Attempted Fraud

[Abrak]

So I get a letter from a guy am doing a property deal with. I have already got his deposit, we signed a contract which he failed to read/understand and he knows nothing about Thai Law. I have tried to make allowances for the fact that he is incredibly stupid but he still persists.

So his letter includes this 'I believe I am the victim of attempted fraud.'

The fraud he is refering is that the Thai Land Office lease contract fails to mention the second +30 year lease like every other Thai Land Office while the English Language contract does. This by the way is four months after he signed a contract where he accepted the terms of both leases (anyway you cant add addendums on Thai Leases.)

Now the contract contains a number of breaches of contract clause (which gives the other party 15 days to rectify)(although not one for minimum intelligence) but he clearly isnt sentient enough to actually own a house.

Anyway as he thinks I am a crook and I think he is a moron there doesnt seem to be much point in doing business. I would have thought that accusing someone of fraud is criminal and I can simply tear the contract and keep the deposit. On the other hand it does have a useful 'I believe' in front of it which recludes it from being a statement of fact

[Somtamnication]

ok

[Puccini]

Yes.

[jackdawson]

note to self; continue NOT to do "property deals" in thailand

[Musongman]

Yes, JackDawson, if only I had stuck to that very note!! I am saddened by my own stupidity!!

[Carib]

Oh dear........

[123ace]

Where is the harm in refunding the deposit then, or does your business model necessitate what you call 'stupid' customers? Please take it back and sell it to someone else.

Without more information on this matter you can't expect anyone to have any particular symapathy (with either side) as we do not know how well you articulated the renewability of the lease, an issue which is highly sensetive, lacking in precedent and of concern to many.

[jazzbo]

or does your business model necessitate what you call 'stupid' customers? Calling persons with whom one disagrees 'stupid' may just be modus operandi ...

[jackdawson]

^

i tried to tell u...

[LivinLOS]

It would depend on how the property was represented.. If it was sold with the concept of lifetime leasing through 30+30+30 etc as a substitute to freehold, then in many ways if he is only just discovering that its 30 only (in legal terms) there is grounds for him to feel its miss represented.

Of course if you are offering him freehold, but he cannot make other arrangements, then the onus falls on him a little more.

[Abrak]

It would depend on how the property was represented.. If it was sold with the concept of lifetime leasing through 30+30+30 etc as a substitute to freehold, then in many ways if he is only just discovering that its 30 only (in legal terms) there is grounds for him to feel its miss represented.

Of course if you are offering him freehold, but he cannot make other arrangements, then the onus falls on him a little more.

Blimey what a bunch of bleeding hearts. He has had a copy of both leases Thai and English for 5 months. Presumably he or his lawyer read them. At this point they had not deposited a penny on the property. 4 months ago they signed a contract saying they accepted the terms of both leases. The Thai contract doesnt have the second +30 option registered because it is not possible to do so at a Thai Land Office (it might even be fraud). Even an ingrate lawyer knows this.

So 5 months after he gets the leases, 4 months after he has placed a deposit and accepted the terms of the leases, he comes and calls me a fraud for not including a clause in the Thai contract that cannot be registered. And I am supposed to give him back his deposit after making a criminal accusation against me simply because he is dense and his lawyer apparently totally incompetent. You get the leases prior to signing a deposit in order that you read them, if you dont like the terms fine, it is unlikely however to include conditions that cannot be registered at the Land Office. If there is any misrepresentation involved he should sue his lawyer.

[katabeachbum]

It would depend on how the property was represented.. If it was sold with the concept of lifetime leasing through 30+30+30 etc as a substitute to freehold, then in many ways if he is only just discovering that its 30 only (in legal terms) there is grounds for him to feel its miss represented.

Of course if you are offering him freehold, but he cannot make other arrangements, then the onus falls on him a little more.

if its sold 30+30 and registered in land office as 30 only thats according to thai law.

buyer still has a private agreement with seller of another 30years, which every property buyer in LOS should know is hard, but sometimes possible, to achieve.

seller has delivered

[angiud]

[Abrak]

if its sold 30+30 and registered in land office as 30 only thats according to thai law.

Well most Land Offices will also allow you to register a +30 option on your Thai Lease nowadays. Unfortunately registration of the option does not guarantee that you can exercise it. (It is not like the first 30 year lease which is fairly inviolable.) I think the first +30 should really be registered but you need to do this when you first register the lease and it cannot be added later. An option to renew without a price is not an option. How valuable +30 +30 options are is obviously debatable - it does seem to me though that as the Crown Property Bureau gives 30 +30 leases that should help set some sort of precedent. Anyone who sells 30 +30 +30 as a 90 year lease should be boiled in a vat of burning oil.

[LivinLOS]

The options can be placed in the lease as part of the contract, they then fall under contract law.. Nothing illegal about it, just possibly hard to enforce.

The first 30 is hard and fast, always registrable at a land office, the +30+30 are then under contract law, and can and should (if agreed) be put into the lease for record of the contract. The lease document being separate from the registration of the leasehold on the land title.

So in that case not sure whose lawyer is being dense.. I would want to +30+30 (well I wouldnt do that system) on paper not a vague promise. So again it depends on how it was represented, if you promised +30+30 lease extensions as part of the deal it should be in the document, otherwise it smells of bait and switch. Of course he should have seen it wasnt in the document, he was too trusting.

[katabeachbum]

The options can be placed in the lease as part of the contract, they then fall under contract law.. Nothing illegal about it, just possibly hard to enforce.

The first 30 is hard and fast, always registrable at a land office, the +30+30 are then under contract law, and can and should (if agreed) be put into the lease for record of the contract. The lease document being separate from the registration of the leasehold on the land title.

So in that case not sure whose lawyer is being dense.. I would want to +30+30 (well I wouldnt do that system) on paper not a vague promise. So again it depends on how it was represented, if you promised +30+30 lease extensions as part of the deal it should be in the document, otherwise it smells of bait and switch. Of course he should have seen it wasnt in the document, he was too trusting.

let the buyer write the lease agreement. if its not accepted at land office, let him write an acceptable one

[Abrak]

So in that case not sure whose lawyer is being dense.. I would want to +30+30 (well I wouldnt do that system) on paper not a vague promise. So again it depends on how it was represented, if you promised +30+30 lease extensions as part of the deal it should be in the document, otherwise it smells of bait and switch. Of course he should have seen it wasnt in the document, he was too trusting.

An undocumented +30 +30 lease extension based on a 'vague promise' is fraud in my opinion. In fact +30 +30 lease extensions documented options without a fixed price or prepaid are totally worthless and essentially fraud. Documented +30 +30 options prepaid and/or at a fixed price are unfortunately not much more than a vague promise although there is much that one can do to try to firm them up.

[LivinLOS]

So are you refusing to let him add +30+30 to the lease agreements ?? And if so when it was verbally discussed was the lease presented as a viable freehold alternative (like most sellers seem to simplify it to) ??

[stuandchris]

You sound like a real charmer Abrak.

I hope your business is as successful as you obviously deserve.

[Abrak]

So are you refusing to let him add +30+30 to the lease agreements ?? And if so when it was verbally discussed was the lease presented as a viable freehold alternative (like most sellers seem to simplify it to) ??

No the lease document has +30 +30 options. My point is that an option of +30 +30 without a fixed price (or in this case prepaid) is totally meaningless. If you have an option to extend and the freeholder asks for Bt50m it is a totally meaningless option - so I wouldnt offer +30 +30 unless the price was predeterminedPrepaying does not cost you more it simply speads it over the life of the contract. Instead of paying Bt8m for the first 30 years and Bt2m for each of the next 2x30 years, you pay Bt4m/Bt4m/Bt4m.

It also contains clauses to extend the lease (say registered 50 year leases were permitted.) The problem you face is that you cannot register the second +30 lease opinion on a Thai Lease at the Land Office doesnt give a lot of protection. You are best placed to claim civil damages against the freeholder if he doesnt extend the lease. A freehold alternative would have been difficult with this land and as you probably know is also subject to some problems. It is extremely inefficient to mix different structures. So for potential buyers it was 30 +30 +30 or nothing. (And of course I didnt pretend it was a freehold or that it was a 90 year lease.) Many buyers do not like that route. Personally I like to have the freehold owned by the residents and then a lease structure (at least they then only have to vote to approve their +30 +30 option to themselves.)

[Carib]

I am lost...who is " scamming " who???

[Abrak]

I am lost...who is " scamming " who???

Well it does seem that everyone has got confused. But one thing I firmly believe is that you will never have success unless you act in the best interests of your clients. Scammers never really make money (except for that Madoff guy). (Incidentally it is not, in my opinion, in the best interests of clients to give a refund to someone 4months after they signed a contract because he hadnt read it and didnt bother to check the law (or with a lawyer). Why should good diligent clients pay for incompetent ones. It would be totally irresponsible.)

[thaiwanderer]

I am lost...who is " scamming " who???

Well it does seem that everyone has got confused. But one thing I firmly believe is that you will never have success unless you act in the best interests of your clients. Scammers never really make money (except for that Madoff guy). (Incidentally it is not, in my opinion, in the best interests of clients to give a refund to someone 4months after they signed a contract because he hadnt read it and didnt bother to check the law (or with a lawyer). Why should good diligent clients pay for incompetent ones. It would be totally irresponsible.)

I'm unsure exactly how your keeping the entire deposit stops the price increasing for the next lessee and is not mere profiteering?

Whilst a prospective lessee should of course carry out their own due dilligence of whatever scale they deem appropriate and then accept the associated risks, with something so fundamental as this were you entirely open and honest (in discussions / sales bluff) that the renewal is not mentioned at all in the registered lease?

Also whilst the renewal itself cannot be registered it does not mean it cannot be mentioned at all in the Thai lease that is registered (and therefore provide evidential support for later enforcing the contractual promise).

Edited March 6, 2010 by thaiwanderer

[LivinLOS]

Also whilst the renewal itself cannot be registered it does not mean it cannot be mentioned at all in the Thai lease that is registered (and therefore provide evidential support for later enforcing the contractual promise).

Exactly.. The OP sounded like he was entirely resistant to the lease stipulating these (however enforceable or not they may be) but later posts are not clear.

Either way, as said above.. Offer the client the option of providing his own lease.. Whats the issue, the client can do it to his satisfaction and all proceed no ?? That is unless the seller is trying to retain the land after 30 years.

[Abrak]

Either way, as said above.. Offer the client the option of providing his own lease.. Whats the issue, the client can do it to his satisfaction and all proceed no ?? That is unless the seller is trying to retain the land after 30 years.

To be very honest LivinLos, I would be pretty useless if I couldnt produce a lease document in the better interests of the client, than the client himself. I know he cant go and negotiate a freehold option with the freeholder. And look I produce a lease but if his lawyer wants to change matters if he feels he is being unfairly disadvantaged in any way I am fine. I know this particular landlord wouldnt like to negotiate a lease with an individual buyer. I only wish to sign any lease that both parties are entirely happy with (if you both agree a lease try building a house.) I cannot see how it could possibly be in my best interests to offer 30 +30 +30 leases from a freeholder who I even vaguely believed would not honor that commitment.

Edited March 6, 2010 by Abrak

[Abrak]

Exactly.. The OP sounded like he was entirely resistant to the lease stipulating these (however enforceable or not they may be) but later posts are not clear.

I am not resistant at all, I am merely realistic. I cannot guarantee that an option to renew will be honored (noone can). The first 30 years are registered. The land is ring fenced in a company so even on the freeholders death the company will still own the land. The land cannot (practically be sold both because of liens and potential damages). If the company which only owns this land does not renew this lease it must pay damages far in excess of the value of the land buildings and all renovations (although those would be its only assets). At least there is a ring fenced company to sue with all the assets of the owners. And really it is not in anyone's interest not to honor the +30 +30.

[stevenl]

So why not include 30 plus 30 in both english and thai text? Only in english does give the impression you're trying to hide something from a non-thai speaker.

[Abrak]

So why not include 30 plus 30 in both english and thai text? Only in english does give the impression you're trying to hide something from a non-thai speaker.

Well for the fourth time the Land Office has a maximum lease of 30 years. Most Land officies will now allow you note a one +30 renewal but not two. I think it is important to do this because as someone mentioned it provides validation of sorts. Registering an english language contract at the Land Office would be a very remarkable achievement. The actual registration of a +30 option gives fairly little legal protection that it has to be implemented or will be allowed (I believe). I think +30 +30 contracts are better (not particularly brilliantly) protected under the civil code. Personally I think 30 +30 +30 is a much better option than just a 30 year lease in terms of resale value and risk reward on the purchase price. Mind you lease structures in general arent that popular now freehold structures are so much more common.

Finally I would recommend that everyone reads both the english and Thai leases. Assuming they are the same is not a good assumption and given that it is the Thai lease that counts in law a dangerous one. Also once registered it is virtually impossible to amend without cancellation renewal and tax.

[thaiwanderer]

I think at least part of the reason the posts in this thread haven't been entirely sympathetic to your 'plight' may be that you've failed to explain matters fully and or consistently. Although I suspect even if we could see both contracts sympathy wouldn't necessarily be forthcoming.

You talk of the freeholder dying separately from the company within which the land is ringfenced which is a bit nonsensical - i suspect from other things you say that the land is owned by a company but if you make such a slip on that simple point i can only imagine what slips may have been made in explaining the vagaries of the status and enforceability of renewals to the prospective lessee.

Subject to slight amendments to fall in with the occasional change of wind direction at the land office the full english language lease (with a delightful array of clauses that aren't themselves registered) can be registered in Phuket by an experienced and competent lawyer. Hardly a 'remarkable achievement' except perhaps as described by you and or your 'legal advisors'?

This doesn't then make options to renew etc 'registered' per se but will then assist as regards the evidential burden later in trying to enforce them (itself often a major hurdle).

Whether the contractual promise is then enforced is of course a greater or lesser crap shoot.

However 'land office no like' is often a lazy shorthand for others to keep their options open.

As an aisde it seems you have received the deposit but are not the lessor, how exactly is the money protected for both lessor and prospective lessee?

[LivinLOS]

So he paid you a deposit, but your not the freeholder ??? And your not offering a freehold either.. But are offering a quasi 30+30+30 but thats is, or isnt on the lease ?!?!?

I would be after my deposit back too (well I wouldnt have paid one).. If you offered this land 'for sale' to a new arrival unfamiliar with Thai quirks, and this is the workaround with ring fenced companies etc etc.. Lots of room for confusion.

Yes he should have read and understood everything before paying the deposit, simply as its obvious how hard it is to now get it back.

Which company is it you represent again ??