90 Year Lease Is Just A Con

[Soi88]

Normally I only log on to Thai Visa as a source of excellent information but I felt compelled to sign up and contribute to try to warn potential buyers about my house buying experience and the problems my husband and I have since encountered.

We bought our house about 3 years ago intending to live 6 months in Hua Hin and 6 months back home, however our financial circumstances have changed for the worse so we put our house up for sale. It was on the market for about 10 months and our personal financial situation steadily worsened so in order to get it sold we drastically reduced the asking price, selling it for much less than we bought it for. This tactic seemed to have worked because soon after we dropped the price we found a buyer, or so we thought!

We bought our house using what we thought was a 90 year lease, 30 years x 30 years x 30 years. We have now found out after a lot of hassle, visits to the land office and consultations with a competent lawyer from Bangkok that this 30 year so-called extension contracts carry no legal weight whatsoever. That means we only have 27 years left from our original 30 years! What’s worse is, we need to get permission from our current landlady who is the real owner of the land. She has to cancel our existing lease and create a new one for our buyer to sign and re register a new lease at the land office. Considering our landlady has been charged with paying for gunmen to gun down one of her tenants we hesitated to ask her to do this for us, but there is no point pursuing this any further now as our buyer has understandably been scared off!

You may be wondering why we didn’t consult a lawyer before buying our house? Well the answer to that is we did! Before we ‘bought’ our house we used a very prominent lawyer from Hua Hin who actually helped write up the lease papers! We even used a Real Estate agent who came highly recommened on a local forum. How were we to know that our amicable agent was unqualified, had no previous real estate experience and was an ex used car salesman! Our developer turned out to be a thug and bully on the run from selling drugs in the UK and the lawyer we used supported the whole con very convincingly.

We will try to put this all down to bad experience and move on and we realise now we may never be able to sell our house as the details have now sunk in that we don’t actually own it and can only live there for another 27 years when our lease expires and please don’t insult our intelligence by stating we own the house, but not the land, because that’s not much good considering we can hardly move the bricks and mortar to another plot of land we rent can we! These real estate boys don’t half come out with absolute nonsense and we feel very foolish for falling for it all.

We would be interested to know if anyone else has had a similar experience trying to sell their house by selling on one of these fake 90 year leases? Our lawyer tells us selling property on the pretense of 90 year leases is illegal and we could win a case if we were to sue. The trouble is, court cases can take a long time in Thailand and who should we sue, the friendly agent who lied to us telling us it’s perfectly legal to have lease extensions, the developer’s wife or the bent lawyer?

To avoid further heartache we advise anyone considering buying a house by using a lease agreement to remember this:

1. A lease cannot exceed 30 years and is simply extinguished after 30 years without notice. Legal information like: 'the lease agreement can include two further 30-year renewals, which gives a 90 year lease, making it effectively ownership' is NOT correct and is generally unscrupulously suggested by people in the property trade, sales, building or legal offices.

2. A clause in the lease, 'it is hereby agreed that there shall be no further payments due for any renewals as the price shall cover the entire lease term however long it may be' is in a court legally meaningless.

3. The landowner of your house who has leased to you can sell the land whenever he or she likes.

4. In order to sell the house the landowner needs to cancel your lease and create a new one for the buyer. This means you need permission from your landlord to sell your house.

We also suggest you consult an impartial lawyer from Bangkok (not Hua Hin). Remember the foreign so-called lawyers from Hua Hin are not qualified to practice law in Thailand and are making a good living from the property market so it’s not in their interests to tell you the truth. Our Thai Bangkok lawyer has predicted there will be a huge amount of litigation in Hua Hin over the coming years when people realise they have been misrepresented and can’t sell their houses that they thought belonged to them.

Sorry if this has upset some people who have already bought their houses using a lease but you are bound to find out sooner rather than later when others try to sell their houses!

[mo1]

I am sorry to hear about your expirience and thanks for your publication as i am one who is looking for a house to buy but I think you should try and write to a thai MP as weli as trying to publish your story in am international forum and best of luck

[Soutpeel]

I am sorry to hear about your expirience and thanks for your publication as i am one who is looking for a house to buy but I think you should try and write to a thai MP as weli as trying to publish your story in am international forum and best of luck

Yes very good post....but trying to write to a Thai MP.... ....How long have you lived in Thailand ??

[stgrhe]

A 30+30+30 land lease has never been safe since the law maximizes the lease time to 30 years. It is really a shame that many legal companies still today suggest various illegal arrangements to get around the problems related to a foreigner owning land in Thailand.

[pothai]

The lease can be extended a further 30 years but at the discretion of the leaseholder who of course would not be in their best interests so would not do this. As the owner has discovered even selling you must gain permission from the leaseholder. It is a shame that people are not explained correctly when purchasing a property. To buy a house in Thailand really is for Thai Nationals only and it seems unfair that the story above will become more common place now that people who bought under leasehold will find out....and ones that bought with ghost companies will have an even bigger surprise when they try to sell. There is a man in Hua Hin that can help people, he is in the newspapers so maybe contact him but the law just is not on your side in this scenario.

[chiangmaibruce]

1. A lease cannot exceed 30 years and is simply extinguished after 30 years without notice. Legal information like: 'the lease agreement can include two further 30-year renewals, which gives a 90 year lease, making it effectively ownership' is NOT correct and is generally unscrupulously suggested by people in the property trade, sales, building or legal offices.

2. A clause in the lease, 'it is hereby agreed that there shall be no further payments due for any renewals as the price shall cover the entire lease term however long it may be' is in a court legally meaningless.

3. The landowner of your house who has leased to you can sell the land whenever he or she likes.

4. In order to sell the house the landowner needs to cancel your lease and create a new one for the buyer. This means you need permission from your landlord to sell your house.

So sorry to hear about your experience, whatever will you do now?

1. is correct. the maximum term of a lease is set at 30 years. it can't be "extended" but a new lease can be entered into. But as stated, why would they when they don't have to?

2. yes as per 1.

3. correct, but your existing lease is binding on the new owner

4. I think this only applies if you don't request (in the original lease), a clause to allow you to re-assign the lease. A good lawyer would have advised you to seek this. Enough said on that score. Not sure what (if any) provisions there are for making a formal complaint about the conduct of a thai lawyer. Not suing, just lodging a complaint of unethical and misleading conduct

[timi2546]

30+30+30=30 ....

[johnnyk]

1. A lease cannot exceed 30 years and is simply extinguished after 30 years without notice.

Correct me if I'm wrong but if you sign a 30-year lease on May 1, 2009 it seems to me you know precisely when that lease expires -- on April 30, 2039. That seems like 30 years notice to me.

If people can't figure that out they shouldn't be allowed to go to the mall in their own country without a minder, let along signing papers in foreign countries.

[PhootThaiMaiDai]

To avoid further heartache we advise anyone considering buying a house by using a lease agreement to remember this:

1. A lease cannot exceed 30 years and is simply extinguished after 30 years without notice. Legal information like: 'the lease agreement can include two further 30-year renewals, which gives a 90 year lease, making it effectively ownership' is NOT correct and is generally unscrupulously suggested by people in the property trade, sales, building or legal offices.

2. A clause in the lease, 'it is hereby agreed that there shall be no further payments due for any renewals as the price shall cover the entire lease term however long it may be' is in a court legally meaningless.

3. The landowner of your house who has leased to you can sell the land whenever he or she likes.

4. In order to sell the house the landowner needs to cancel your lease and create a new one for the buyer. This means you need permission from your landlord to sell your house.

This is one of those situations where you have to use what you've got (already including the ThaiVisa Forum). I would suggest you fight fire with fire, if nothing else you may garner some sense of satisfaction. There's still a couple of options that may smack of desperation, but are worth some thought. I hate the notion of bad people getting away with something.

While you’ve already admitted that the selling or moving of the house itself as "chattel," whole, may be impractical and a non-issue from your point of view, consider the seller's (original lessor) position of the replacement cost of the house itself. Not knowing the house in question or the seller, it's hard to gauge the effectiveness of this strategy, but my guess is as an asset, it is worth something, a lot - including the opportunity cost to the seller if they want to sell it again.

Another and included issue is, by salvaging the house as parts or scrap (wood, brick, structural steel, wiring, plumbing fixtures, etc) to any one or many of the many builders in the area, that would remove and haul the usable items in exchange for a sum (money), you could at least recoup some of your losses. It sounds as if you’re running low on funds - liquefy an asset.

Either by using the seller’s perceived replacement value of the home as leverage for further dialogue, putting your seller in a position to modify the current contract more towards your favor, or recouping some of your losses outside a court room as a last resort, you would be within your rights according to your contract as presented.

It sounded from your post that you are deflated and out of ideas. Exercise your "spite makes right" clause, it won’t make you a bad person and if exercised and marketed well, no longer the victim.

Best of luck, let us know how it goes…

[chiangmaibruce]

We bought our house about 3 years ago intending to ...

Just to clarify, you bought the house and land at the same time, correct?

If that is the case then I think I am correct in saying that you don't own the house - you lease it as per the land. Therefore you cannot move it or dismantle it as suggested later.

The alternative would be that you bought the land and (on the basis of believing you had a 90 year lease) then built a house. With the house you lodged the necessary paperwork to have yourselves recognised as the legal owner of the house (I think this must be noted on the chanote?). Only in this case do you truly own the house, and can do what you like with it.

[stgrhe]

If that is the case then I think I am correct in saying that you don't own the house - you lease it as per the land.

Not necessarily so! It is likely that the OP signed two contracts, one lease contract for the land, which was registered at the Land Office, and one building contract for the house to be built. If the building permit for the house was registered in the OP's name at Tessaban then he would be the owner of the house.

[Burgernev]

If that is the case then I think I am correct in saying that you don't own the house - you lease it as per the land.

Not necessarily so! It is likely that the OP signed two contracts, one lease contract for the land, which was registered at the Land Office, and one building contract for the house to be built. If the building permit for the house was registered in the OP's name at Tessaban then he would be the owner of the house.

The building permit can be in anyone's name (yours, wife's, building contractors, developers etc) it doesn't really matter as long as the contract/s state that you will own the house (building) on the land. Then when you register the land lease at the land office you give notice to register the building in your own personal name. There is then a 30 day period where your lawyer (or A.N.Other I guess) has to post a public notice of this intention, after 30 days you return to the land office with the landowner and complete the registration of the building in your name. Tax on a 3M Baht building was 8,500 Baht last week when we done one.

Burgernev

Edited April 6, 2009 by Burgernev

[PatinBKk]

Any foreigner that buys/leases any property in Thailand needs their head testing. You will never own it and the Thai government will change laws at will.......Ok, if property was 5K or 6K Sterling then maybe think about it but to pay 5,6,7,10,15, Million Baht for something that will NEVER be your own is ludicrous...just dont understand the mentality of people, do they leave their brains in a dustbin at the airport or what

[Khun Jean]

A lot of talk but no solutions.

Remember this is Thailand, and money talks.

You still have the contract so the owner of the land can do nothing with it. If you find a buyer you can agree with the owner that she will get 10% from the sale price for making a new contract. If not then just rent out the place. At some moment the 10% will be accepted. It is free money after all. If the buyer wants a full 30 year, that will need some extra negotiations, but 27 years for a acceptable price is not impossible.

The only thing you need is time. If you paid cash and have no debt renting it out, even for a low price, will keep the place in working order and in some state to be able to show it to prospect buyers. I don't read this forum as much as i did before but if you need some specific info you can always send me a pm.

You are new, but others from this forum know that my offer is genuine without any strings attached.

[PatinBKk]

So really a 10% discount should be factored in when buying properties in Thailand if you have to pay/bribe the leaseholder to let you sell......word of warning to anyone...property in Thailand is for THAIS only....leave well alone...DO NOT BUY if you want to live here..rent...or if you have a Thai partner you can buy in their name but be wary that one day you may loose everything because again its not legally yours

[PeaceBlondie]

As it stands, this thread is now okay, as altered. We will not name names. Please do not provide links to closed threads elsewhere in this local forum. Thank you.

[kendall]

Hi, I have read your statement and feel that more could be done. The land owner must have signed the contract/land papers, so she should be aware of the ninety years, 30 + 30 + 30 she has agreed to with her lawyer. If so, she has to honour the contract or she has knowingly defrauded you along with her lawyer and yours. When this lease was created, you, your lawyer and the land owner should have gone to the land office to make this legal. At the land office one of the top officials should have looked at it and overseen it and stamped/signed the land paper with your name on it. Copies of your passport etc should have been taken. The landlady cannot legally sell the land without your agreement. This has all been recorded at the land office. To sell the land a contract lease would have to be re-written between you and the new proposed owner.

My own experience is very similar to yours but under different circumstances, let me explain what happened to me. My wife is Thai and as usual the wife wanted to build a house near her village. I thought this was a good idea as I’m a country boy at heart and would love to retire there. We bought 10 acres of land and put a bungalow on it. Meanwhile things got a bit hot under the collar with her family as they had seen money flying around on the project, everybody wanted some. I talked to my wife about this and what would happen to me and the children if anything happened to her i.e. would the family think they would have an automatic right to it. There was a lot of pressure on her from the family has she now owned land and a big house, so to put a stop to this we decided to lease the house under my name. I had read about leasing and understood that you could lease a 30 year term and take out another 30 years, 60 years in total and that was the maximum. But as always in Thailand there are many grey areas and I have found that you get many different explanations of the law.

While visiting a friend in pattaya I went to see a lawyer who is experienced in leasing, she told me the same has what I have read. So off I went with my wife to the North East of Thailand. Went to a local lawyer and told him what we wanted to do. His reply was you are a foreigner and you can’t do that, you have to laugh because it is like this all the time. I assured him that I can lease land and if he contacted the land office they would fill him in on all the details.

He contacted the land office and agreed to write up the contracts after he had received all the info he needed. I personally was after a thirty year lease but if I could get two thirty year leases, that’s even better. I’m 48 years old and the rest of my children would have grown up by then. Has it turned out I could have a recurring thirty year lease indefinitely has long has I paid a fixed amount every year to make it legally binding. I see you have paid a one off payment for the full three terms to make it binding.

I think the stumbling block here is you are not going to ask your landlady to change over your lease to a buyer because she has tried to have someone shot. A binding contract between two parties should be legal if done right and this would always be a personal law suit if you have a disagreement under the contract i.e. not honouring the next two terms (Which you will never know until the end of the first term) If you know that you have been legally defrauded then it’s case for the police and they should be notified.

I would politely notify your landlady that you are selling the lease and what is the best way for you and her to proceed with the transfer at time of sale. It would be prudent to mention that you will cover all cost of the transfer and there would be something in it for her. If she refuses to go ahead with it, you do have a problem and then you will have to think hard what’s best for you. If she agrees to go ahead with it then all is fine. It is up to a buyer and their lawyer if they want to go ahead with the contract, just like you did. It’s always risky buying property abroad.

Hope this was some help.

[PatinBKk]

But you still have to have agreemant from the leaseholder....property in Thailand is for Thais...us foreigners either rent or put it in our partners names...

[Khun Jean]

The landowner agreed to the 90 years and that is valid until the owners dies or transfers/sells the land to someone else. at that moment only the 30 years registered at the land office is still valid. The other 60 years is a private deal which can not be honored anymore because the land is not in possession anymore.

However when someone wants to sell a lease it should have been written down in the contract that it can be transfered. If that is in the contract the owner has to honor that.

If the owner does not do that you can take the owner to the court and you will win the case easily. However that can take a long time. The 10% or whatever amount the owner agrees with is most of the times a better option. It will relief you of a headache situation that can take years. In this situation it is between someone who want to transfer the contract to another. Reread the contract about transfer rights. Without that, your only practical way to get some money back is to rent out the house. If it is in a good location and reasonable priced it can even be a small money maker.

[eldar1]

I never did get why people lease land for other then commercial purposes. You pay the same amount as buying it and even with a 3x30 year lease after the time is up the owner gets his/her land back. It's a great deal for the owner, especially as a long term investment, every 90 years you get sell your land for the newly inflated price. I feel for you OP and i wish i could offer you sensible or practical advice, besides getting a lawyer.

If there is no option and you are stuck with the land for 30 years and you really want to spite the owner, why not turn it into a dumping ground? Have local factories pay you to dump stuff on your land cheap than the rubbish dump, hazardous chemicals anyone? I'm kidding of course and i'm sure you will be thrown in jail for it, but an entertaining thought non-the-less.

[PeaceBlondie]

I never understood why a foreigner tries to own real estate in Thailand, a country whose anthem really means "Thailand is for the Thais."

I finally decided that 'we' should buy a house. My name is nowhere. He owns it, I bought it.

[PatinBKk]

I never understood why a foreigner tries to own real estate in Thailand, a country whose anthem really means "Thailand is for the Thais."

I finally decided that 'we' should buy a house. My name is nowhere. He owns it, I bought it.

Exactly...Thai property for Thai nationals....I did the same and accept the fact that if in the future we split I will probably get nothing...but if I have lived there for a number of years and it is a stable place for the kids I think I have had my monies worth.......its just a shame that so many people like the OP didnt realise what they were letting themselves in for....the situation is only going to get worse over the coming years as more people try to sell and find that they are basically up sh*t creek without a paddle....

[PeaceBlondie]

The problem is much more difficult for all-farang couples who were brain-washed in their home countries to the necessity of being the lord of their own private manor, with clear legal title. Just rent. Rent is incredibly cheap here.

But if a guy comes here and makes some luk-kreungs, leave them a home, in their mother's name. Done and dusted.

[Burgernev]

Leaving aside Limited Companies and Thai partners, a lot of people lease accepting it will be 30 years as this period is adequate for them and they know as basically a long-term rental it is cheaper than renting, even taking into account the upfront capital expenditure.

Also a lot of people are using Usufruct's these days, these provide lifetime rights to the land and house.

Many people are happy renting but many people that come over would not entertain renting or condo's, I wouldn't.

Whatever you feel comfortable with.

Burgernev.

Edited April 9, 2009 by Burgernev

[patklang]

So really a 10% discount should be factored in when buying properties in Thailand if you have to pay/bribe the leaseholder to let you sell......word of warning to anyone...property in Thailand is for THAIS only....leave well alone...DO NOT BUY if you want to live here..rent...or if you have a Thai partner you can buy in their name but be wary that one day you may loose everything because again its not legally yours

Not quite correct.

A will or long term partnership agreement can protect you if the relationships fails.

[unforgiven]

Normally I only log on to Thai Visa as a source of excellent information but I felt compelled to sign up and contribute to try to warn potential buyers about my house buying experience and the problems my husband and I have since encountered.

We bought our house about 3 years ago intending to live 6 months in Hua Hin and 6 months back home, however our financial circumstances have changed for the worse so we put our house up for sale. It was on the market for about 10 months and our personal financial situation steadily worsened so in order to get it sold we drastically reduced the asking price, selling it for much less than we bought it for. This tactic seemed to have worked because soon after we dropped the price we found a buyer, or so we thought!

We bought our house using what we thought was a 90 year lease, 30 years x 30 years x 30 years. We have now found out after a lot of hassle, visits to the land office and consultations with a competent lawyer from Bangkok that this 30 year so-called extension contracts carry no legal weight whatsoever. That means we only have 27 years left from our original 30 years! What’s worse is, we need to get permission from our current landlady who is the real owner of the land. She has to cancel our existing lease and create a new one for our buyer to sign and re register a new lease at the land office. Considering our landlady has been charged with paying for gunmen to gun down one of her tenants we hesitated to ask her to do this for us, but there is no point pursuing this any further now as our buyer has understandably been scared off!

You may be wondering why we didn’t consult a lawyer before buying our house? Well the answer to that is we did! Before we ‘bought’ our house we used a very prominent lawyer from Hua Hin who actually helped write up the lease papers! We even used a Real Estate agent who came highly recommened on a local forum. How were we to know that our amicable agent was unqualified, had no previous real estate experience and was an ex used car salesman! Our developer turned out to be a thug and bully on the run from selling drugs in the UK and the lawyer we used supported the whole con very convincingly.

We will try to put this all down to bad experience and move on and we realise now we may never be able to sell our house as the details have now sunk in that we don’t actually own it and can only live there for another 27 years when our lease expires and please don’t insult our intelligence by stating we own the house, but not the land, because that’s not much good considering we can hardly move the bricks and mortar to another plot of land we rent can we! These real estate boys don’t half come out with absolute nonsense and we feel very foolish for falling for it all.

We would be interested to know if anyone else has had a similar experience trying to sell their house by selling on one of these fake 90 year leases? Our lawyer tells us selling property on the pretense of 90 year leases is illegal and we could win a case if we were to sue. The trouble is, court cases can take a long time in Thailand and who should we sue, the friendly agent who lied to us telling us it’s perfectly legal to have lease extensions, the developer’s wife or the bent lawyer?

To avoid further heartache we advise anyone considering buying a house by using a lease agreement to remember this:

1. A lease cannot exceed 30 years and is simply extinguished after 30 years without notice. Legal information like: 'the lease agreement can include two further 30-year renewals, which gives a 90 year lease, making it effectively ownership' is NOT correct and is generally unscrupulously suggested by people in the property trade, sales, building or legal offices.

2. A clause in the lease, 'it is hereby agreed that there shall be no further payments due for any renewals as the price shall cover the entire lease term however long it may be' is in a court legally meaningless.

3. The landowner of your house who has leased to you can sell the land whenever he or she likes.

4. In order to sell the house the landowner needs to cancel your lease and create a new one for the buyer. This means you need permission from your landlord to sell your house.

We also suggest you consult an impartial lawyer from Bangkok (not Hua Hin). Remember the foreign so-called lawyers from Hua Hin are not qualified to practice law in Thailand and are making a good living from the property market so it’s not in their interests to tell you the truth. Our Thai Bangkok lawyer has predicted there will be a huge amount of litigation in Hua Hin over the coming years when people realise they have been misrepresented and can’t sell their houses that they thought belonged to them.

Sorry if this has upset some people who have already bought their houses using a lease but you are bound to find out sooner rather than later when others try to sell their houses!

I feel for you. The rule in thailand is trust no one. The laws change regularly thats why all the smart falangs rent. Renting here is a much smaller fraction of the purchase price than it is in the west. Here you want to be mobile. You might get bored with the area,have a fight with a neighbour... etc. Anyways don't pannick 27 years is along time. Where in Hun Hin is it?and the $?

[BEENTHEREDONETHAT]

The solution is too buy a condo. No hassle and all very legal.

[stgrhe]

The solution is too buy a condo. No hassle and all very legal.

Not everyone likes to live in a condo and all recommendations in that direction have absolutely no meaning to those, who already have a house.

[Ave88]

The only people that benefit on a 30 year lease is the foriegn builder's wife who will be Thai. The builder will put everything in the Thai wife's name to avoid paying tax, he will also be here in Thailand on a marriage or retirement visa so is working here illegaly.

The OP has purchased from the attepted murder mastermind, who would want to meet or do business with her, thats if they can get hold of her. Her husband is now with her (SHE IS ON BAIL) and playing happy family's in Bangkok, although he was in Hua Hin last week (Wednesday) at the local Go Kart Track.

I do not believe their is a qualified or trained Estate Agent in Hua Hin, they do not have the patients to be a English Teacher or do not have the money to rent a Bar, so they sell house or advertising. Nice to get immigration involved, would solve so many problem's here in Hua Hin, or even Thailand.

Assume the ex used car salesman who is passing himself off as an estate Agent drives the same red Mitsubishi Triton pick up featured in the "Hot Line" newspaper special supplement issued in February? Brit Scammer's.

[maccaroni man]

I never understood why a foreigner tries to own real estate in Thailand, a country whose anthem really means "Thailand is for the Thais."

I finally decided that 'we' should buy a house. My name is nowhere. He owns it, I bought it.

I always think 50+30 =80 or 60+30 = 90 either way i will be too old to care, too tired to repair anything and ready to rent.