Bad News For Anyone Thinking Long Lease Is The Answer

[alive555]

if you have a 30 year lease in your own name and you die the contract is null an void, Incredible but true. So you would need a company to be the lessee or your dead so to speak.

[jdinasia]

ummm I am not sure that is accurate.

but then again when I am dead ........

[MrIrrisistable]

When you are dead...maybe nobody cares....when others are dead....maybe children and other family members do care what happens to their family home or whatever !

[PattayaParent]

Can't you just write a clause in the lease agreement that the lease survives the deceased so long as the property continues to be the home of the immediate family?

[backflip]

Many TVers believe that the answer to their prayers is a renewable lease. Although generally referred to as "30 + 30", many TVers refer to it as "30 x 30" - unfortunatle confusing Boolean algebra with simple math. But there are other concerns...

A well-known mall has just renegotiated a long-term lease (from SRT). The original lease was 2 billion THB for 30 years. The new lease is 30 billion THB for 20 years. So, just because you get a new lease, there's nothing that will guarantee that the leaseholder won't increase the price of the lease substantially.

[PennyFarthing123]

I believe the lease becomes invalid upon death if it is an Usufruct Lease. But I believe other forms of leases can state that they can be sold or inherited.

I also believe what Backflip says is accurate. Upon renewal of a lease the price would have to be renegotiated.

[Boater]

make sure it is written into the lease, most 30 + 30 + 30 year leases clearly state a renewal and option to convert should the Thai Law change to benfit the leasee IE foreign freehold and lease extension.

[johnnyk]

make sure it is written into the lease, most 30 + 30 + 30 year leases clearly state a renewal and option to convert should the Thai Law change to benfit the leasee IE foreign freehold and lease extension.

30+30+30 = 30.

The land office recognizes 30 years only.

Anything else is a personal arrangement and people are fooling themselves if they believe they are safe for 90 years.

30 years down the road may be very difficult if not impossible to enforce. Renewal of a lease is also not binding on heirs or successors so the land simply has to be passed to a family member or friend and its 30 and out.

[PattayaParent]

Leasehold poperty is certainly transferrable in other countries. Just look at London where a large %age of properties are on 90 year leases which can be sold on.

[dr_Pat_Pong]

make sure it is written into the lease, most 30 + 30 + 30 year leases clearly state a renewal and option to convert should the Thai Law change to benfit the leasee IE foreign freehold and lease extension.

30+30+30 = 30.

The land office recognizes 30 years only.

Anything else is a personal arrangement and people are fooling themselves if they believe they are safe for 90 years.

30 years down the road may be very difficult if not impossible to enforce. Renewal of a lease is also not binding on heirs or successors so the land simply has to be passed to a family member or friend and its 30 and out.

Correct Johnny.

[eljeque]

If a foreigner buys a property and puts it in his wife's name, and then gets 30 year lease from her at a nominal price of 5,000 / month registered at the land office. And then she goes out and borrows on the property, and does not repay the loan, she can lose the property to the lender. Then, he will actually have to pay the lease payments to the new owner, and if he misses one or two, can get a notice from the owner and may end up in court over it,

So, I would advise any foreigner who thinks that a lease is the answer to his dreams to make sure htat his wife cannot get her hands on the title deed, cannot get anew copy made, and / or see if a cause can be written on the land office lease agreement which states that a loan cannot be made on the property for any reason.

[cloudhopper]

If a foreigner buys a property and puts it in his wife's name, and then gets 30 year lease from her at a nominal price of 5,000 / month registered at the land office. And then she goes out and borrows on the property, and does not repay the loan, she can lose the property to the lender. Then, he will actually have to pay the lease payments to the new owner, and if he misses one or two, can get a notice from the owner and may end up in court over it,

So, I would advise any foreigner who thinks that a lease is the answer to his dreams to make sure htat his wife cannot get her hands on the title deed, cannot get anew copy made, and / or see if a cause can be written on the land office lease agreement which states that a loan cannot be made on the property for any reason.

I doubt a bank would ever make a loan against a chanote with a registered lease. If they did, they would have to honor the lease terms. BTW my registered lease quotes a nominal rent only a tiny fraction of this example.

[billd766]

Maybe I am foolish but strangely enough I love and trust my wife so much that all the land and houses etc are in her name.

So far it has cost me a lot less than the house I bought with my previous farang wife in the UK.

I walked away from that marriage with only the stuff that would fit in a Ford Mondeo estate car.

I paid £30,000 for my first house and £72,000 less the profit from the first one (about £50,000) in all. In the ensuing divorce I lost the house and everything except for my pensions which I managed to save.

The houses, land etc over here cost me a total of about THB 1,500,000 or less than £25,000.

If my wife dies before me in our will the house etc are left to our son and in her will I am named as his legal guardian so I would continue to live here and look after him and he me.

I am 64, my wife will be 43 in October and son is 4.

If I die no problem, If my wife dies no problem, if we divorce it is still no problem as I will gladly give it all to her and our son.

I would not want to stay in the area if that happened but why would I want to deprive my family of what is rightfully theirs?

[Burgernev]

if you have a 30 year lease in your own name and you die the contract is null an void, Incredible but true.

You can 'will' the lease onto your heirs as long as this provision is written into the lease contract.

I believe the lease becomes invalid upon death if it is an Usufruct Lease

True a Usufruct would expire upon death, but you can sub-let under a Usufruct. So you periodically run 30 year leases with your desired heir. So when you pass the rights carry on until the 30 years expire.

Burgernev

Edited May 23, 2008 by Burgernev

[PattayaParent]

I doubt a bank would ever make a loan against a chanote with a registered lease. If they did, they would have to honor the lease terms. BTW my registered lease quotes a nominal rent only a tiny fraction of this example.

Not all Thais get loans against their property from a bank, and that's when a lot of serious problems can happen.

[johnnyk]

Leasehold poperty is certainly transferrable in other countries. Just look at London where a large %age of properties are on 90 year leases which can be sold on.

That's nice but TiT.

[chiangmaibruce]

Gee eljeque that's a sneaky trick! Haven't heard that one before, thanks for the heads-up.

I think that eventuality could be circumvented (with banks loans at least) via loaning your partner the money for the property (full registered mortgage) AND ALSO entering into a lease agreement with her at a peppercorn rental. That way you would be the first mortgagor and tenant so you would be in a somewhat more secure position.

[Khun Jean]

Ah yess the lease subject AGAIN. Is this not the millionth time it is being discussed with still the same answers?

[chiangmaibruce]

Hmm. Just had a rethink on my suggestion. maybe not do-able despite what I have read elsewhere.

(Anyone please correct me but) I understand that where a Thai who is married to a foreigner wants to buy land (not condo) then the foreigner must provide written confirmation that he/she has no interest in the land (ie. if he/she provided some/all of the funds then this was a gift to the spouse).

If this is true for all land purchases then the foreigner could not hold a mortgage over the land as this would clearly represent "an interest".

Isaan Lawyers or any other legal people reading this - I would love to hear your thoughts

** Also not suggesting to anyone that a lease is the ideal way to go - just exploring this option.

- CB

[thaigene2]

Ah yess the lease subject AGAIN. Is this not the millionth time it is being discussed with still the same answers?

Hard for many people to make the transition through the denial phase I guess. It has been for me too. But my conclusion is that there is no point 'pretending' to buy something in the first instance (leasehold), and no point buying anything at all if the authorities can restrict your right to access it (change the rules for visas/residency) which they can and are continually doing on a near yearly basis.

Conclusion? Don't buy/lease anything for longterm here if you're a foreigner, unless you can afford to lose your access to it.

Rent here - buy in your own country - rent that out to someone else over there with a trusted family member/friend to oversee it - then use that incoming money to pay the rent here (bit of a hassle, but it works).

Edited May 24, 2008 by thaigene2

[ThaiLawOnline]

I do not come often on Thaivisa and received a private message to answer this thread. Sorry if I don't answer more often...

First, don't mix leases and usufructs. A "usufruct lease" doesn't exist. There are lease agreements and usufruct agreements. They might be similar, but are different... Leases are under section 537 and following of the Commercial and Civil Code of Thailand (CCCT) and Usufructs are under section 1417 and following,

Second, clearly, a usufruct dies at the death of the usufructuary. It's section 1418 CCCT. Many of our clients do not really care what will happen after their death. If you have children or heirs, that's important to know for a law firm in order to pick up the best option for you.

Third, Normally, in the event of death of the lessee, the lease agreement will be terminated. A decision of the Supreme Court (1108/ 1994) mentionned that "The lessee is the essence of a lease agreement. Therefore, should the lessee die, the lease contract will be terminated and the lease rights will not be transferred to the heirs of the lessee'.

However, the lessee should ask to include a clause in the contract about this possibility. In the event of death of the lessee, before the end of the term, his or her heirs shall continue to lease the land or that the lease will be transferred/ assigned to... Without this kind of clause, the lease will be terminated and not transferred to the heirs. (there are exceptions).

Chiangmaibruce: I've seen mortgage registered by a foreign husband on his wife's land. Not sure if it was done before the marriage, after, when, if some tea money was involved....The problem will be to execute this mortgage in case of divorce or other circumstances...What is in the Sin Somros? (Common property) What is inthe Sin Suan Tua (Personal property)? What does the contract say? What is done before getting married or not? Is there a prenuptial agreement? It can be very complicated... and you want to avoid going to Court.

Not sure if it helps..

[chiangmaibruce]

Thanks for that input. I would like to clarify a couple of points though ...

First, don't mix leases and usufructs. A "usufruct lease" doesn't exist. There are lease agreements and usufruct agreements. They might be similar, but are different... Leases are under section 537 and following of the Commercial and Civil Code of Thailand (CCCT) and Usufructs are under section 1417 and following,

Second, clearly, a usufruct dies at the death of the usufructuary. It's section 1418 CCCT. Many of our clients do not really care what will happen after their death. If you have children or heirs, that's important to know for a law firm in order to pick up the best option for you.

1. A Usufruct can terminate prior to death also (depending on what is written into the agreement)

2. While a Usufruct terminates no later than death, the right to occupy can continue beyond that time where the usufructuary enters into an agreement with a third party before death. The third party can be his/her child provided the child is not a minor.

Correct or incorrect?

Third, Normally, in the event of death of the lessee, the lease agreement will be terminated. A decision of the Supreme Court (1108/ 1994) mentionned that "The lessee is the essence of a lease agreement. Therefore, should the lessee die, the lease contract will be terminated and the lease rights will not be transferred to the heirs of the lessee'.

However, the lessee should ask to include a clause in the contract about this possibility. In the event of death of the lessee, before the end of the term, his or her heirs shall continue to lease the land or that the lease will be transferred/ assigned to... Without this kind of clause, the lease will be terminated and not transferred to the heirs. (there are exceptions).

That's interesting, I wasn't aware a lease could be continued in that way

Chiangmaibruce: I've seen mortgage registered by a foreign husband on his wife's land. Not sure if it was done before the marriage, after, when, if some tea money was involved....The problem will be to execute this mortgage in case of divorce or other circumstances...What is in the Sin Somros? (Common property) What is inthe Sin Suan Tua (Personal property)? What does the contract say? What is done before getting married or not? Is there a prenuptial agreement? It can be very complicated... and you want to avoid going to Court.

Can you confirm though that the foreigner spouse must always sign an agreement to say they have no interest in the property to be purchased?

I note you are saying that a foreigner spouse can (at least sometimes) hold a mortgage against a Thai spouse's property, but that the mortgage may not mean much in terms of protecting his money should the two divorce depending on the variables mentioned.

Not sure if it helps..

All good stuff, thanks

[thaigene2]

I do not come often on Thaivisa and received a private message to answer this thread. Sorry if I don't answer more often...

Hi Isaanlawyers - a very basic/naive question - are you saying that Thai law observse and applies 'presidence' law - like English Common Law and that of America to ensure that some other person can't pay someone off to get their favored decision that won't be challenged by presidence??

[think_too_mut]

are you saying that Thai law observse and applies 'presidence' law - like English Common Law and that of America to ensure that some other person can't pay someone off to get their favored decision that won't be challenged by presidence??

"Law by precedent"?

Edited May 25, 2008 by think_too_mut