Superficies Usufruct & Right Of Habitation

[caf]

I am seeing some lawyers next week - and will keep members informed - but what do people think of the best ways to protect one's home here.

1.Superficies: 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 buildings structures or plantations upon or under the land.

transferable and inheritable, at end must restore land to former condition or owner may buy at fair market value at his instigation.

2.Usufruct: An immoveable property may be subjected to a usufruct by virtue of which the usufructory is entitled to the possession and enjoyment of the property.

exercise of the right can be transferred by the usufructory. owner can not object

3. Habitation: A person who has been granted a right of habitation in a building is entitled to occupy said building as a dwelling place without paying rent

not transferable.

i will check and perhaps members can comment but my understanding is that if a usufruct is creatred after marriage either party can cancel it. also more than one usufruct can be granted by the owner.

caf

[surayu]

Hi Caf, i don't know if i am remembering this the right way, however i think that in case your wife try to cancel the usufruct, you can add a lease on it as it seems that it can be cancelled only if doesn't damage a third party(in this case the person leasing from the usufructuary) and i have been told that doing this "lease" at the last minute apparently is not an issue either.... i hope someone can give you more detailed info and good luck to you.

[stgrhe]

Hi Caf, i don't know if i am remembering this the right way, however i think that in case your wife try to cancel the usufruct, you can add a lease on it as it seems that it can be cancelled only if doesn't damage a third party(in this case the person leasing from the usufructuary) and i have been told that doing this "lease" at the last minute apparently is not an issue either.... i hope someone can give you more detailed info and good luck to you.

This is also my understanding. 

[Khun Jean]

That is not quit true.

If there is an extra lease on it to a third party the usufruct can still be canceled in that circumstance. The lease is separate from the usufruct and the obligation will transfer to the owner of the land. The lease will still be honored and thus not taking any rights away from the third party.

This will still leave you without a right to use the land. The third party now has the rights.

How would you at the start word the lease so that the third party is not the one with control from the start?

In my understanding the best way to protect yourself when having a usufruct from your spouse is to include a third party on the usufruct. Or 'buy' the land in the name of a relative of your wife, get the usufruct and later transfer the land to your wifes name.

How much later is difficult to say, too short and it will be seen as a way to circumvent the law, too long and there might be relationship problems between the relatives. Not to say the spouse can be upset by this from the start. In that case (and others), don't buy if you can not afford to walk away from it.

Asking a few lawyers their opinions can never hurt, but be aware that most lawyers don't know the law that good and can not in any way be held responsible when things go wrong. Buyer beware x 3. Have a look at www.samuiforsale.com for some good articles about this stuff.

Edited January 28, 2010 by Khun Jean

[caf]

Thanks everyone. The last post is particularly pertinent. I am seeing a lawyer tomorrow - recommended by a farang as being a non-typical thai lawyer (!!!) - and will see another one later and compare. I will report back.

A superficie would grant a right to own buildings on the land as well as being for life. Anyone any ideas on that?

caf

[caf]

A good meeting today. Good english and very knowledgable.

The benefit of a superficie is that it is transferable and transmissible by way of inheritance, Has many advantages over usufruct and should cost the same.

Inheritance is presumably only applicable on the period option ( up to 30 years) and not life , so the lawyer should really have asked my age. Depending on that option if a 30 year term was taken it would mean that the Thai partner could not take the property back on death but only at the end of the term. (I know some posters are worried that their partner could be better off if you are dead than alive )

The lawyer missed the point that unless specifically specified the land owner can grant more than one usufruct. That problem does not arise with superficie.

The lease option is expensive in that you would pay a commercial rent for a property you have already paid for.

Overall confident of todays meeting; a lawyer that seemed aware of the need not to have conflicts of interest and who would work for one client.

Why are some lawyers recommending odd options?

Any ideas of fees?

caf

Edited February 2, 2010 by caf

[seaeagle]

I tend to get more than a little bored with many foreigners in this host country of ours who think that superficies and usufructs are the best things since sliced bread. All they do is give a right to occupy and use the land or house. As my lawyer described it to me : "She can't chuck you out!" (As long as it wasn't given by 'her' of course)

And that is a about the extent of the protection you have.

In my book, any investment I make is one that I can turn back into cash if ever I want to. With these, the usufructuary or beneficiary is never the freeholder - that is usually the Thai spouse, other family member, or corporate body. So, who do you rely on to sell the place if ever you want to? Yes, the goodwill of the freeholder. And guess where you stand if you don't have cooperation of the freeholder? Well and truly <deleted>-ed.

So, the message is still the same. Be in a long and happy relationship, or don't spend more than you can give up and walk away from.

[surayu]

I tend to get more than a little bored with many foreigners in this host country of ours who think that superficies and usufructs are the best things since sliced bread. All they do is give a right to occupy and use the land or house. As my lawyer described it to me : "She can't chuck you out!" (As long as it wasn't given by 'her' of course)

And that is a about the extent of the protection you have.

In my book, any investment I make is one that I can turn back into cash if ever I want to. With these, the usufructuary or beneficiary is never the freeholder - that is usually the Thai spouse, other family member, or corporate body.

So it's seems that every business around making money or not is operated by the freeholder directly, are you really sure about it? it doesn't look like this to me....

So, who do you rely on to sell the place if ever you want to? Yes, the goodwill of the freeholder. And guess where you stand if you don't have cooperation of the freeholder? Well and truly <deleted>-ed.

In my understanding, a well made usufruct will not require any further action from the freeholder (he doesn't even have to know about it) if you want to lease one of your property to a business/private or even the whole land

[Khun Jean]

In my understanding, a well made usufruct will not require any further action from the freeholder (he doesn't even have to know about it) if you want to lease one of your property to a business/private or even the whole land

You will need the cooperation of the landowner because the lease has to be written on the chanot. As the one who has a usufruct is not in possession of this document a lease without the owners consent is difficult if not impossible.

The land office will ask the land owner to agree with the lease.

What you can do is make a 3 year or shorter lease. This does not have to be registered and for this reason you don't need the owners cooperation.

[jazzbo]

As mentioned above Samui for Sale has an interesting page at:

http://samuiforsale.com/nominee_owner.html

[surayu]

You will need the cooperation of the landowner because the lease has to be written on the chanot. As the one who has a usufruct is not in possession of this document a lease without the owners consent is difficult if not impossible.

The land office will ask the land owner to agree with the lease.

What you can do is make a 3 year or shorter lease. This does not have to be registered and for this reason you don't need the owners cooperation.

So do you recon that the landowner will need to grant this again, despite the usufruct clearly stating that the usufructuary it's allowed to lease or sublease the land at his own wish without any further action needed by the landowner (with his signature on it) and a mutual agreement that the usufructuary will be the "keeper" of the Chanotes?

[caf]

I tend to get more than a little bored with many foreigners in this host country of ours who think that superficies and usufructs are the best things since sliced bread. All they do is give a right to occupy and use the land or house. As my lawyer described it to me : "She can't chuck you out!" (As long as it wasn't given by 'her' of course)

And that is a about the extent of the protection you have.

In my book, any investment I make is one that I can turn back into cash if ever I want to. With these, the usufructuary or beneficiary is never the freeholder - that is usually the Thai spouse, other family member, or corporate body. So, who do you rely on to sell the place if ever you want to? Yes, the goodwill of the freeholder. And guess where you stand if you don't have cooperation of the freeholder? Well and truly <deleted>-ed.

So, the message is still the same. Be in a long and happy relationship, or don't spend more than you can give up and walk away from.

No one said the usufructory or superficie is an owner, so your concerns are not relevant. With a superficie you can get the value of your house back and there are certain restricted rights of transferability and inheritability. Your post is not helpful, just the usual moans. We have toaccept here that we can not and do not OWN land - however it is dressed up. The thread is about securing maximum protection.

If you are " getting a little bored" why did you open the thread. Go to one that interests you or to which you can contribute

caf

[seaeagle]

Okay, caf, I now note your original post said "protect". Your thread seems to be more concerned about protecting the home, but not the invested money that bought the home.

In that case, to protect your occupancy of the home, the usufruct and superficies is fine, because you can't be chucked out during whatever term of agreement has been made. Notwithstanding, one directly from the wife can be voided.

However, I don't think my points are useless. They are helpful, and I'm certainly not moaning. Many people here want to also protect their cash investment, not just the bricks they live in. Few would want to continue to live and occupy a house where an estranged family was close by, even if they had an agreement allowing them to do this.

Most would wish to sell up and leave. It's important to know that a usufructuary or beneficiary couldn't do this. Okay, you may create a lease, but that's only like getting a monthly income, or a small lump sum relative to the real value of the property. You simply can't realise your investment back without the freeholder agreeing.

Put it another way, what does a buyer look for? Either freehold title or a long lease. It's more than likely that a usufructuary couldn't give either of these. You say you can get the value of your house back. Technically, yes, but who on earth would enter into a property purchase with a deal like this?

[caf]

Okay, caf, I now note your original post said "protect". Your thread seems to be more concerned about protecting the home, but not the invested money that bought the home.

In that case, to protect your occupancy of the home, the usufruct and superficies is fine, because you can't be chucked out during whatever term of agreement has been made. Notwithstanding, one directly from the wife can be voided.

However, I don't think my points are useless. They are helpful, and I'm certainly not moaning. Many people here want to also protect their cash investment, not just the bricks they live in. Few would want to continue to live and occupy a house where an estranged family was close by, even if they had an agreement allowing them to do this.

Most would wish to sell up and leave. It's important to know that a usufructuary or beneficiary couldn't do this. Okay, you may create a lease, but that's only like getting a monthly income, or a small lump sum relative to the real value of the property. You simply can't realise your investment back without the freeholder agreeing.

Put it another way, what does a buyer look for? Either freehold title or a long lease. It's more than likely that a usufructuary couldn't give either of these. You say you can get the value of your house back. Technically, yes, but who on earth would enter into a property purchase with a deal like this?

Thanks for that reply.

You are right, as I said in my opening post, the thread is about protecting the use of the land and the home. And as I said in my last post we all accept we can not own land here ( with some few exceptions) so investment is always something one must be prepared to walk away from.

As I understand it, a usufruct can be voided in certain circumstances by one of the parties unless to do so would affect a third party ( the reason often given for naming a third party in the usufruct) but a superficie can not be so voided.

For usufructs the land and home are one. For superficies the home can be owned by whoever is given the right of superficie. It can be transferred to a third party or sold at what the court deems a fair value to the land owner. The right to own the home can be given in inheritance ( up to 30 years) but the nearer the beneficiary gets to the end of the 30 year term the less the value of the home will be. Best option then might be to sell the home as a break up of materials, which might prompt a more realistic offer.

Most buyers, knowing the land laws, are not looking for investment - they are looking for protection of a residence.

My topic is about protecting the foreigner given the the current land laws and trying to prompt a discussion on legal loopholes.

I have read nothing yet that suggests a usufruct is superior to a superficie; a usufruct can be voided, and it includes the house as an inclusive asset.

Why are usufructs being promoted? I can understand why developers are doing this as the house will revert to them at the end of the term. But lawyers??? ( sorry I forgot what passes under tables )

How much are people paying for superficies? Are there examples of badly worded superficies?

caf

[stgrhe]

 

As I understand it, a usufruct can be voided in certain circumstances by one of the parties unless to do so would affect a third party ( the reason often given for naming a third party in the usufruct) but a superficie can not be so voided.

Your assumption is incorrect because of Section 1469 of the Civil and Commercial Code if we are talking about legally married couples. Read this:

Section 1469 of the Thailand Civil and Commercial Code

Any agreement concluded between husband and wife during marriage may be avoided by either of them at any time during marriage or within one year from the day of dissolution of marriage; provided that the right of third persons acting in good faith is not affected thereby.

[caf]

As I understand it, a usufruct can be voided in certain circumstances by one of the parties unless to do so would affect a third party ( the reason often given for naming a third party in the usufruct) but a superficie can not be so voided.

Your assumption is incorrect because of Section 1469 of the Civil and Commercial Code if we are talking about legally married couples. Read this:

Section 1469 of the Thailand Civil and Commercial Code

Any agreement concluded between husband and wife during marriage may be avoided by either of them at any time during marriage or within one year from the day of dissolution of marriage; provided that the right of third persons acting in good faith is not affected thereby.

I don't think I was as clear as I could have been, stgrhe.

As I said previously, but did not repeat it clearly in the last post, a superficie can be "transferred" by inheritance.

Take a hypothetical example. A man aged 40 receives a life superficie. He transfers the house he owns to his non-Thai eventual heir. The house and use of land are now his eventual heir's until the man dies when the heir can sell the house at market value at the owner's request or on the open market. The land on death remains with the owner. If it had been a 30 year superficie the same would apply: House is the eventual heir's to sell at any time during the 30m year term. Use of land can be transferred to son until end of 30 year term. If the man survives after 30 years he has no right to stay in the house or on the land.

If there are flaws in this argument let's discuss quoting the CCC. Your summary of usufructs was spot on.

In another thread Oracle - who seems to be taking advice on his own admission from the bar of the Red Lion rather than the Thai bar - is still saying 90 year leases are valid. I have asked him to quote the relevant section of the CCC

[Khun Jean]

I don't see the need to use a usufruct or superficie to get 'ownership' of a house.

Foreigners are allowed to own it outright. No need to do difficult about it.

If you have someone you would like to leave the house and land to you could include that person on the usufruct for the land and write a will to make sure (if it does not contradict laws) the person gets the house.

(Oracle mixes up commercial lease and normal lease i think. Most of the time we talk about ordinary people without 40Mb to invest that just want a place to stay in Thailand. Preferably one that can be sold and transfered.)

[stgrhe]

In another thread Oracle - who seems to be taking advice on his own admission from the bar of the Red Lion rather than the Thai bar - is still saying 90 year leases are valid. I have asked him to quote the relevant section of the CCC.

A 30+30+30 years lease has no support by the law. However, the law ("Hire" section of the CCC) supports one extension for a second period of 30 years, IMO theoretically that is, as it depends on the good will of the land owner.

[thaiwanderer]

In another thread Oracle - who seems to be taking advice on his own admission from the bar of the Red Lion rather than the Thai bar - is still saying 90 year leases are valid. I have asked him to quote the relevant section of the CCC.

A 30+30+30 years lease has no support by the law. However, the law ("Hire" section of the CCC) supports one extension for a second period of 30 years, IMO theoretically that is, as it depends on the good will of the land owner.

I'm a bit confused by your post - how is one extension supported by the CCC but not two, three or any number of extensions?

I'm not saying 30+30+30 are safe but am confused by the distinction you make between one and more extensions on the basis of the CCC?

Edited February 4, 2010 by thaiwanderer

[caf]

In another thread Oracle - who seems to be taking advice on his own admission from the bar of the Red Lion rather than the Thai bar - is still saying 90 year leases are valid. I have asked him to quote the relevant section of the CCC.

A 30+30+30 years lease has no support by the law. However, the law ("Hire" section of the CCC) supports one extension for a second period of 30 years, IMO theoretically that is, as it depends on the good will of the land owner.

Correct. that is my understanding too.

(To answer another poster the CCC allows one extension ( with the grace of the landlord) but expressly forbids any further renewal ( presumably as that would effectively be condoning 90 year leases)

We all still await of course a response from the oracle on what sections of the CCC he is relying.

caf

Edited February 4, 2010 by caf

[caf]

I don't see the need to use a usufruct or superficie to get 'ownership' of a house.

Foreigners are allowed to own it outright. No need to do difficult about it.

If you have someone you would like to leave the house and land to you could include that person on the usufruct for the land and write a will to make sure (if it does not contradict laws) the person gets the house.

(Oracle mixes up commercial lease and normal lease i think. Most of the time we talk about ordinary people without 40Mb to invest that just want a place to stay in Thailand. Preferably one that can be sold and transfered.)

Thanks for your reply.

A foreigner can of course own a house but under a usufruct the right of usufruct is granted on the house and land . So at the expiration of the term ( up to 30 years or life) the house is claimed by the owner of the land. And both must be in original and maintained condition.

You can not leave the land to anyone. It always belongs to the owner. A usufruct only gives a right to live on the land. No ownership is allowed in Thailand ( unless you have 40m baht and some other conditions as you have observed.)

A will won't work for giving a house as an inheritance under a usufruct for the reason mentioned above. It is not yours to give. ( I think is why developers are pushing usufructs but I may be wrong) The superficie expressly allows you to build or own a house on the land and the house can be sold, transferred or subject to transfer to an heir(s). If you are alive, the transactions must of course take place within the term of the superficie. At the end of the superficie the house can be transferred or sold, and if an election is made by the owner sold to the owner at market value determined by the court.

That could be a horror scenario as the market value would obviously take account of the fact it is effectively a forced sale. But see my previous post with an example.

caf

[oracle]

In another thread Oracle - who seems to be taking advice on his own admission from the bar of the Red Lion rather than the Thai bar - is still saying 90 year leases are valid. I have asked him to quote the relevant section of the CCC.

A 30+30+30 years lease has no support by the law. However, the law ("Hire" section of the CCC) supports one extension for a second period of 30 years, IMO theoretically that is, as it depends on the good will of the land owner.

Correct. that is my understanding too.

(To answer another poster the CCC allows one extension ( with the grace of the landlord) but expressly forbids any further renewal ( presumably as that would effectively be condoning 90 year leases)

We all still await of course a response from the oracle on what sections of the CCC he is relying.

caf

Renewal options are allowed and enforceable under the civil code, only you could argue that is not secure as it is not registered against the title of the property. In a normal situation this is the case but the supreme court has also ruled that in certain cases renewals are enforceable also if ownership of the land has been transferred during the lease term. It's not always the case that you loose your renewal option if the property has been transferred. As an extra protection the right to transfer to freehold ownership of the land upon full payment is included in the purchase. This option is also legal as foreigners are not absolutely prohibited from owning land. If the BOI rule did not exist you could argue this part of the lease structure could be void, however it is not.

For company ownership, all the rules against this are aimed at foreigners developing land with nominees as this is an absolutely prohibited activity for foreigners. For foreigners owning a holiday home there is really at the moment nothing to worry about. With all panicking and negativism on TV I think quite a few foreigners have skipped a good deal, or panicked and transferred property to their Thai wives or girl friends and opt for a usufruct without reasonable thought.

Companies and 90 year leases are not too bad

[donx]

A foreigner can of course own a house but under a usufruct the right of usufruct is granted on the house and land . So at the expiration of the term ( up to 30 years or life) the house is claimed by the owner of the land. And both must be in original and maintained condition.

I don't understand why you say this. I have a piece of land without any structures on it. Surely I can get a usufruct granted for just the land since there is no house on the land. Why can't I build a house on that land that is soley my house? Why can't I move the house to another property at the end of the usufruct (assuming it ends say after 30 years)? By doing so don't I return the land in its original and maintained condition?

[donx]

"Renewal options are allowed and enforceable under the civil code, only you could argue that is not secure as it is not registered against the title of the property. In a normal situation this is the case but the supreme court has also ruled that in certain cases renewals are enforceable also if ownership of the land has been transferred during the lease term."

What do you mean by "in certain cases"? Which cases are they enforceable and which cases are they not enforceable? And even if they are enforceable, won't you still end up having to pay for the property again at current market value for the right to extend the lease for another 30 years?

"It's not always the case that you loose your renewal option if the property has been transferred."

Not always, but is it usually or mostly the case? Half the time? Very rarely the case? This is too ambiguous an option for someone like me. Perhaps you can identify the supreme court cases that you refer to.

"As an extra protection the right to transfer to freehold ownership of the land upon full payment is included in the purchase. This option is also legal as foreigners are not absolutely prohibited from owning land. If the BOI rule did not exist you could argue this part of the lease structure could be void, however it is not."

For the last 20 years, real estate websites have been commenting that in the future Thailand will allow foreigners to own land. Over the last 8 or so years, it is looking more and more like this will never be the case.

"For company ownership, all the rules against this are aimed at foreigners developing land with nominees as this is an absolutely prohibited activity for foreigners. For foreigners owning a holiday home there is really at the moment nothing to worry about. With all panicking and negativism on TV I think quite a few foreigners have skipped a good deal, or panicked and transferred property to their Thai wives or girl friends and opt for a usufruct without reasonable thought."

I agree with you here regarding the Thai limited company route. If I were really concerned about complete control over land and a house, I would probably find a way to set up a Thai company that truly does engage in a commercial endevour and use that company as a means to provide a residence for myself.

"Companies and 90 year leases are not too bad "

30 year leases are fine. 90 year leases are laughable.

[oracle]

"Companies and 90 year leases are not too bad "

30 year leases are fine. 90 year leases are laughable.

90 year leases rule donx, you are not helping anyone by saying 90 year are laughable. The principle of the 90 year lease is that you make the renewal option to a right that will follow the title of the property based on idea behind supreme court no. 5770/ 1996. If it works for a 3 year lease why not for a 30 year lease? I'm not fully explaining it. And as a back-up you agree the right to freehold upon full payment. I’m sure this right to ownership clause will be valid and you will be deemed the actual owner and ordered to sell within a year. The government is aware of this structure and included it in the latest land office regulations, if they see this clause in the lease the may refuse the lease.

So with a 90 year lease you can go to court when needed and claim your renewal on the terms as agreed, or your ownership rights to the land

You can of course pay the full freehold price for the property and ask to limit the lease to 30 years, and just laugh about the idea behind the 90 year lease. Or a better idea, take a usufruct, it’s free, no taxes, buy in your GF name, no problem at all! and you can rent it out just before you die for another 30 years to your heirs. That’s laughable!!!

[donx]

"Companies and 90 year leases are not too bad "

30 year leases are fine. 90 year leases are laughable.

90 year leases rule donx, you are not helping anyone by saying 90 year are laughable. The principle of the 90 year lease is that you make the renewal option to a right that will follow the title of the property based on idea behind supreme court no. 5770/ 1996. If it works for a 3 year lease why not for a 30 year lease? I'm not fully explaining it. And as a back-up you agree the right to freehold upon full payment. I’m sure this right to ownership clause will be valid and you will be deemed the actual owner and ordered to sell within a year. The government is aware of this structure and included it in the latest land office regulations, if they see this clause in the lease the may refuse the lease.

So with a 90 year lease you can go to court when needed and claim your renewal on the terms as agreed, or your ownership rights to the land

You can of course pay the full freehold price for the property and ask to limit the lease to 30 years, and just laugh about the idea behind the 90 year lease. Or a better idea, take a usufruct, it’s free, no taxes, buy in your GF name, no problem at all! and you can rent it out just before you die for another 30 years to your heirs. That’s laughable!!!

I don't have access to supreme court rulings so I will have to leave the job of researching what that ruling actually states to either you or someone else who can look at that ruling. I will say that just because a ruling works for a 3 year lease doesn't mean it will work for a 30 year lease. I am however curious as to what your renewal terms are. What are you agreeing to pay to extend the lease for another 30 years? Surely you are not going to get the extension for free are you? Will it be current market value? Or is it some predetermined value?

You are the only person I have seen post anything on here touting the 90 year lease as anything close to secure (other than posts made by developers or real estate agents). I am not saying you are completely wrong, but there has been much more evidence provided over the years that refutes your claim.

One more question for you. You claimed in a previous post that you have purchased property using this 90 year lease method. I assume that you bought the property from a developer and that the developer is a Thai company that owns the property where a 30 year lease has been registered on the back of the Chanote land title. If the developer sells the property to another company, or the developer goes out of business and the assets of the developer end up in the hands of some other company, what would force the new owner to extend your lease for another 30 years once the first 30 year lease expires? From everything I had read on this subject, the new owner is only obligated to honor the lease that is attached to the land title. Therefore they do not have to honor any other agreement made by the developer to extend the lease past the original term.

[stevejones123]

If it works for a 3 year lease why not for a 30 year lease?

Surely because a three year lease is much shorter than the maximum 30 year period for a lease.

[thaiwanderer]

"Companies and 90 year leases are not too bad "

30 year leases are fine. 90 year leases are laughable.

90 year leases rule donx, you are not helping anyone by saying 90 year are laughable. The principle of the 90 year lease is that you make the renewal option to a right that will follow the title of the property based on idea behind supreme court no. 5770/ 1996. If it works for a 3 year lease why not for a 30 year lease? I'm not fully explaining it. And as a back-up you agree the right to freehold upon full payment. I'm sure this right to ownership clause will be valid and you will be deemed the actual owner and ordered to sell within a year. The government is aware of this structure and included it in the latest land office regulations, if they see this clause in the lease the may refuse the lease.

So with a 90 year lease you can go to court when needed and claim your renewal on the terms as agreed, or your ownership rights to the land

You can of course pay the full freehold price for the property and ask to limit the lease to 30 years, and just laugh about the idea behind the 90 year lease. Or a better idea, take a usufruct, it's free, no taxes, buy in your GF name, no problem at all! and you can rent it out just before you die for another 30 years to your heirs. That's laughable!!!

The same principles need not apply to 30 year leases as they do to 3 year leases and even if the facts are the same those rulings are not binding precedents anyway.

How exactly does a non-registerable renewal option 'follow the title'?

Foreign ownership by way of inheritance with a resultant forced sale is catered for but how do you propose to uphold a contract the purpose of which from the outset is illegal?

And anyway even if that were upheld and forced sale inevitably results you have only then 'secured' the land for 31 years?

At the very most options to renew give a therotecial right of action against the original landowner who may then not own the land your house sits on or has no money with which to compensate you?

Options for conversion to freehold ownership specifically rely on a future change in the law that the lessee is then entitled to own the land.

For that and renewal options you are then in a tricky area of whetehr past payment is sufficient and how far intervening events may overrule the past decsion.

There is NO magic bullet.

To whatever extent foreigners attempt to circumvent the general prohobition on them owning land decorating it with various paper planes of contracts the general prohibition on ownership should never be forgotten.

All attempts to make more secure structures are really only attempts to disguise whats going on.

They are nearly all pathetic if anyone were to seriously investigate them.

Disinformation gives a false sense of security.

If people take the time to honestly consider their own structures and then take a view on how likely they are to come under scrutiny at any time in the future then they can then decide for themselves if their appetite for risk is sufficient.

Each to their own - but the idea that theres some trick that will make a structure that can always avoid falling foul of the general prohibition on foreigners owning land whilst at the same time allowing foreigners to own land is an absolute conceit.

Edited February 5, 2010 by thaiwanderer

[chiangmaibruce]

Why are some lawyers recommending odd options?

I think Thaiwander has probably already hit the nail on the head, but just to add my thoughts ....

This broad topic of different ways that farang can exercise (or seek to exercise) control over Thai land is fascinating. At the same time I chuckle whenever I see a thread start with something like "what is the best way for a foreigner to buy property in Thailand?". It's really a bit like another regular "which is the best investment for a foreigner in Thailand?". The answer is it depends on the specific circumstances of the person asking the question ... that's why a financial advisor starts by getting you to fill out a big long questionnaire all about you before they even begin to think about what to recommend. a good investment for one foreigner = a bad investment for another.

Now back to property. Yes you have a range of options open to you, and these become increasingly more complicated as people try to invent new ways to circumvent the intent of the law. Many of these approaches have apparently yet to be tested in court - or if they have then people are keeping quiet about it. None of these means of holding Thai property are fabulous or bulletproof - they all have their real & potential strengths and weaknesses. Assuming you are really committed to buying property here (i.e. rather than renting) then the trick is to choose that particular option that best fits with your specific needs/wants/fears/circumstances (essentially in this case, the best of the worst options).

So, that's one reason why "lawyers are recommending odd options" ... because no two peoples circumstances are exactly the same. Another of course is that many lawyers (and staff in Land dept, etc) are just not up to speed with all/some of these approaches.

[oracle]

The same principles need not apply to 30 year leases as they do to 3 year leases and even if the facts are the same those rulings are not binding precedents anyway. How exactly does a non-registerable renewal option 'follow the title'?

There is NO magic bullet.

Disinformation gives a false sense of security.

If people take the time to honestly consider their own structures and then take a view on how likely they are to come under scrutiny at any time in the future then they can then decide for themselves if their appetite for risk is sufficient.

Each to their own - but the idea that theres some trick that will make a structure that can always avoid falling foul of the general prohibition on foreigners owning land whilst at the same time allowing foreigners to own land is an absolute conceit.

That non-registerable renewal options 'follow the title' is based on the same principle why a 10 year lease can be enforceable even though not registered at the land office. I believe the civil code says it’s not as it exceeds 3 years?

The 90 year structure also aims to create a right to ownership upon full payment of the lease and renewals and you will be hand over all documents related to the land. This is not void because of the boi rule. If at any time in the future someone wants to claim back your purchased leased land you have a pretty good case in court to be deemed the actual owner of the land, and if the laws stay as they are you will likely be ordered to sell within 1 year of receiving notice to do so. Always better than giving it back to the seller?

All licensed developments still offer 90 year leases and these contracts are government approved. It’s only with these small developers who are free to offer any structure they like, as there are no rules, you see the usufruct option and poor 30 year lease structures benefiting them, not the buyer. They conveniently refer to post about usufructs on TV where total misinformation is given about usufructs, like the for life + 30 years idea So maybe if someone is very positve about usufructs it could well be a small developer selling a few plots on the name of his wife under usufruct and shows to his potential clients printed TV posts how perfect these structures are. That's the scam.