Lease Hold Question

[smooth1978]

Hello there,

I am about to buy a property as freehold within a resort. I am asking myself a couple of questions though:

What if the company goes bankrupt:

1. If a new company takes it over, do they have to honour my leasehold agreement between myself and the current company?

2. What if the government becomes the owner. I even dont know if this would be possible in Thailand. But many cases worldwide are known( Japan air...).

3. What if the main creditor is the bank.

Are all these cases similar?

many thanks for your advice

[stgrhe]

I think you need to explain whether you intend to buy the property (freehold = you are the owner with the titel in your name) or rent the property (leasehold) over an extended period of time.

[123ace]

You need to do a lot more study before your proceed any further. based on the questions raised I would see you as a potentially a prime target for being led in to a very poor transaction.

Feel free to PM me if you need advice, or as suggested above specify the transaction with greater clarity. In the meantime do not pay any money, including depsoit.

[InterestedObserver]

STOP, do not proceed with the transaction. The fact that you are asking these questions indicates that you are not ready "to buy a property as freehold". Foreigners cannot own property (land) in Thailand.

Edited March 31, 2010 by InterestedObserver

[smooth1978]

Sorry my mistake, I meant it is leasehold with 30+30+30 years terms. I have done review on the last 5 years of the company finances, which look okay. Company has existed for over 25 years. On that base i should be fine, but in this current climate things can go fast.

As well according to the contract a new resort owner, has to honour the existing (leasehold) owners in the hotel. But how would that work legally?

@interested observer, i own already property and have been living here for some time : ) it is just the first time i would consider an option like this with a resort type of place. So dont worry about me being 'ready or not', there is nothing wrong with being carefull. And as well, I dont know enough about Thai law that is why I would like some advice.

[InterestedObserver]

1. 30+30+30 lease terms are unenforceable, especially upon a new owner.

2. Chapter IV, Section 569 of the Civil and Commercial Code covers the transfer of ownership of hired property.

2. Foreigners cannot own property (land) in Thailand. If you care to, please explain how you "own already property".

Edited April 2, 2010 by InterestedObserver

[smooth1978]

1. 30+30+30 lease terms are unenforceable, especially upon a new owner.

2. Chapter IV, Section 569 of the Civil and Commercial Code covers the transfer of ownership of hired property.

2. Foreigners cannot own property (land) in Thailand. If you care to, please explain how you "own already property".

As much as any of us can own property through freehold....

[smooth1978]

1. 30+30+30 lease terms are unenforceable, especially upon a new owner.

2. Chapter IV, Section 569 of the Civil and Commercial Code covers the transfer of ownership of hired property.

2. Foreigners cannot own property (land) in Thailand. If you care to, please explain how you "own already property".

Thanks for the reply.

[InterestedObserver]

1. 30+30+30 lease terms are unenforceable, especially upon a new owner.

2. Chapter IV, Section 569 of the Civil and Commercial Code covers the transfer of ownership of hired property.

2. Foreigners cannot own property (land) in Thailand. If you care to, please explain how you "own already property".

As much as any of us can own property through freehold....

You must be talking about a condominium because foreigners cannot freehold property (land) in Thailand.

[stgrhe]

1. 30+30+30 lease terms are unenforceable, especially upon a new owner.

Only 30 years can be registered with right and obligations transferred to heirs and new owners. A second 30 year period may be renewed according to the law but this is something that needs to be seen when that day comes so do not count on it.

[monty]

If the property has it's own land title deed, and the lease is registered on this land title deed (with according taxes paid), then you are secure for the first 30 years.

Whatever happens with the property owners, they will have to honor the 30 years.

The subsequent years 60 years are an agreement between 2 parties and not supported by any laws, and if one party disappears, so does the agreement. Company goes bankrupt, owners die or they simply sell, then you are left with the part which is registered on the back of the land title deed, and this is by law limited to 30 years.

Then of course you have the possibility that the company goes bankrupt, and that the new owners will run (or cease running at all) the resort in a complete different way, making you the de-facto owner of a place you might possibly not be interested in anymore!

[123ace]

Often we see mid term expats that think they know the sytem, confidently stride in to a lousy deal. Then claim foul after the fact. I will watch this one unfold with amusement.

My last comment on this is to the OP is perhaps study the resort owner or operator's balance sheet, debts and liabilites with keen interest and to appraoch it looking for problems...... but I know he won't.

[stgrhe]

 

My last comment on this is to the OP is perhaps study the resort owner or operator's balance sheet, debts and liabilites with keen interest and to appraoch it looking for problems.

That is one of the corner stones in a proper due diligence, something I mean every buyer should do before they do any commitments at all. There at much too many under-financed developers here in Thailand.

[clinique]

not that we can add much ,, but are you buying directly from the owner?

or a marketing agent or the resort Operator/Manager.

IF its timeshare and unless it is with someone like marriott or four seasons - DONT.

IF it is leasehold from the owner then do as other Posters have said and do some due dilignece about their longevity..and financial status..

ONLY the first 30 years is enforceable on the land owner (make sure it is the same owner as the developer of the development/resort..

Make sure the leasehold is direct with the owner, NOT a sublease of an existing lease..

IF the resort is selling with a rental guarantee from a Manager/Operator make sure they have thecapacity to pay the guarantee each year as well >.

good luck..

[johnnyk]

not that we can add much ,, but are you buying directly from the owner?

or a marketing agent or the resort Operator/Manager.

IF its timeshare and unless it is with someone like marriott or four seasons - DONT.

IF it is leasehold from the owner then do as other Posters have said and do some due dilignece about their longevity..and financial status..

ONLY the first 30 years is enforceable on the land owner (make sure it is the same owner as the developer of the development/resort..

Make sure the leasehold is direct with the owner, NOT a sublease of an existing lease..

IF the resort is selling with a rental guarantee from a Manager/Operator make sure they have thecapacity to pay the guarantee each year as well >.

good luck..

IMO, the "rental guarantee" is often a total scam in 2 ways:

1) creative accounting leaves you with next to zero, e.g. maintanance costs. Somchai has his bro-in-law's company do the garbage collection @200 baht/bag plus other dodges.

2) boost the sellng price by 8% then "discount" the price by 8% and here you are Mr. Punter, 8% return right away!