60 Years Leasing

[thaiwanderer]

PS: I'm not saying that it's valid or invalid. I just put a big question mark on that. But if you want a lease for 60 years, you register one for 30 years and make a letter of intention to renew it for another 30 years the next years, binding the heirs. This has retroactive value under the civil code and according to my knowledge, IT IS ENFORCABLE in Court.

How exactly do you suggest that such a letter of intention can bind the lessor's heirs?

[samILO]

Phuet land office in Thalang will register such second term only if hte lessee for the first and second term is a different person. Phuket Town is still reluctant to register such second term. The law did not change but in general it is allowed to pre-register a lease on the land title with the land department, thus such registration should be allowed and will soon also be tested on phuket, as our office is working right now on filing the first time in Phuket Thalang land office. All by the law and legal.

[oracle]

Phuet land office in Thalang will register such second term only if hte lessee for the first and second term is a different person. Phuket Town is still reluctant to register such second term. The law did not change but in general it is allowed to pre-register a lease on the land title with the land department, thus such registration should be allowed and will soon also be tested on phuket, as our office is working right now on filing the first time in Phuket Thalang land office. All by the law and legal.

The second lease is not an existing lease but a future lease. It must start running in 30 years, if in the mean time the hirer or the letter dies or transfers ownership the second lease is automatically void in the first place. It does not offer any more protection then a renewal option. There are other practical legal problems too, so suggesting a 60 years lease to client would misleading and poor professional practice.

[samILO]

[q

Thanks You ow me a pound!

I go to landoffice myself, and pay the taxes myself. The landoffice collects correctly double tax on 2 x 30 years leases.

I m the owner of the company who lease out the propety to myself, my gf is managing director since 5 years. The company is not planning to bring my lease or any other lease to supremecourt.

I will sleep very well in an hour. Thanks

Let me know if it works as you would be the first in Phuket, to get your lease registered for 30 years in your name and additional 30 years in your name again, as normally it would have to be in a different name (2nd lease from the first as lessee), we are working on such right now. BUt why not rgister a superficies for live time?

[AjarnChan]

QUOTE (samILO @ 2009-06-24 11:52:16)

Let me know if it works as you would be the first in Phuket, to get your lease registered for 30 years in your name and additional 30 years in your name again, as normally it would have to be in a different name (2nd lease from the first as lessee), we are working on such right now. BUt why not rgister a superficies for live time?

Surely all of this is meaningless ? Anything can happen in 30 years, or long before that if it suits the authorities. I have held 'valid' Deeds and Leases before in other parts of the world only to see them 'invalidated'. I doubt it Thailand is any different, in fact it is surely much more likely to 'tinker' with them than elsewhere.

[samILO]

why would a second lease be automatically void if registered with the land department and recorded on the back of hte title deed, as such the agreement is binding to the hires of the Lessor!

Changes to law always can happen, but the advantage is that a lease registered would most likely b e grandfathered.

[thaiwanderer]

why would a second lease be automatically void if registered with the land department and recorded on the back of hte title deed, as such the agreement is binding to the hires of the Lessor!

Changes to law always can happen, but the advantage is that a lease registered would most likely b e grandfathered.

Grandfather what exactly? if its registered and rock solid as you think there's no need to grandfather anything?

Remember there is no liability for the (negligent or deliberate) error of a land office official and any subsequent revocation of such.

That this magical solution of registering a second lease in advance now appears to rely on using a different name shows its not the fully open solution some have suggested.

Whilst registration is the step missing from some other solutions to 'secure' beyond 30 years the fact of such a perverse interpretation of the law imho makes it far more unlikely to succeed in the long term than say the company route (if at all).

[thaiwanderer]

PS: I'm not saying that it's valid or invalid. I just put a big question mark on that. But if you want a lease for 60 years, you register one for 30 years and make a letter of intention to renew it for another 30 years the next years, binding the heirs. This has retroactive value under the civil code and according to my knowledge, IT IS ENFORCABLE in Court.

How exactly do you suggest that such a letter of intention can bind the lessor's heirs?

I bump this as I consider it important that a lawyer and sponsor of the forum who offers such an opinion should explain.

Thanks.

[samILO]

You are right it is not the open and secure solution as stated in here.

As stated before I don't think that a 30 year lease registered in a persons name and additional 30 years registered in advance will work, as it effectively is a 60 years lease. Company route a different subject even more complicated, but in general I agree with you.

[katabeachbum]

PS: I'm not saying that it's valid or invalid. I just put a big question mark on that. But if you want a lease for 60 years, you register one for 30 years and make a letter of intention to renew it for another 30 years the next years, binding the heirs. This has retroactive value under the civil code and according to my knowledge, IT IS ENFORCABLE in Court.

How exactly do you suggest that such a letter of intention can bind the lessor's heirs?

A letter of intention, or a 30 years lease registered and 30 more years agreed on, is in my opinion not worth much. It does not protect against owners financial problems

[dsfbrit]

dsfbrit, good post, I agree 100%

I really don't believe the current government, or indeed the opposition, would take any drastic action in the way of a 'land grab' against farang 'land owners', but who knows what may happen in the future?

Anything is possible.

Perhaps we should start a thread that discusses just what sort of situation Thailand would need to be in to start a 'land grab' or crackdown. Lets face it - the moment 1 piece of land was 'grabbed' then the rest of the land 'owned' by us farangs would be pretty worthless - who would buy it anyway. No farang thats for sure

I have to say, I am even more perplexed by this thread, when even Issanlawyers, a reputable sponsor of TV, seems to support this ridiculous notion that in 30 years time someone will actually go to a land office - produce a 30 year old piece of paper - and actually expect to successfully renew the lease for another 30 years.

I can picture the expectant farang, remonstrating with the hapless official with the reasoned argument '... but I paid the land tax, got an official stamp and Koon Official promised me it was OK...so whats the problem'

Its more likely when I go and do my 90 day reporting today at Jomtien, that one official wont want different documentary evidence than the last official, that I still live at the same address I have lived at for the past 6 years.

I love it here in Thailand, but when I cannot be sure that different officials in the same Immigration Office cannot agree whether I need proof of address each 90 days - I cannot see that in 30 years time a current official will agree with a colleague who departed many years before.

[thaiwanderer]

PS: I'm not saying that it's valid or invalid. I just put a big question mark on that. But if you want a lease for 60 years, you register one for 30 years and make a letter of intention to renew it for another 30 years the next years, binding the heirs. This has retroactive value under the civil code and according to my knowledge, IT IS ENFORCABLE in Court.

How exactly do you suggest that such a letter of intention can bind the lessor's heirs?

response here:

http://www.thaivisa.com/forum/Usufruct-Thailand-t275057.html

[samILO]

just wanted to make one statement here as the subject moves form one to another direction so fast.

If in case the Lessor of land (registered long term lease) dies during the time period of the lease is valid, goes bankrupt, looses his land through a court order or Revenue Department order or SELLS such land, you lost your extension rights as the option is only binding to the parties.

If you lease a property which includes land and building or is an apartment and is not seen as a reciprocal agreement by supreme court decisions 1791/2523, 1236/2501 or 488/2523, and in case the Lessee dies, the Lessor could apply at the land department immediately for cancellation of the lease agreement if he can provide a death certificate of the Lessor. If the Lessor dies during such agreement, the hires are bound even if he sells or loose the rights to the land, the rights receiver is bound by the initial 30 years lease as registered on the title.

Going a step further on such agreement, the Lessor can give the rights in the agreement that upon death the Lessor has to lease the property to the hires of the Lessee at a certain fixed remuneration.

BACK to 60 years lease registration:

As soon a lease would be registered on the land title deed it is valid for such term. Only 30 years time period is valid as maximum lease period at a time and extension is possible. That is all clear already and very well documented in here, I want to say that Thaiwanderer, Katabeachbukm and Isaan Lawyers doe a great job there. If in case such extension could be registered (and it should be possible if the Lessees are a different person ie. fist lease Mr./Ms. X and second lease Mr./Ms. Y son if of legal age), then such agreement would be binding to all third parties, hires, owners, rights receivers, government BECAUSE it is registered on the land title.

[thaiwanderer]

If in case the Lessor of land (registered long term lease) dies during the time period of the lease is valid, goes bankrupt, looses his land through a court order or Revenue Department order or SELLS such land, you lost your extension rights as the option is only binding to the parties.

All other things being equal this was my understanding also.

However Isaanlawyers appears to disagree here: http://www.thaivisa.com/forum/Usufruct-Thailand-t275057.html

In that thread you will see my (rambling) musings arsing from that.

Perhaps you can give a (more focused) view on that?

[Gary A]

Years ago when I was single, I wasn't happy about having to live in a condo rather than a house. I seriously considered a lease but decided against it because I knew I would eventually marry and with a 30 year lease, I would have no property to leave my future wife. I did a lot of research regarding the company route and decided that would be a time bomb. I do have a condo in my name. I now live in my wife's home and have also bought a couple of mini farms for her future. My condo is my safety net and I enjoy the monthly rent from it. Other than the condo and my pickup truck, everything else is in my wife's name. I'm comfortable with that and I don't have to hire an accountant, pay taxes or have a crooked lawyer draw up all sorts of bogus contracts.

[dsfbrit]

Years ago when I was single, I wasn't happy about having to live in a condo rather than a house. I seriously considered a lease but decided against it because I knew I would eventually marry and with a 30 year lease, I would have no property to leave my future wife. I did a lot of research regarding the company route and decided that would be a time bomb. I do have a condo in my name. I now live in my wife's home and have also bought a couple of mini farms for her future. My condo is my safety net and I enjoy the monthly rent from it. Other than the condo and my pickup truck, everything else is in my wife's name. I'm comfortable with that and I don't have to hire an accountant, pay taxes or have a crooked lawyer draw up all sorts of bogus contracts.

I dont log onto this forum much any more for advice about land ownership etc... it seems to be so far removed from my experience of Thailand and what I have learnt about all this over the last 3 years. I can understand Real Estate Agents 'banging' on about the ability to have some control over land for more than 30 years. They after all have to get farangs to buy( or at least fund) Real Estate/land Purchases. However, why normal sensible people seem to want to get involded as well pushing this fantasy is beyond my comprehension. Its 30 years lease - thats it!!! And according to a thread running now relating to the legality of putting land in the wifes name and leasing - even that my be quesioned in the future.

I think its best I dont come anywhere near this forum again - as banging my head against the computer screen in frustration is not healthy

[bonpourlazil]

Hi there,

What happens if the owner wants to sell the house during the 30 years leasing with me.

For exemple she bought a property of 1 million and after 5 years she wants i leave the house to sell it. Does she can do it? Is it safe for me ? Can i stay until the end of 30 years contract ?

Thanks you so much !

[johnnyk]

Hi there,

What happens if the owner wants to sell the house during the 30 years leasing with me.

For exemple she bought a property of 1 million and after 5 years she wants i leave the house to sell it. Does she can do it? Is it safe for me ? Can i stay until the end of 30 years contract ?

Thanks you so much !

In Thai law a 30-yr lease is binding on heirs and successors. This means someone who buys the land or inherits it must honour your lease to the end of its 30-yr term. BUT they are not obligated beyond that no matter what the unshaven, bleary-eyed guy on the next barstool says.

If the landlord wants to sell the land he/she can do it but the buyer gets you and your lease with it.

Of course someone could make life uncomfortable to get you out or you could negotiate a price to give up the lease.

[samILO]

Hi there,

What happens if the owner wants to sell the house during the 30 years leasing with me.

For exemple she bought a property of 1 million and after 5 years she wants i leave the house to sell it. Does she can do it? Is it safe for me ? Can i stay until the end of 30 years contract ?

Thanks you so much !

In Thai law a 30-yr lease is binding on heirs and successors. This means someone who buys the land or inherits it must honour your lease to the end of its 30-yr term. BUT they are not obligated beyond that no matter what the unshaven, bleary-eyed guy on the next barstool says.

If the landlord wants to sell the land he/she can do it but the buyer gets you and your lease with it.

Of course someone could make life uncomfortable to get you out or you could negotiate a price to give up the lease.

Correct, but as stated before there are other ways to secure the rights on property as there are superficies, usufruct, usage rights and permanent servitude all of which can be for life time an not only 30 years and superficies for example is also possible to sell and/or to pass to your hires. Also a Pre-Purchase/Sales agreement would be binding to hires of both parties.

[thaiwanderer]

Correct, but as stated before there are other ways to secure the rights on property as there are superficies, usufruct, usage rights and permanent servitude all of which can be for life time an not only 30 years and superficies for example is also possible to sell and/or to pass to your hires. Also a Pre-Purchase/Sales agreement would be binding to hires of both parties.

The benefits you highlight for superficies seem a bit of a mash up to me.

For superficies my understanding is that you can specify its for a period of time (maximum 30 years for residential property), for life of the land owner or life of the superficiary.

If concerned 30 years may not be enough then registering it for your life is an advantage. However that cannot then be passed on to your heirs. Also whilst it can be sold it is much less attractive as it remains tied to the life of the original superficiary (whereas if it was originally for 30 years whatever the remainder the buyer would have certainty).

(Also interested what of significance the pre-purchase / sales agreement adds here?)

[bonpourlazil]

thanks a lot to johnnyk, samILO and thaiwanderer for your reply !

[samILO]

Correct, but as stated before there are other ways to secure the rights on property as there are superficies, usufruct, usage rights and permanent servitude all of which can be for life time an not only 30 years and superficies for example is also possible to sell and/or to pass to your hires. Also a Pre-Purchase/Sales agreement would be binding to hires of both parties.

The benefits you highlight for superficies seem a bit of a mash up to me.

For superficies my understanding is that you can specify its for a period of time (maximum 30 years for residential property), for life of the land owner or life of the superficiary.

If concerned 30 years may not be enough then registering it for your life is an advantage. However that cannot then be passed on to your heirs. Also whilst it can be sold it is much less attractive as it remains tied to the life of the original superficiary (whereas if it was originally for 30 years whatever the remainder the buyer would have certainty).

(Also interested what of significance the pre-purchase / sales agreement adds here?)

Pre-Purchase Pre-Sales agreement in the name of a foreigner: This agreement gives you the rights to live in the property as an owner to it, though such agreement is not officially registered yet, and if written correctly it gives you the right to sell or transfer the rights to this agreement to any third party who can register such property into its name (Thai company, Thai National). This agreement is also binding to hires. You have to be careful though if the seller should decease you have one year time to file your claim against the estate. Also in case the Seller goes bankrupt or the property is frozen through court action or Revenue Department order, you have to file your claim and only get your portion of the total claim against the property by court proceedings. Very important to keep all evidence of Agreement, money transfers etc. to show that the transaction was a legitimate transaction. This agreement can also be done once you already leased or have the rights in another way to some property, but it is not registered with the authorities. See translation to Supreme Court (Dika Appeal) below:

312/ 11 The Pre-Sale Agreement made for the foreigner with the provision indicated that the said foreigner shall have the permission from Minister of Interior to purchase/ sale or transfer the ownership, the said agreement shall not be deemed the agreements with expressly prohibited purpose. Therefore shall not be void.

312/ 11 The Purchase-Sale Agreement with the provision stimulated “Commencing from the date this Agreement has been made, the ownership right over the purchased property, irrespective of one’s name appeared in Land Title registration page, shall be transfer into the buyer’s name solely and the buyer, as the holder of the ownership right over the purchased property, is entitled to perform his legal right over the property and fully benefit from the said property” and another provision indicated “The buyer, as the foreign national juristic person, shall receive permission from the Ministry of Interior in advance to enter the transfer the ownership right as in the Land Title registration page. The seller therefore certify to give all necessary assistance and support to the buyer in order to apply as the holder of ownership right over the purchased property and the seller certify that after the buyer received the permission from the government office to hold the ownership right the seller will immediately transfer the ownership right over the land to the buyer” is only deemed a Purchase-Sale Agreement. The Land Code section 86 is not the absolute prohibition for the foreigner to own land.

Superficies: Let me say that you are right, but not always. Sometimes it might be necessary to do more then a superficies agreement, maybe together with a lease, maybe not as it all depends on the needs of the person trying to register a right against a title of land.

Information given in here is very general and one could discuss it over long time without a perfect conclusion for everyone. There is no general formula. Such advice can not and should not bee seen as to make up for a personal visit and advice given by professionals as each case is different as each persons needs are different.

THAI CIVIL AND COMMERCIAL CODE

Book 4, Title VI

SUPERFICIES IN THAILAND

Section 1410. The owner of a piece of land may create a right of superficies

in favour of another person by giving him the right to own, upon or under the

land, buildings, structures or plantations.

Section 1411. Unless otherwise provided in the act creating it, the right of

superficies is transferable and transmissible by way of inheritance.

Section 1412. A right of superficies may be created either for a period of time

or for life of the owner of the land or the superficiary.

If it is created for a period of time, the provisions of section 1403 paragraph 3

shall apply mutatis mutandis.

Section 1413. If no period of time has been fixed, the right of superficies may

be terminated at any time by any partner giving reasonable notice to the other.

But when rent is to be paid, either one year's previous notice must be given or

rent for one year paid.

Section 1414. If the superficiary fails to comply with essential conditions

specified in the act creating superficies or, when rent is to be paid, he fails to

pay it for two consecutive years, his right of superficies may be terminated.

Section 1415. The right of superficies is not extinguished by destruction of

the buildings, structures or plantations even if caused by force majeure.

Section 1416. When the right of superficies is extinguished, the superficiary

may take away his buildings, structures or plantations, provided he restores

the land to its former condition.

If instead of permitting the removal of the buildings, structures or plantations,

the owner of the land notifies his intention to buy the at a market value, the

superficiary may not refuse the offer except on reasonable ground.

[thaiwanderer]

Pre-Purchase Pre-Sales agreement in the name of a foreigner: This agreement gives you the rights to live in the property as an owner to it, though such agreement is not officially registered yet, and if written correctly it gives you the right to sell or transfer the rights to this agreement to any third party who can register such property into its name (Thai company, Thai National). This agreement is also binding to hires. You have to be careful though if the seller should decease you have one year time to file your claim against the estate. Also in case the Seller goes bankrupt or the property is frozen through court action or Revenue Department order, you have to file your claim and only get your portion of the total claim against the property by court proceedings.

So like any contract its merely a gateway to litigation?

....................Very important to keep all evidence of Agreement, money transfers etc. to show that the transaction was a legitimate transaction. This agreement can also be done once you already leased or have the rights in another way to some property, but it is not registered with the authorities.

But it can be registered, can't it?

.....................Superficies[/b]: Let me say that you are right, but not always. Sometimes it might be necessary to do more then a superficies agreement, maybe together with a lease, maybe not as it all depends on the needs of the person trying to register a right against a title of land.

..........................................Section 1411. Unless otherwise provided in the act creating it, the right of superficies is transferable and transmissible by way of inheritance.

But that would depend on the right being tied to the life of the land owner or for 30 years (rather than the life of the superficiary)- raising its own problems / taking away the main benefit of superficiaries (what if superficiary lives longer than 30 years or longer than the land owner)?

Thank you for that. There is of course no perfect solution and no one size fits all as you say.

See my comments in red above.

[samILO]

Pre-Purchase Pre-Sales agreement in the name of a foreigner: This agreement gives you the rights to live in the property as an owner to it, though such agreement is not officially registered yet, and if written correctly it gives you the right to sell or transfer the rights to this agreement to any third party who can register such property into its name (Thai company, Thai National). This agreement is also binding to hires. You have to be careful though if the seller should decease you have one year time to file your claim against the estate. Also in case the Seller goes bankrupt or the property is frozen through court action or Revenue Department order, you have to file your claim and only get your portion of the total claim against the property by court proceedings.

So like any contract its merely a gateway to litigation?

....................Very important to keep all evidence of Agreement, money transfers etc. to show that the transaction was a legitimate transaction. This agreement can also be done once you already leased or have the rights in another way to some property, but it is not registered with the authorities.

But it can be registered, can't it?

.....................Superficies[/b]: Let me say that you are right, but not always. Sometimes it might be necessary to do more then a superficies agreement, maybe together with a lease, maybe not as it all depends on the needs of the person trying to register a right against a title of land.

..........................................Section 1411. Unless otherwise provided in the act creating it, the right of superficies is transferable and transmissible by way of inheritance.

But that would depend on the right being tied to the life of the land owner or for 30 years (rather than the life of the superficiary)- raising its own problems / taking away the main benefit of superficiaries (what if superficiary lives longer than 30 years or longer than the land owner)?

Thank you for that. There is of course no perfect solution and no one size fits all as you say.

OK, lets go from first comment. The Contract is not merely a gateway to litigation, but is the evidence necessary to file for litigation if a dispute arises between parties.

[/color]

2nd comment of yours: No the Pre-Purchase/Pre-Sales agreement can not be registered with the authorities (land department) except under latest regulations if a Trustee (by Thai law has to be a financial institution holding the proper license) applies for registration of such, which does not apply in such case.

3rd comment. Superficies is still valid if done for live time of rights receiver, not limited to 30 years, except made for a certain time period. It also can be made binding to hires as registered on the land title deed

Hope that helps and yes, please always consult your Lawyer or Law Firm as general advice given in here is to applicable to each case, as individual cases are different.

See my comments in red above.

[pepsi666]

How would this affect anyone who doesnt have a thai wife ?

Is there anyone who I could contact (via email) to discuss this at length