Leasing

[katabeachbum]

The reason that just about all owners do not give a 3 years or more lease is that ...

1) A 3 year or more lease must be registered with the land office.

2) Tax must be paid (by the land owner) on the annual lease income.

3) Once a lease is registered the owner cannot revoke it within the term of the lease (other than the lease holder dies)

4) The owners does not want the Thai government knowing anything about his/her business and assets.

These days owners prefer to to lease year by year, then they can jack up the rent each year as they see fit.

5. There are 3 different taxes involved in a lease extending 3 years.

a Tax at land office for registering

b Incometax

c tax to tessabaan

b and c goes for shorter lease too, but government dont know these leases cause they are not registered

There are several court-rulings on leaseagreements extending 3 years and not registered. The most interesting cortruling I read was a 3 + 3 year agreement canselled by the court within one year after entering agreement. Deemed not valid because illegal to agree more than 3 years without registering (and paying taxes). The lessee did not get any refund for the 3 years payed upfront, the owner had to pay incometax and tessabaantax.

A 3 year lease can be agreed with one party, and a new 3 years lease can be entered at the same time starting when first lease expires, agreed with another party though

All the above is according to law. The most common reason for not entering/ register a lease more than 3 years for bars, is that they dont have land deeds. Or land deed is morgaged in bank, making lease register impossible. Or in best case, 20 bars in one land deed. Only possible to register one lease in one land deed.

When leases are issued for lets say 5 years (and of course not registered), this is done to make it easy for owner to determine lease within the 5 year period, in court if needed. 3 mill baht keymoney, and thrown out by the court in 10 months A 3 year prepayed lease would not be determined by the court

[flightest]

I have a some really good lease agreements which I am happy to share with you that are cut and dried in your favour. Just PM if you want them.....and good luck

hi will do

Edited October 14, 2009 by LivinginKata

[rawaireddragon]

Then I would "extend", or rather make a new lease before entering any agreement.

In your own interest, dont enter more than 3 years agreement unless registered in land deed, cause that makes the agreement illegal and can be canselled by landlord or court at any time. a 3 + 3 year lease is by law illegal unless registered and payed taxes for.

Edit BTW, I have no experinece with bars, but 6,5 years of property purchase/sale/lease/rental in Phuket

PLEASE

if it is not registered it is not legal....1 year...3 year......... 30 year.....your experience with property has served you well.........

anything more than 3 years if it registered is saleable.....anything under is not............

[LivinLOS]

PLEASE

if it is not registered it is not legal....1 year...3 year......... 30 year.....your experience with property has served you well.........

anything more than 3 years if it registered is saleable.....anything under is not............

Thats not corect.. Just because a lease is not registered on the land title does not make it illegal, it merely makes it (hard to enforce) contract law.. And contracts can be transferable depending on the text of the contract.

You really think tiger (with a head lease, sub leasee, then sub bars) or any of the bar sois really registers every bar handover on its land title ???

[rawaireddragon]

PLEASE

if it is not registered it is not legal....1 year...3 year......... 30 year.....your experience with property has served you well.........

anything more than 3 years if it registered is saleable.....anything under is not............

Thats not corect.. Just because a lease is not registered on the land title does not make it illegal, it merely makes it (hard to enforce) contract law.. And contracts can be transferable depending on the text of the contract.

You really think tiger (with a head lease, sub leasee, then sub bars) or any of the bar sois really registers every bar handover on its land title ???

Sorry, my post was unclear...of course an unregistered is not illegal...but it is also not legal.....of course 99.999 percent of bars do not have a regisetered lease. And yes they can be sold...the point I was trying to make in fairness to the OP who is considering taking a bar to be armed with the facts. A registered lease is more saleable than a non registered.

[katabeachbum]

Sorry, my post was unclear...of course an unregistered is not illegal...but it is also not legal.....of course 99.999 percent of bars do not have a regisetered lease. And yes they can be sold...the point I was trying to make in fairness to the OP who is considering taking a bar to be armed with the facts. A registered lease is more saleable than a non registered.

A bar lease is normally not possible to register due to the reasons earlier mentioned. Tiger in Bangla is a good example.

A lease not exceeding 3 years is legal even if its not registered, but harder to enforce than a registered lease.

Wether if its registered or not, does not make it possible to transfer it to another person if not agreed on in the lease. The law says a lease is not transferable unless agreed upon. Its also not legal to rent out leased property unless agreed on in lease, if so happens the owner can have the lease easily determined. If its agreed on you have something to sell or rent out.

[keestha]

As a rule the lease contract will be a standard contract you can get in any shop selling office materials such as stationary, pencils, rulers and so on. What has to be filled in are names, duration of the lease, and how much has to be paid at what intervals. Especially in case this standard form is not used, be sure to check/have somebody check the Thai text which is legally binding, don't rely on a translation.

You definitely need a lease in your own name, and meeting the landlord make sure he doesn't want key money.

Hate to rehash what other people have already said, but one big question remains: If this is a profitable business, why doesn't the old owner try to sell it?

[flightest]

thanks to everyone for all the replys,