBER 1.

--------------------------

A renewal clause is a "non lease right"!

This means that when the land is sold to another this renewal "right" is lost.

An example to make it more clear for the people who are doubtfull.

You lease land for 30 years and make an extra clause for a renewal. In this clause you might mention the new lease amount, up to you.

After about 20 years the owner dies. The land is now his daughters. His daughter at the end of your lease decides that it is in her best interest to not renew your lease and request you to please remove all buildings and other items within one month.

Oke another example where the owner not dies, just to be fair. First make sure the owner you lease it from is healthy and will probably live for at least 30 years.

After 30 years minus 1 week the owner starts to think about this stupid lease he signed. His land was very difficult to sell all this time it was occupied. This 'farang with his new girlfriend' that visited last week was really interested in the land. He offered 50 million cash. How to get rid of this 'renewal'. Better call a lawyer. This lawyer says, "no problem, just transfer the land to your daughter". Ah yes. The owner can sleep good again and dreams of his 50 million in the bank, and a mercedes in front of his new house.

There are so many possible scenarios to get out of this renewal right i think that the 2 easiest are enough.

NEGATIVE NUMBER 2!

-------------------------

You HAVE TO PAY RENT!

This means the money you paid when you signed this lease is for 30 years! Remember that is the maximum!

After 30 years if you are able to get a renewal you will HAVE TO PAY AGAIN!. And be sure it is a lot more than the first time. Count on at least 3 times as much, but prepare for 10 times or even 50 times.

The good thing is you will not have to worry about this "negative number 2", "negative number 1" takes care of that.

But just to make it clear it is not only a negative when it is renewal time.

If you GIVE the money to buy the land to your girl/boy friend or wife/husband so you can have a lease, you also HAVE TO pay rent.

And it should be at least the amount the landoffice valuates it for. So pay the fees, and the tax. But also to be fair, this si probably not a very high amount, but it should be calculated before you decide to buy the land.

There are more negatives, but would you decide to get this lease construction after reading the first 2!

If you are satisfied with a 30 year lease, go for it. It is as secure as it gets. But there are also negatives with this scenario. These are not 'risks' that you have with the law. But to not be to negatieve lets call them warnings.

WARNING NUMBER 1!

-------------------------

You get fed up with the place. Consider your money gone. (The case when you not happily married but just lease from stranger (developer))

WARNING NUMBER 2!

-------------------------

The relationships is not what it used to be. You decide for a divorce. You leased the land so you dont need to go. But first pay the ex-partner 50% of the value of the house.

WARNING NUMBER 3!

--------------------------------

'she is NOT different!' (Oke just joking!!!)

WARNING NUMBER 4-1000!

-------------------------------

Read everything on this website. (And that is not a joke!!)

A good law reference is www.samuiforsale.com. Required reading!

As some other poster mentioned and asked. Yes it is the 'BIBLE on LANDOWNERSHIP for foreigners'.

There is some hope, saty tuned for another topic soon.

What do you think? Should this be pinned?

[tiow]

What about the situation where the lessor (or person giving a usufruct - the true owner) is made bankrupt? Is the lessee of usufructeur(?) at risk?

[tiow]

What about the situation where the lessor (or person giving a usufruct - the true owner) is made bankrupt? Is the lessee of usufructeur(?) at risk?

[Naam]

What about the situation where the lessor (or person giving a usufruct - the true owner) is made bankrupt? Is the lessee of usufructeur(?) at risk?

if the usufruct is on the chanote the answer is "no".

[Paul MBMG]

a few quick thoughts

It's currently held to be the case that a correctly written contractual renewal is binding on both original parties. Therefore, while Jean's point that any change or assignment in the lessor revokes renewal rights is correct, other posters' concerns about being 'kicked out' by the original landlord probably aren't. Eviction procedures would have to be instigated through the courts by the landlord rather than him just throwing out tenants who then have to fight for their rights.

To make renewals more secure, corporate lessors where teh tenants retain a golden share therefore appear to be increasingly viable.

Usufructs over the land should also be considered in conjunction with outright ownership of the buildings and also some district office in conjunction with land departments allow the registration of a permananent right of abode as well - but this seemingly varies from amphoe to amphoe.

Personally I much prefer access to freehold rights rather than leasehold rights but these too need to be carefully structured to avoid the many pitfalls.

Paul

[tiow]

What about the situation where the lessor (or person giving a usufruct - the true owner) is made bankrupt? Is the lessee or usufructuary at risk?

if the usufruct is on the chanote the answer is "no".

And in the case of a 30 year lease?

Is that still secure, or a least until the expiry ofthe thr original term?

[Naam]

What about the situation where the lessor (or person giving a usufruct - the true owner) is made bankrupt? Is the lessee or usufructuary at risk?

if the usufruct is on the chanote the answer is "no".

And in the case of a 30 year lease? Is that still secure, or a least until the expiry ofthe thr original term?

yes it is, provided it is entered on the chanote.

[ThaiLawOnline]

Naam is right.

It's related to the distinction or a "REAL RIGHT" and a contract "INTUITU PERSONAE" in civil law. The real right follow a "thing". Doesn't matter who is the owner. If there is bankruptcy, the owner will obviously change. But your "right" is registered, stays there until it is completed, and follows the deed. A registered right has also a rank, a priority. If 2 mortgage are register on a deed, the first one, unless the law specifies an exception, is paid before the second one.

Now, you can put almost anything in a contract unless it's against public order. Because a usufruct normally gives more power (By its nature), drafting a nice lease is more complicated to give you the same rights or more (like inheritance, which you can't with a usufruct, but the usufruct can be combined to a lease after). Each case is different and you can't on a forum like here, say what is the best option for Mr or Mrs X.

[mickba]

Herewith my 30 yr Lease tale thus far :-

I chose this option with my eyes fairly wide open - at almost 60 it doesn't worry me too much. So I bought the land in gf's name and took the prepaid Lease - properly registered on the Chanote and with the properly drawn up, signed and witnessed (but no doubt useless) contract alongside which gave me permission to build a home and register it freehold in my name.

We did the contract promptly but I chose to have the land divided/re-measured etc., and due to this and then a delay in getting all the signatures re the boundaries, we didn't get the new Chanote for about 3 months and then had to get the Lease registered - but no problem (yet).

Meanwhile, wanting to get on, we had the plans drawn up and applied for permission to build. Of course at this stage, we only had the original Chanote in gf's name and without the Lease registered so the application was done in her name - but no probs eh? because in England at least it doesn't matter who applies for planning consent.

My understanding was that once the build was about 70% done we could apply for the address etc and I would get the House Book. 10 months later and 2 million into the build cost, the documents became available, but in the name of the planning consent applicant i.e. the gf. I am now told that this cannot be changed except as follows:-

Land Office suggests I form a company etc. to buy it, ha ha

Lawyer suggests I do a 30 yr Lease on the house as well ha ha ha

Lawyer says otherwise I have to buy the house from gf and pay all the costs and taxes for doing so. I don't know how much yet, but that's where I'm heading.

...............................

I'm no further forward with this. My objective was to get the house registered in my own name (which I thought one could do) but the lawyer has told me that I still could not get a yellow book without meeting residency and other conditions. Having read further posts scattered about I concluded he was right and spat my proverbial dummy out (never a good idea I know).

I should add that I am not married to the gf (or anyone else) and don't plan to be. I am currently on a One Year Multi Entry and shortly applying for a Retirement extension.

So to summarise, I have the Lease correctly registered on the Chanote, but the house is in gf's name.

Any comments as to how this may result in problems or suggestions as to what else I could do would be greatly appreciated.

Mick

[pomozki]

okay, a request
it seemed clear after #1 post that this was cut and dried. NO way can farangs safely get a renewable lease

but now this has run 200+ posts. I started reading them but It'll take a long time so my request is would someone mind telling me if anyone in those 200 posts successfully contradicted the OP?
I ask because a British mate had a house built on a new estate and I asked him about his lease -

yes, he said - it has. This guy is a businessman and not stupid - anyway, here is exactly what he said:
" I signed a 30 year lease which the land owner has to renew twice x 30 years. If they refuse to renew they have to buy my house at the current value."
does this sound feasible or is he fooling himself?
 

[LivinLOS]

13 minutes ago, pomozki said:

" I signed a 30 year lease which the land owner has to renew twice x 30 years. If they refuse to renew they have to buy my house at the current value."
does this sound feasible or is he fooling himself?

Fooling himself.. 

1) the first 30 years lease is a 'real right' 
2) the rest is contractual obligation easy to avoid.. It doesnt transfer to any new owner of the land, the landowner can claim he doesnt have the funds to purchase the house so thats that, the landowner can simply be unreachable and not be found. Attempting enforcement of the contract now needs to go to court, which can be delayed, court dates not attended, appealed etc etc etc..

All of which happens when the lease holder no longer has any 'real right' of the lease and legally can be moved on, house occupied by others / destroyed / etc.. 

A lease is a very specific kind of contract. Because contract law in Thailand is so weak, they recognize how unenforceable so much of contracts are, they have created a stronger 'real right' in the max 30 year lease. Its a contract that they really cant break.  If its contractual, its fight it in court with a far lower liklihood of success or security. Thats the long and short of it. 
 

[pomozki]

3 minutes ago, LivinLOS said:

Fooling himself.. 

1) the first 30 years lease is a 'real right' 
2) the rest is contractual obligation easy to avoid.. It doesnt transfer to any new owner of the land, the landowner can claim he doesnt have the funds to purchase the house so thats that, the landowner can simply be unreachable and not be found. Attempting enforcement of the contract now needs to go to court, which can be delayed, court dates not attended, appealed etc etc etc..

All of which happens when the lease holder no longer has any 'real right' of the lease and legally can be moved on, house occupied by others / destroyed / etc.. 
 

thanks heaps LivinLOS - much appreciated
I might be visiting him and his lawyer soon - if I get any other relevant info I'll add it here
until then I'll assume it cannot be safely done, cheers!