Land Purchase - Right Of Redemption

[fredjones]

we are negotiating a contract to purchase land in thailand in my thai wifes name. Everything seemed to be going find until we did the title search and found a right of redemption exists on the land. I'm being told these arrangements are common in thailand i.e like pawning the land. Is this true? anyone had an experience of this?

[ThaiLawOnline]

we are negotiating a contract to purchase land in thailand in my thai wifes name. Everything seemed to be going find until we did the title search and found a right of redemption exists on the land. I'm being told these arrangements are common in thailand i.e like pawning the land. Is this true? anyone had an experience of this?

Yes, it's quite common. You will need a tri-parties agreement to buy this land, the owner, the person who has this right of redemption and your wife. It's a kind a security agreement, like a mortgage, but it's quite powerful in Thailand if done properly.If the person having who registered a "sale with right of redemption" is paid, he will "erase" his right, so your title should be clear of any encumbrances.

It’s governed by clauses 491 and following of the Thai Commercial and Civil Code, and you will find them just under these lines.

Sebastian.

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Sale with Right of Redemption

Section 491.

Sale with right of redemption is a contract of sale whereby the ownership of the property sold passes to the buyer subject to an agreement that the seller can redeem that property.

Section 492. Where the property sold is redeemed within the period fixed by the contract or by law, or where the person who redeems deposits the price of redemption to a deposit office within the period by waiving the right to withdraw the price, the ownership of the property shall be vested in the person who redeems from the time of payment or deposit of the price, as the case may be.

In the case of deposit under paragraph one, an official of the deposit office shall immediately give notice

of it to the redeemed person, whereby the person who redeems does not have to comply with Section 333 paragraph three.

Section 493. The parties may agree that the buyer shall not dispose of the property sold. If he disposes of it contrary to his agreement, he shall be liable to the seller for any injury resulting thereby.

Section 494. The right of redemption cannot be exercised later than:

(1) Ten years after the time of the sale in case of immovable property.

(2) Three years after the time of sale in case of movable property.

Section 495. If a longer period is provided in the contract, it shall be reduced to ten years and three years respectively.

Section 496. The period of redemption may be afterward extended by a contract, but if the total period is in excess of the period under Section 494, it shall be reduced to the period under Section 494.

The extension of the period under paragraph one must, at least, have some written evidence signed by the redeemed person. In case of the property whose sale must be made in writing and registered by the competent official, the extension can not be set up against a third person who has, for value and in good faith, acquired and registered his right unless such writing or written evidence is registered or recorded by the competent official.

Section 497. The right of redemption may be exercised only by:

(1) The original seller or his heirs, or

(2) The transferee of the right, or

(3) Any person expressly allowed to redeem by a contract.

Section 498. The right of redemption may be exercised only against:

(1) The original buyer

(2) The transferee of the property or of a right on the property, provided that, in case of movable

property, he knew at the time of the transfer that such property was subject to a right of redemption.

Section 499. If no price of redemption id fixed, the property may be redeemed by reimbursing the price of

the sale.

If the price of redemption or the price of the sale, at the time of redemption, is higher than the real price of the sale more than fifteen percent per year, it shall be redeemed at a real price including fifteen percent per year of profit.

Section 500. Costs of the sale borne by the buyer must be reimbursed together with the price.

Costs of redemption are borne by the person who redeems.

Section 501. The property must be returned in the condition in which it is at the time of redemption, provided that if the property has been destroyed or deteriorated through the fault of the buyer he must pay compensation therefore.

Section 502. The person who redeems the property recovers it free from any rights created by the original buyer or his heirs or transferee before redemption.

If a hire of property held subject to a right of redemption is registered by the competent official, it

shall be valid for not more than one year of its remaining duration, provided that it is not made for the purpose of injuring the seller.

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[astral]

You are buying land with an existing loan against the land.

I would make sure the seller repays the loan, as part of the sale contract,

or walk away.

Unless you are getting the land at a real bargain price??