Lease ( Big Con ) ?

[choppertony]

First of all can I say Hy to everyone here and connected to this site , I have read topics on this site for several yrs and gained much usefull imformation and enjoyed a lot of the posts . I have been to Thailand nearly 50 times in the past 15yrs, So you could say Ive most definatley got the T.Shirt, Ive witnessed all kinds of scams and dodgy goins on but also come to really love the place , I,ve been all over Thailand but my favourite place is Phuket .

Which brings me to my question , I have a Thai wife , She,s been here in U.K. with me now for nearly 7 yrs , I,m 47yrs old and plan to retire to Thailand in 3yrs time when I,m 50 . Now seems a very good time to be looking at property because of the World recession there are some bargains to be had , But this 30yr lease of land with the options of 2 further 30yr leases really bothers me , There are so many different versions of this I,ve heard , A very good friend of mine who lives in Phuket running a successfull guest house and coffee shop business say,s that the extra 2, 30yr terms are absolute <deleted> and all the estate agents and dealers know this ! The land owner whom you agreed the lease term with could well be dead before you reach the end of the term , His heirs to the land who did,nt sign the lease anyway could want the land back , Or if the land owner is still alive then he could insist he wants it back ! Thai law allows a 30 yr lease and anything after that requiring a new lease agreement which the owners are not obliged to do no matter what anyone tells you , So to be absolutley safe would the best way for me to own a house outright with the land be to put it all in my wifes name ? I,m not saying I don,t trust my wife but who knows what might happen in the future . If I do decide to go down this route then the house will be built near a town called Thungsong ( nakornsrithammarrat ) rather than my preferred place of Phuket , I can build a very substantial home there for couple million baht which would be 10 times that in phuket . Its only couple hrs drive to phuket, But my ideal is phuket more farangs and all my friends there and normality for me .

Please any advice would really be appreciated .

[thaiphoon]

Moving to real estate, housing, house and land ownership forum

[Phatcharanan]

Its true.

The only guarantee is the original 1 x 30 year lease.

If in doubt you really should consult a specialist lawyer.

[ThailandTommy]

You are right in thinking you are only safe for the 30 year period, I used to own property which I did via company ownership, it was quite straight forward but you will need to use a solicitor.

If as you state you are thinking about buying land and building, you need much the same as the UK, i.e. architects plans building permission etc again you will need a solicitor.

If you put the land in your wife's name that obviously means although the house would be yours the land on which it stands belongs to your wife, if you are unlucky enough to encounter problems within your relationship at a later date, the owner of the land (being Thai) may well be able to cause you some inconvenience.

I have friends with Thai wife's/partners who have purchased land and then built their home, they have put the land in the wife's name and immediately drawn up a 30 year rental agreement with the rent being fixed, it is worthy of note that they actually make the rental payments to their wife's by standing order.

Even then if for example after 10 years you have marital problems you will be left with a property that you may want to sell however it will only have a 20 year lease.

There is a saying that is regularly used; "Never spend more money on a property than you are not prepared to walk away from"

Good luck!

[torrenova]

An option I am considering is the purchase of a property with a mortgage in her name backed by me as a financial guarantor. I am also looking at then having a second charge on the property for a large amount to cover any future capital appreciation.

Why ? largely because of the reasons you are dealing with but also because we have a daughter and if I pre decease my partner, which is likely, who knows what influences could come into play and leave my child without a home etc.

With my idea, I would "lose" the deposit I put down but working on your Bt2m idea and 20% deposit, your initial risk is Bt400,000. Financing the remaining Bt1.6m at 6% over 25 years on a repayment basis would cost Bt10,309 a month. Total interest would come in at Bt1.5m but you would benefit from any interest you could get on the capital. If say you could get 4% then you would be paying an effective interest rate of only 2%.

If everything went pear shaped then as it was bought after marriage, the house would be common property and would be split 50/50. She would presumably have no means of buying you out but you do not know, if she had an income. If you were able to get a charge on the property then you would have to be repaid at the same time the mortgage was redeemed before any surplus was divided. You may still not come out 50/50 but she would not have a total stranglehold over you.

My feeling is that if you bought or built near her home town, where her relatives live, then it would be very easy for her to exert pressure on you. If you build on her land then forget it. In Phuket you could buy a condo in your name and easily argue that you would need it in your name as the next buyers would not buy it from a Thai. If she puts pressure on you to build or buy next to mama and papa then you have to consider the motives. She could just as easily sell a condo after you are gone and go live there.

I haven't got the full package in place at the moment but the idea of just putting perhaps 25 or 30 years of an annual factory salary (6k a month, 72k a year, 27.7 years = Bt2m) into someone's hands is not something I would do in the UK (say £15k at 27.7 years =£417,000). It is a lottery win for UK people and a mind bogglingly enormous "money too mutt" amount for your rural Thai worker. Having someone professionally "disappeared" would cost a fraction of that.

My feeling is to work out the most easy and painless exit route well before going into it. No harm done if you never need it but security of sorts if you do. I am also a while off doing this and am more than happy to talk through thinks off board if you want.

[choppertony]

Thanks Chaps , Some thought provoking replie,s . Ive alway,s looked after number 1 , Who else is gonna doit ? Although I do love my wife there is always the possability it could go wrong, So I don,t want to find myself sometime in the future with nothing , An old friend of mine who owned an ice cream business having several van,s married a Thai Lady ! He bought a massive Rubber Plantation and built a nice home on it , all in his Thai wifes name spending over £60,000 , He returned to the U.K. for a month to tye things up. On his return to( His ) home in Thailand there were complete strangers in the house , She,d sold it and went missing ! Whilst he was,nt broke you can imagine the state he was in .

That ain,t gonna happen to me . I have thought of forming a company to buy land but again the question of 49% of shares in my name , You can gain the voting writes but the other partners, nomonee,s ? not putting any money in , which surely is ilegal ? and won,t accounts have to be done on a company that actually does,nt do anything and its only asset this piece of land that I build a house on . I,m thinking problems again.

I know if I reach 80yrs old when a 30yr term is up , I,l have had a good innings , But 100 would be better . You don,t wanna be doin lease agreements in 2040 when prices could be through the roof , probably most if not all your savings have gone and you,ve only got a bit pension .

I,m looking at all options , maybe a Condo would be better or should I say safer option .

The land at Thungsong is my wifes land and yes the family are everywhere around there , Whilst I do get on very well with all of them ( apart from when my beer vanishes from the fridge ) , Things would be rather soured if we did split up . Its certainly a headache , I hope I,m not sounding too paranoid , My wife is great , could,nt ask for better , but you never know ,besides she will no longer be the farang ,it,l be me , . Thanks all for your thoughts and advice .

[choppertony]

An option I am considering is the purchase of a property with a mortgage in her name backed by me as a financial guarantor. I am also looking at then having a second charge on the property for a large amount to cover any future capital appreciation.

Why ? largely because of the reasons you are dealing with but also because we have a daughter and if I pre decease my partner, which is likely, who knows what influences could come into play and leave my child without a home etc.

With my idea, I would "lose" the deposit I put down but working on your Bt2m idea and 20% deposit, your initial risk is Bt400,000. Financing the remaining Bt1.6m at 6% over 25 years on a repayment basis would cost Bt10,309 a month. Total interest would come in at Bt1.5m but you would benefit from any interest you could get on the capital. If say you could get 4% then you would be paying an effective interest rate of only 2%.

If everything went pear shaped then as it was bought after marriage, the house would be common property and would be split 50/50. She would presumably have no means of buying you out but you do not know, if she had an income. If you were able to get a charge on the property then you would have to be repaid at the same time the mortgage was redeemed before any surplus was divided. You may still not come out 50/50 but she would not have a total stranglehold over you.

My feeling is that if you bought or built near her home town, where her relatives live, then it would be very easy for her to exert pressure on you. If you build on her land then forget it. In Phuket you could buy a condo in your name and easily argue that you would need it in your name as the next buyers would not buy it from a Thai. If she puts pressure on you to build or buy next to mama and papa then you have to consider the motives. She could just as easily sell a condo after you are gone and go live there.

I haven't got the full package in place at the moment but the idea of just putting perhaps 25 or 30 years of an annual factory salary (6k a month, 72k a year, 27.7 years = Bt2m) into someone's hands is not something I would do in the UK (say £15k at 27.7 years =£417,000). It is a lottery win for UK people and a mind bogglingly enormous "money too mutt" amount for your rural Thai worker. Having someone professionally "disappeared" would cost a fraction of that.

My feeling is to work out the most easy and painless exit route well before going into it. No harm done if you never need it but security of sorts if you do. I am also a while off doing this and am more than happy to talk through thinks off board if you want.

Thanks a lot , This seems a good idea , Whilst I enjoy my time at Thungsong and know loads of people there , 99% Thai, there are a few

English teachers there and an English friend who managers a quarry , If I were to live there it would probably mean monthly jaunts acoss to Phuket or up to Koi Samui to see some farang faces and talk them to death !

Yes the land is my wifes , and the thought had crossed my mind if we fall out maybe the reminding of her to me of who owns the land thrown in my face or if we did split up , Then I,m well and trurly up the creek , We have some good friends there , Some well todo Thai people but also some very dodgy mafia types as well ! I,m pretty sure if we split our friends would overnight be only my wifes friends .

I,m thnking more towards the Condo in Phuket , at least there,l be a gang of us wanting our leases renewed ! I like the idea of insisting on it been in my name to assist in any future sale , We have a good marriage and I hope it stays that way but better safe than sorry .

[hhgz]

Harry Truman mentioned that he wished he had one-handed advisors - his current advisors answered every question with "one one hand <this>, but on the other hand <that>. As you consider condo vs home, you're doing the same thing. A Phuket condo in your name costs more than a home on your wife's property, out in the hinterlands. The question that only YOU can answer: is the security of owning a home in your name worth the extra money?

[apetley]

A friend of mine is just embarking on a court case after finding out his Thai builder will be holding him to 30 years only.

Previously he was fed the line about being able to extend +30 years. Unfortunately the relationship has soured hence the he has been told 30 years only.

I would go the usufruct route which can be setup for a lifetimes use. Easy to do at the local Amphur although you may wish to employ the services of a legal adviser to make sure it's watertight.

[spacebass]

The Thai land lease thing is not a special law designed in any way to accommodate or enable foreigners to control land in Thailand or for that matter prevent them from doing so. It is probably designed to ensure rich Thais do not lose effective ownership of their lands to lesser Thai mortals as effectively happens in the UK with its common 99 year and even 999 year leases plus supplementary legislation to protect lessees.

A typical farang analysis that the Thai leasing system is designed to con them when the Thai Government makes it very clear it is against the law for farangs to own or control Thai land by any means, marriage making no difference whatever to this edict, even as every day farang businessmen perpetrate their con of illegal company ownership (which could come home to roost at any time) and trying to twist the land lease laws to their advantage quite brazenly and dishonestly suggesting that 30 + 30 and even 30+30+30years are available. I doubt if these options are ever mentioned in Thai society.

Why do people even want to deal with these developers and real estate agents who are the real con men, not the Thai legislature.

[thaiwanderer]

A friend of mine is just embarking on a court case after finding out his Thai builder will be holding him to 30 years only.

Previously he was fed the line about being able to extend +30 years. Unfortunately the relationship has soured hence the he has been told 30 years only.

I would go the usufruct route which can be setup for a lifetimes use. Easy to do at the local Amphur although you may wish to employ the services of a legal adviser to make sure it's watertight.

Who exactly 'fed him the line' and why did he swallow it?

Even a cursory glance at his lease and a vague passing interest in his investment would have told him that the extra time is an option to renew that is contractual only and he could then have assessed the weight he gave it accordingly.

[apetley]

A friend of mine is just embarking on a court case after finding out his Thai builder will be holding him to 30 years only.

Previously he was fed the line about being able to extend +30 years. Unfortunately the relationship has soured hence the he has been told 30 years only.

I would go the usufruct route which can be setup for a lifetimes use. Easy to do at the local Amphur although you may wish to employ the services of a legal adviser to make sure it's watertight.

Who exactly 'fed him the line' and why did he swallow it?

Even a cursory glance at his lease and a vague passing interest in his investment would have told him that the extra time is an option to renew that is contractual only and he could then have assessed the weight he gave it accordingly.

Builder is a farang. Holder of the lease is the farangs Thai wife.

I did tell him to be careful but he did believe the wifes story about no problem extending the lease.

Since then several instances of inflating service charges and utility fees have soured the relationship.

When the dispute escalated the builders wife let slip about not extending the lease.

He has engaged the services of a Thai lawyer for now to see what can be done.

I for one think he has few grounds for appeal and was a little naive to believe what the builder and wife promised and told him.

[thaiwanderer]

A friend of mine is just embarking on a court case after finding out his Thai builder will be holding him to 30 years only.

Previously he was fed the line about being able to extend +30 years. Unfortunately the relationship has soured hence the he has been told 30 years only.

I would go the usufruct route which can be setup for a lifetimes use. Easy to do at the local Amphur although you may wish to employ the services of a legal adviser to make sure it's watertight.

Who exactly 'fed him the line' and why did he swallow it?

Even a cursory glance at his lease and a vague passing interest in his investment would have told him that the extra time is an option to renew that is contractual only and he could then have assessed the weight he gave it accordingly.

Builder is a farang. Holder of the lease is the farangs Thai wife.

I did tell him to be careful but he did believe the wifes story about no problem extending the lease.

Since then several instances of inflating service charges and utility fees have soured the relationship.

When the dispute escalated the builders wife let slip about not extending the lease.

He has engaged the services of a Thai lawyer for now to see what can be done.

I for one think he has few grounds for appeal and was a little naive to believe what the builder and wife promised and told him.

Exactly and anyway he has no grounds until the breach, which if it occurs will be at around the end of the first 30 years so there's nothing he can do at the moment anyway.

When the breach occurs he may have a contractual right against the original lessor (builder's Thai wife?) who may not still own the land and or may have no assets.

If he genuinely relied on oral assurances and or didn't consider possibilities (even non-malicious ones like lessor dying) then 'naive' is a little kind imho.

[eljeque]

As you are married to the property owner, it wuld be better to have someone else have the mortgage with her. Meaning your brother or a friend, or....

And, it is a good idea to have the mortgage for a lot more than the property is worth. Any additional mortgage which is made with her, IF NOT INCLUDED ON THE CHINOTE AND REGISTERED AT THE LAND OFFICE, could simply not be accepted at the court house.

Alternate personal loans could also be witten and not have date on them, and then they can be dated upon anytime that problems appear.

The mortgage holder wuld then go to court to recover the debt, and the other debt holders would need to go to court as well, and then register their debt at the auctin house before the auction. Upon auction, the mortgage holder would be paid off first, and then the other lien holders / debt holders would be paid off.

[dmax]

buy a condo instead

[BEENTHEREDONETHAT]

Go for the Condo, legally yours no hassle. They cost more than a house but then you can most likely sell it for more than a house.

[dzocor55]

A friend of mine is just embarking on a court case after finding out his Thai builder will be holding him to 30 years only.

Previously he was fed the line about being able to extend +30 years. Unfortunately the relationship has soured hence the he has been told 30 years only.

I would go the usufruct route which can be setup for a lifetimes use. Easy to do at the local Amphur although you may wish to employ the services of a legal adviser to make sure it's watertight.

Who exactly 'fed him the line' and why did he swallow it?

Even a cursory glance at his lease and a vague passing interest in his investment would have told him that the extra time is an option to renew that is contractual only and he could then have assessed the weight he gave it accordingly.

Builder is a farang. Holder of the lease is the farangs Thai wife.

I did tell him to be careful but he did believe the wifes story about no problem extending the lease.

Since then several instances of inflating service charges and utility fees have soured the relationship.

When the dispute escalated the builders wife let slip about not extending the lease.

He has engaged the services of a Thai lawyer for now to see what can be done.

I for one think he has few grounds for appeal and was a little naive to believe what the builder and wife promised and told him.

Exactly and anyway he has no grounds until the breach, which if it occurs will be at around the end of the first 30 years so there's nothing he can do at the moment anyway.

When the breach occurs he may have a contractual right against the original lessor (builder's Thai wife?) who may not still own the land and or may have no assets.

If he genuinely relied on oral assurances and or didn't consider possibilities (even non-malicious ones like lessor dying) then 'naive' is a little kind imho.

i am in the process of buying,,and over the last 2 weeks had decided to give up,,leases usufructs ltd companies,so many different opinions,job to get hold of a lawyer you can trust,had recomendations for lawyers from people on this site only to find when looking deeper that in one case the lawyer was his wife and another one worked for the guy recomending him, i am back looking again, paid deposit on place near hua hin last september american developer/thai wife who recommended ltd company route even paid to set up the company,i have certainly decided against this ..my main concern is to be able to leave something or the use of something to my kids, i have decided that i will get my thai daughter in law to buy land and i buy house on a 30 year lease and get a written and signed agreement from her stating that after 10 years when my daughter is 20 she will give me a usufruct in my daughters name for her lifetime,,,or maybe even get a predated usufruct drawn up and signed ,,do you think that might work,,,,,,,,anyone know a good lawyer? a real one dave

[bellste]

 No. The best thing is to rent a house, on a one year basis. Then you can move when the contract is finished. If you put everything in your wifes name, and get divorced, you could end up with nothing. Don't bye or lease anything in Thailand, that you are not prepared to give away. 

You have no rights in this country. The Thais always win, and the winner takes it all.

Edited January 23, 2010 by bellste

[RAZZELL]

If you're are worried there are only three options:

1) Rent.

2) Condo in your name.

3) Spend an amount you can afford to walk away from. If you're going to build "in the sticks" you could get a palace built for 1-2m baht.

Also, you seem to think they'll be "capital appreciation"? I wouldn't count on it

RAZZ

Edited January 23, 2010 by RAZZELL

[LennyW]

buy a condo instead

You cannot compare a condo with a house, regardless of ownership methods - completely different lifestyle!

[Gary A]

Everyone wants to protect the property they buy from their wife if things fall apart. In my situation, everything is in my wife's name and I would walk away if things were to go bad. Why would I walk away? No way would I live out in the boonies without my wife. I would be headed back to the farang ghetto quite quickly. If the house were in a farang area, it may be worth considering but if it is out in the boonies, it's doubtful that you would want to live there alone.

[MJo]

Well said Gary,

In wife's name and I would do the same, just walk away. Although my place is in BKK but yes i would do it without any issues. Just to make sure my kids and their mother, who takes good care of them, will have decent place to stay.

I have never understood the need to protect the house from the wife so that kids will be ok. Mothers, regardless of nationality tend to love their kids and take care of them best they can. There is no way she would sell the house, move to a tin shack and dump the kids in case of divorce.

Then again, if you plan to spend your golden retirement years here with 20 year old rent a wife get the land from someone outside family and do usufuct or lease. If there is need to leave something to your family back home buy a condo.

[bustersizemore]

 No. The best thing is to rent a house, on a one year basis. Then you can move when the contract is finished. If you put everything in your wifes name, and get divorced, you could end up with nothing. Don't bye or lease anything in Thailand, that you are not prepared to give away. 

You have no rights in this country. The Thais always win, and the winner takes it all.

I agree.

The laws in Thailand reflect the Xenophobic mindset of most Thais and put foreigners at a serious disadvantage. Purchasing land (through corporations, etc) or leasing both expose foreigner buyers to significant financial risk. Even purchasing an (overpriced) condo in Thailand exposes a foreign buyer to problems associated with disfunctional condo associations, a flawed recording system, etc, etc (many problems which would not exist in other countries).

Anything a foreigner owns in Thailand is subject to seizure by a corrupt legal system that preys on foreigners.

It doesn't make sense to invest in Thailand. 

[perconrad]

I will recommend that you either buy a condo or rent a house, this is based on my experience.

I paid for a house in my wifes name and I have a 30 year lease contract, setup by a good laywer, the house is in the middle of Phuket, 6 km from Surin and Bang Tao beaches.

Now our relationship has ended and I have had and still have a lot of problems with her and some of the family, some of the problems I don't think you would believe.

I am happy now, that we did not build a house in Nakhon Si Thammarat Province, where the family lives, then I have had to leave the house, for there are a lot of dangerous types in that area.

For several years we had a good life together, but suddenly it went wrong.

I live in the house, but have offered the wife, that we can sell and share 50/50 and she has accepted this, since her money dried up when she left me.

So, if there are someone who want a house in Phuket, 3 bedrooms, 3 bathrooms, large living room, kitchen and 2 salas, then we have one for sale at baht 3.000.000

The garden is big enough to make a swimmingpool 4x6m and a carpark.

If the house is sold I will rent one, there are a lot for rent, I will never buy a house again, with the laws in Thailand.

Conrad

Edited January 26, 2010 by perconrad

[choppertony]

Great reply,s and thoughts , Some of my fears have been answerered and confirmed , The way forward for me will be a Condo , I will be in Thailand again for the whole of April , Where I will be attending the bike week in Phuket and seeing in the Thai new year . We will be looking around at some Condo,s , seeing whats on offer , Ive seen plenty for sale on the Internet througth different Phuket Company,s We have picked out a few to possibly view , but I,l also be looking at privately advertized property,s for sale .

My wife prefares to have a house built , but we have came to an understanding where we will upgrade mama,s house , possibly spending 250,000 baht ! ( Be better for us when we stay there ) ! Maybe its an affordable price to pay to save face and much better than spending 2 million on a home which is,nt really where I wanna be and could lose all anyway .

Thanks again and I will procede with Caution . .