Buying A Resort/bunbalows On Koh Chang

[Livinginexile]

Hi All,

I'm driving down to Koh Chang this weekend to have a look at a resort up for sale.

I can get it very cheap as the owners are heading back to Europe.

Something worries me tho.

I have been told it is the norm in Koh Chang that land leases are not registered with the land office.

They are telling me everything is done through lawyers and is safe. This sounds not very secure!

Does anyone have experience with buying/selling a bungalow resort?

Edited June 4, 2010 by Livinginexile

[lannarebirth]

Land leases of greater than 3 years that are not registered are not enforcable accordingto my attorney. You may want to check with your own. Lessors typically do not like to register the lease as it has tax implications.

[nakachalet]

livinginexile

do u really like.... to be living in exile....?

i do hope u r much more cautious than what u sound....

remembering what my grandparents told me ages ago....

lad.... would u sell your winning horse cheap....?

go down there and enjoy....

cheers

[Morden]

There's a recent topic on this subject that you really should read.

In addition to the issue of unregistered leases, much of the land seems to have a poor title deed. Even if you are leasing you should ensure that the owner of the land has chanoot. Nothing else will do for a resort. Note the story of the resort owner who lost it to the navy.

Enjoy your trip and note how many tourists are on the island. If you want to check the occupancy rate for your potential purchase during the last three high seasons or more don't rely on the books that you are shown. Also check the Western Consulates websites to see how many are still telling their nationals to stay away from Thailand.

If you want to buy a tourist business there are plenty for sale as destitute owners try to recover some of their loss and run for the hills.

[intothefuture]

The earlier comment is right. Be very careful. Thai law is the same in Bangkok and in Koh Chang...don't believe anything different. Use an attorney. If the lease is more than 3 years it must be registered with the land office. This will also clear up any risk of who is the chanote title holder (or nor sor sam/nor sor sam khor). You need to be certain the real owner is giving you a real lease. Also make sure that the bungalows are legal. Check with the Orbortor office to make sure their are permits for the resort structures. Then also check with the Puyaiban (the village chief) to see if there are any other problems with the resort... or if it is functioning properly, obeying laws and has no disputes with neighbors etc. You need a Thai attorney to help you. Otherwise you are just risking your money with no assurance of what you are getting into.

[chiangmaibruce]

As per a previous poster's comment, have a look for that other thread. Also look at www.iamkohchang.com and make contact with the fellow that runs it (Ian) who is well-informed about local business & real estate matters. I think Ian is also a fairly regular contributor to Thaivisa also.

I think the reason that many leases there are not registered is because the land in question cannot be legally leased to anyone ... it's not permitted by virtue of the form of land title in most parts of the Island.

[Livinginexile]

Hey guys, thank you all for the good advice.

I had a look at the resort, it is not what I expected (suprise suprise)

Still looking though, I am off to Koh Phangan this weekend to look at some beach land for rent.

It's fun looking and a good excuse to get out of Bangkok for a few days.

Thanks again for the posts.

[Changian]

As I try to tell people who email me it is virtually impossible to get a Koh Chang landlord to give a registered lease. Most people believe me, some think they are different and can talk the landlord round and some think it is all somehow part of a cunning scam (i.e. the German guy who, after emailing me, posted here about resorts on Koh Chang to get some info and also posted a fake 'For Sale' ad in the TV classifieds section, to try to get info from other potential buyers about their experiences.)

But for some lucky buyers, Thai govt legislation seems to stop just after you get off the ferry and you can get a 99 year lease on farmland on Koh Chang. (Anyone in Phuket, Samui, Pattaya envious yet?) I know this because I've seen a contract an Aussie guy signed when he 'bought' his land for a house. He was assured this was all totally legit as the land was owned by a lawyer, the contract was witnessed by the local Kamnan and drawn up by another lawyer who is based on Koh Chang. How much more legally binding could it get? (Other than actually complying with Thai law.)

More seriously, I only know of a couple of small western 'owned' resorts that definitely have reg. leases and in both cases their landlords aren't Koh Chang natives. But nowadays in any of the main beach areas you aren't going to get a registered lease. Also on most, but not all of the inland land, which is where the small resorts pop up, the land is still farmland and so leases cant be registered anyway. Landlords with Chanotes also don't like to give registered leases now.

That's just the way it is. You want to rent land, build some bungalows then you can. But realistically, you almost certainly aren't going to get the leased registered unless you are in a very out of the way location. There is some safety in numbers though as it isn't as though there are just a handful of businesses / resorts in the same boat and the vast majority of local landlords seem perfectly happy to hang onto their land and simply collect the tax-free rent from business owners once a year. Bottom line is that to have a resort on Koh Chang, you either have to be willing to do things the 'local way' and the way everyone else in the same situation does it, or just accepting of the reality that a 15 year lease contract on paper doesn't come with any guarantees unless it is covered in stamps from the Land Office.

[Bizz]

As I try to tell people who email me it is virtually impossible to get a Koh Chang landlord to give a registered lease. Most people believe me, some think they are different and can talk the landlord round and some think it is all somehow part of a cunning scam (i.e. the German guy who, after emailing me, posted here about resorts on Koh Chang to get some info and also posted a fake 'For Sale' ad in the TV classifieds section, to try to get info from other potential buyers about their experiences.)

But for some lucky buyers, Thai govt legislation seems to stop just after you get off the ferry and you can get a 99 year lease on farmland on Koh Chang. (Anyone in Phuket, Samui, Pattaya envious yet?) I know this because I've seen a contract an Aussie guy signed when he 'bought' his land for a house. He was assured this was all totally legit as the land was owned by a lawyer, the contract was witnessed by the local Kamnan and drawn up by another lawyer who is based on Koh Chang. How much more legally binding could it get? (Other than actually complying with Thai law.)

More seriously, I only know of a couple of small western 'owned' resorts that definitely have reg. leases and in both cases their landlords aren't Koh Chang natives. But nowadays in any of the main beach areas you aren't going to get a registered lease. Also on most, but not all of the inland land, which is where the small resorts pop up, the land is still farmland and so leases cant be registered anyway. Landlords with Chanotes also don't like to give registered leases now.

That's just the way it is. You want to rent land, build some bungalows then you can. But realistically, you almost certainly aren't going to get the leased registered unless you are in a very out of the way location. There is some safety in numbers though as it isn't as though there are just a handful of businesses / resorts in the same boat and the vast majority of local landlords seem perfectly happy to hang onto their land and simply collect the tax-free rent from business owners once a year. Bottom line is that to have a resort on Koh Chang, you either have to be willing to do things the 'local way' and the way everyone else in the same situation does it, or just accepting of the reality that a 15 year lease contract on paper doesn't come with any guarantees unless it is covered in stamps from the Land Office.

Ian is correct it is mind boggling in koh Chang but it works.

here

[Livinginexile]

As I try to tell people who email me it is virtually impossible to get a Koh Chang landlord to give a registered lease. Most people believe me, some think they are different and can talk the landlord round and some think it is all somehow part of a cunning scam (i.e. the German guy who, after emailing me, posted here about resorts on Koh Chang to get some info and also posted a fake 'For Sale' ad in the TV classifieds section, to try to get info from other potential buyers about their experiences.)

But for some lucky buyers, Thai govt legislation seems to stop just after you get off the ferry and you can get a 99 year lease on farmland on Koh Chang. (Anyone in Phuket, Samui, Pattaya envious yet?) I know this because I've seen a contract an Aussie guy signed when he 'bought' his land for a house. He was assured this was all totally legit as the land was owned by a lawyer, the contract was witnessed by the local Kamnan and drawn up by another lawyer who is based on Koh Chang. How much more legally binding could it get? (Other than actually complying with Thai law.)

More seriously, I only know of a couple of small western 'owned' resorts that definitely have reg. leases and in both cases their landlords aren't Koh Chang natives. But nowadays in any of the main beach areas you aren't going to get a registered lease. Also on most, but not all of the inland land, which is where the small resorts pop up, the land is still farmland and so leases cant be registered anyway. Landlords with Chanotes also don't like to give registered leases now.

That's just the way it is. You want to rent land, build some bungalows then you can. But realistically, you almost certainly aren't going to get the leased registered unless you are in a very out of the way location. There is some safety in numbers though as it isn't as though there are just a handful of businesses / resorts in the same boat and the vast majority of local landlords seem perfectly happy to hang onto their land and simply collect the tax-free rent from business owners once a year. Bottom line is that to have a resort on Koh Chang, you either have to be willing to do things the 'local way' and the way everyone else in the same situation does it, or just accepting of the reality that a 15 year lease contract on paper doesn't come with any guarantees unless it is covered in stamps from the Land Office.

Thank you very much for taking the time to post this information, it has made things a lot clearer how leases opperate in Koh Chang.

[Bizz]

i repeat my comment

there is no one that can like said take your chance with the local and understand that this is Thailand and do this with a local woman.

you have been warned. aha but then again this is the way local do it.