Leasing Land

[cabeza]

Does anyone know if this is legally OK in Thailand?

I have been offered a 29 year sub-lease on a house and land in Thailand. The land is owned by a Thai company (legit) which has leased the land and house for 30 years to a non-Thai company (Aussie) and that lease is registered at the land office. The lease allows the non-Thai company to sub-lease the land and house for the duration of its lease. The non-Thai company has created a lease for acceptance in Australia with the provision that any disputes are heard by the Australian Courts. The payment conditions are an initial (fairly large) payment and an annual smallish payment subject to inflation adjustment. Financially the deal is acceptable.

I am confident that the Aussie company that holds the lease is in good standing and that the lease it holds is valid and genuine. I don,t have any concerns that I am being ripped off but I am would like to be sure that the transaction is Ok in relation to Thai law. My thanks to anyone who can advise.

[thaiwanderer]

IMHO based on what you say the proposal does not OFFEND Thai law in as much as it has very little to do with Thailand other than the subject land being located in Thailand but therein lies the problem.

If as appears the transaction and sub-lease is entirely offshore and not registered in Thailand you have no protection in Thai law.

The Austrailian contract can of course be litigated in Austrailia if set up correctly but even if the Austrailian company has assets in Austrailia in the event of a dispute would you be interested in going against any of their Austrailian assets since its the use and or value of the Thai land that you would presumably wish to chase?

I am not at all sure whether an Austrailian court judgement would have any bearing on land in Thailand (i dounbt it) and even if it did the Austrailian company may well have lost / transferred its interest in the land before any such enforcement - so may just be a hollow and expensive victory then.

There may of course be tax and enforcement advantages to having offshore agreements in addition to a registered interest in the land (as lessee / sub-lessee) but I do not see how these offer any real advantage (and in fact see real weakness) without your having an appropriate interest in the Thai land registered correctly in Thailand.

Why exactly would you not want to register the sub-lease in Thailand (or even better have the lease cancelled and a new lease with the freeholder)?

Edited August 14, 2009 by thaiwanderer