Taking Land Out Of Pawn For Tilak

[tlock]

Apologies for the long post...

I'm thinking about paying off some debt for my girlfriend to put some land in her name and I would appreciate any insight into what's happening and whether or not it sounds legit. It's not a huge amount of money, and of course I believe (90%- always a skeptic) tilak is legit, or I wouldn't be giving her the money, but I figured a post here may clarify some things.

She has been telling me about some family land that they have used as collateral for a loan over the last year (i lived with her for the last year in pattaya and just came home for a few months to square some things away, and am heading back end of this month). I always told her I wasn't interested in paying family debt off for her, and she never directly asked me to (passive aggressive? , so she hasn't mentioned it for several months. I asked about it recently, since the debt was supposed to be paid off at songkran, and she said they didn't come up with the money so they are putting it off for another year.

It sounds like her father owned some farm land (15 rai), and took out a loan against it. The person who gave him the loan kept the land as collateral and farms it (or rents it out) as his interest. The loan amount is 120k baht (this is about an hour outside of surin). They managed to come up with 30k, but are deferring the 90k balance for another year. This loan is already 3 years old, and was due to be paid off this year.

She says the family's intention is to put the land in her name, as she's responsible for paying off the bulk of it (presumably by coming to pattaya and finding a kind hearted farang with the dosh- mission accomplished). After researching land prices, it seems like too good of a deal to pass up. She says there is another 15 rai that her father's brother put into a similar loan arrangement, and owes 80k on. The brother has basically abandoned the land, but told her father that if he paid off the 80k the brother would sign it over to him (or my gf). This second plot she says isn't farmable just yet (trees all over, needs to be "cleaned"), so she's not that interested in it.

Both pieces of land have the "chanote" (sp?) and it is at the bank. After finding out land prices, I told my gf that I would give her the 90k to put the first plot in her name, and then I suggested I could give her the 80k to get the other 15 rai which we could sell to recoup my full investment and she would get her 15 rai for free. She said it would be easy to get 300-500k for the second 15 rai plot.

It was her suggestion that I come to watch the transfer of both chanotes to her name. It occurred to me that I would really have no idea what was going on, just some thai folks signing some papers and smiling at me as i hand over 170k.

Basically, does this sound like a plausible situation? Although I don't believe it in my gut(edit- that she's lying), after hearing all of the horror stories, it ocurred to me that it would be quite a clever trick to have some land in father's name and change it to daughter's name and make 170k for land she would have inherited anyway. Is there any way to make sure that what she says is happening is really happening? I have less doubt that the end result will be 2 chanote for 30 rai in her name, I'll make photocopies and take these back to some thai friends in pattaya and verify at least that. But how will I know if there really is a loan/collateral involved?

TIA

B

Edited March 6, 2008 by tlock

[Gary A]

Apologies for the long post...

I'm thinking about paying off some debt for my girlfriend to put some land in her name and I would appreciate any insight into what's happening and whether or not it sounds legit. It's not a huge amount of money, and of course I believe (90%- always a skeptic) tilak is legit, or I wouldn't be giving her the money, but I figured a post here may clarify some things.

She has been telling me about some family land that they have used as collateral for a loan over the last year (i lived with her for the last year in pattaya and just came home for a few months to square some things away, and am heading back end of this month). I always told her I wasn't interested in paying family debt off for her, and she never directly asked me to (passive aggressive? , so she hasn't mentioned it for several months. I asked about it recently, since the debt was supposed to be paid off at songkran, and she said they didn't come up with the money so they are putting it off for another year.

It sounds like her father owned some farm land (15 rai), and took out a loan against it. The person who gave him the loan kept the land as collateral and farms it (or rents it out) as his interest. The loan amount is 120k baht (this is about an hour outside of surin). They managed to come up with 30k, but are deferring the 90k balance for another year. This loan is already 3 years old, and was due to be paid off this year.

She says the family's intention is to put the land in her name, as she's responsible for paying off the bulk of it (presumably by coming to pattaya and finding a kind hearted farang with the dosh- mission accomplished). After researching land prices, it seems like too good of a deal to pass up. She says there is another 15 rai that her father's brother put into a similar loan arrangement, and owes 80k on. The brother has basically abandoned the land, but told her father that if he paid off the 80k the brother would sign it over to him (or my gf). This second plot she says isn't farmable just yet (trees all over, needs to be "cleaned"), so she's not that interested in it.

Both pieces of land have the "chanote" (sp?) and it is at the bank. After finding out land prices, I told my gf that I would give her the 90k to put the first plot in her name, and then I suggested I could give her the 80k to get the other 15 rai which we could sell to recoup my full investment and she would get her 15 rai for free. She said it would be easy to get 300-500k for the second 15 rai plot.

It was her suggestion that I come to watch the transfer of both chanotes to her name. It occurred to me that I would really have no idea what was going on, just some thai folks signing some papers and smiling at me as i hand over 170k.

Basically, does this sound like a plausible situation? Although I don't believe it in my gut(edit- that she's lying), after hearing all of the horror stories, it ocurred to me that it would be quite a clever trick to have some land in father's name and change it to daughter's name and make 170k for land she would have inherited anyway. Is there any way to make sure that what she says is happening is really happening? I have less doubt that the end result will be 2 chanote for 30 rai in her name, I'll make photocopies and take these back to some thai friends in pattaya and verify at least that. But how will I know if there really is a loan/collateral involved?

TIA

B

It's a very common thing to borrow money and use the land for collateral. HOWEVER, the second plot sounds suspicious to me. If it can be sold for 300,000 to 500,000, why doesn't her uncle sell it himself?

[chownah]

Go with her to the bank and get a copy of the chanotes before you agree and let your friends look at them for you....you go with her...verify that the bank is holding them and that they are not in a lock box only with her holding the key....maybe have the bank official indicate which text it is on the back of the chanote which shows the transaction (I think it will be listed on the back but not sure).

Also, with a bank loan there should be some loan papers...or receipts for money alreay paid...or loan statements either monthly or yearly....have a look....

Chownah

[tlock]

It's a very common thing to borrow money and use the land for collateral. HOWEVER, the second plot sounds suspicious to me. If it can be sold for 300,000 to 500,000, why doesn't her uncle sell it himself?

I think the uncle owes someone else 80k for the land, so he can't sell it. It seems like these loans don't actually give the title to the loanor, but some other paper indicating that the land can't be sold until the debt is paid. I reckon that's called a lien in faranglish? The idea of paying it off and then selling it was my halfbaked idea. She didn't seem that interested in it since she can't farm it without putting more money into clearing it.

Go with her to the bank and get a copy of the chanotes before you agree and let your friends look at them for you....you go with her...verify that the bank is holding them and that they are not in a lock box only with her holding the key....maybe have the bank official indicate which text it is on the back of the chanote which shows the transaction (I think it will be listed on the back but not sure).

Also, with a bank loan there should be some loan papers...or receipts for money alreay paid...or loan statements either monthly or yearly....have a look....

Chownah

the loans aren't from the bank, they are from individuals. the chanotes are at the bank. as you can see, it's all very confusing . i'm not clear how these loans are legalized, but my gf assures me that there is "paper" involved.

thanks for the replies

[PadThaiGuy]

Been seeing allot of laon shark posts lately.

More lucrative than the sick buffalo story.

[Farma]

The loans I’ve seen like these have been to the local loan shark or a moneyed family.

The lender holds the land title and uses the land as if their own until the debtor repays the loan and high interest back in full.

I haven’t heard of any bad experiences once the loan is repaid although I’m sure there may be some cases.

The cases I know were straight forward. The debtor repaid the loans, the land titles were handed back and the families resumed farming on the land at the next opportunity.

[chiang mai]

I may be well off base here but I think it's unusual to have a Chanote title on purely farmland, especially in a place such as Surin. Nor Sor Sam, Nor Sor Sam Gor more likely I would have thought. Maybe wrong here and no doubt will be corrected if that's the case.

The other factor in this story that I'm more clear about is that of interest rates. When Thai's take out loans like this, even from each other, the interest rates tend to be fairly high - if the loan were with a loan shark then it could easily be 1 or 15% per MONTH. If the loan were with a "friend" or relative the interest rate would be lower but nevertheless, the lender would almost certainly require/demand additional interest for extending the loan - those figures don't seem to appear in the story!

Edited March 7, 2008 by chiang mai

[Gary A]

If the bank holds the chanote, that means they owe the bank money too. VERY few loan sharks will loan money without holding the actual chanote. Mortgages will be recorded on the back of the document and that mortgage MUST be paid off before the land can be transferred, Of course he can sell the land. When the loan is paid off the chanote can be transferred. I would bet that a loan shark will NOT loan any money without that chanote. That said, if the bank holds the chanote and the mortgage is paid of the land can be transferred. (sold).

[chownah]

It's a very common thing to borrow money and use the land for collateral. HOWEVER, the second plot sounds suspicious to me. If it can be sold for 300,000 to 500,000, why doesn't her uncle sell it himself?

I think the uncle owes someone else 80k for the land, so he can't sell it. It seems like these loans don't actually give the title to the loanor, but some other paper indicating that the land can't be sold until the debt is paid. I reckon that's called a lien in faranglish? The idea of paying it off and then selling it was my halfbaked idea. She didn't seem that interested in it since she can't farm it without putting more money into clearing it.

Go with her to the bank and get a copy of the chanotes before you agree and let your friends look at them for you....you go with her...verify that the bank is holding them and that they are not in a lock box only with her holding the key....maybe have the bank official indicate which text it is on the back of the chanote which shows the transaction (I think it will be listed on the back but not sure).

Also, with a bank loan there should be some loan papers...or receipts for money alreay paid...or loan statements either monthly or yearly....have a look....

Chownah

the loans aren't from the bank, they are from individuals. the chanotes are at the bank. as you can see, it's all very confusing . i'm not clear how these loans are legalized, but my gf assures me that there is "paper" involved.

thanks for the replies

If there is paper involved then get a copy of the paper....if the loan has nothing to do with the bank then the chanote is just being held in someone's private lock box at the bank...in the US we call it a safetydeposit box...you know....the ones where it takes two keys...you have one and the bank has one and you go check in to access your box..there is a yearly fee.....I guess the chanote is being kept there....that's were we keep our chanotes and there is not money borrowed against them at all....so nothing unusual about that. If there is paper then look at the paper...get a copy...have your friends examine it for you...

If you do end up paying a sizeable amount of money to spring the chanote you might consider asking before hand if you could get a lease on it in your name...ask for 30 years..maybe let her negotiate you down to 15 years....or something......tell her its for tax purposes....ell her you want the land office to record it on the back of the chanote (this is how it is done when done correctly)....see what she says....

Chownah

Edited March 7, 2008 by chownah

[colmx]

YOu should check to see whose title is on the actual chanote... In my experience Thais are not too bothered with wills and succession... So chances are a grandparent or great-grandparents names are actually on the Chaonte

BFs Uncle did something similar with the land on which BFs (dead)grandmother owned - but on which BFs family actually lived

We required the Chanote in BFs name in order to apply for a visa for him to visit Ireland

Cost 40,000B to buy back the chanote from the loan shark

Then cost 40,000 in Lawyers fees and around 2 months plus loads of visits to teh land office to:

-Do probate on the Grandmothers estate

-Transfer uncles share of the land into BFs fathers name

-Transfer the land into BFs name

So remember things may be not completely clear cut when it comes to transferring titles

[dotcom]

Yeah get a copy of the chanote on plot A. Consult a lawyer.

Do nothing about plot B till you see how plot A works out.

Be prepared to lose everything if she decides to cut you loose.

[Shah Jahan]

Just give her 90k baht and say its a valentines day present. the end result will be the same and you wont have a headache or have to worry about your pride.

[jasreeve17]

Yeah get a copy of the chanote on plot A. Consult a lawyer.

Do nothing about plot B till you see how plot A works out.

Be prepared to lose everything if she decides to cut you loose.

Good sensible advice.

[tlock]

Just give her 90k baht and say its a valentines day present. the end result will be the same and you wont have a headache or have to worry about your pride.

Heh- you hit the nail on the head. I don't really mind giving her 90k, and I'm not expecting to have any illusion of ownership in the land. The "plot B" thing is more of a legitimate business decision (can we do everything with no cost in the end), but "plot A" is just a gift to my valentine. I just don't want to be outsmarted....

[dr_Pat_Pong]

Just give her 90k baht and say its a valentines day present. the end result will be the same and you wont have a headache or have to worry about your pride.

Heh- you hit the nail on the head. I don't really mind giving her 90k, and I'm not expecting to have any illusion of ownership in the land. The "plot B" thing is more of a legitimate business decision (can we do everything with no cost in the end), but "plot A" is just a gift to my valentine. I just don't want to be outsmarted....

All's well that ends well.