Leasing Land From Thai Wife

[Dah fahrang]

Scenario:

Happily married to Thai for 30 years, Brit, retired in Thailand for 7 years on annual extensions of stay.

Wife owns the 1 rai plot of land upon which we have built a modest home.

We have one daughter, (age 26) dual British/Thai national, but for the purposes of this scenario, Thai.

She is currently living in Vietnam with Vietnamese partner (unmarried) with one child - legally Thai.

Thai wife has drawn up a Thai will, notarised at the local amphur, where, upon her death the plot of land and all on it will pass to our daughter.

Chanote for the land is in Thai wife's married (fahrang) name: no problem changing the name at our local land office.

Discussing together what happens to me if my wife dies before me, we recognise the land will be our daughter's.

We love and trust our daughter, and she (we think) loves us in return. BUT, because nobody can predict future events, we want to be 'belt and braces' sure that my daughter, and / or any future (Thai) partner cannot put me on the street with my suitcase, (Channel 3 Soaps style).

It will be difficult enough coping with the loss of my wife, let alone worries about the rest of my own days.

So, we think that a 30 year lease, drawn up now, whereby I legally lease the land we currently jointly live on from my Thai wife will mean that should my wife die before me, I cannot be put on the street by her heir or future partner.

I have read other threads about fahrangs as heirs inheriting 1 rai of land, but that, for us, is too hit and miss, and I don't want my life's home to be in the hands of misguided - or worse - land officers.

Question:

Does anybody know / have direct experience of drawing up a lease between married partners for a plot of land?

Where can this be done simply? Lands Office? Privately between us and notarised by local amphur / Lands Office?

I hope to avoid lawyers, but as a last resort - the devil must.

[Irene]

At the Land Office. There is a standard form of 30 year lease that a land officer could provide.

[donx]

In your situation, I would not recommend a 30 year lease. Instead you need a usufruct and/or superficery since you can get this for the rest of your life. The other problem with the lease is that annual taxes will need to be paid and from what I am reading about likely changes to the real estate tax laws, taxes on property that is leased will be higher than taxes for primary residence. The one that will have to pay the tax is the land owner.

[cardholder]

If you think that a 30 year lease is the answer then please bite the bullet and seek legal advice.

[electau]

A lease can be cancelled, bought or sold at any time. Whoever holds the title to the land will control it.

Suggest you get some very good legal advice before proceeding.

[backsoon]

A lease can be cancelled, bought or sold at any time. Whoever holds the title to the land will control it.

Suggest you get some very good legal advice before proceeding.

All put together sounds very depressing.

Thailand needs a sweeping change in the way it treats foreign expats.

Down with NO LAND ownership. Down with 1 year maximum Visas. Down with 90 days reporting. It will never come....

[personchester]

A lease can be cancelled, bought or sold at any time. Whoever holds the title to the land will control it.

Suggest you get some very good legal advice before proceeding.

[personchester]

A lease can be cancelled, bought or sold at any time. Whoever holds the title to the land will control it.

Suggest you get some very good legal advice before proceeding.

All put together sounds very depressing.

Thailand needs a sweeping change in the way it treats foreign expats.

Down with NO LAND ownership. Down with 1 year maximum Visas. Down with 90 days reporting. It will never come....

Yes, it is all very negative.

[MikeyIdea]

A lease can be cancelled, bought or sold at any time. Whoever holds the title to the land will control it.

Suggest you get some very good legal advice before proceeding.

That is not correct. A properly registered lease is entered at the back of the chanote and it can be cancelled, bought or sold at any time, IF the person leasing accepts it. The land owner can do nothing to cancel the lease if the person leasing does not accept, the owner of the land can sell the land at any time but the new owner is still bound by the lease agreement and it stays on the chanote, as explained by my lawyer when I checked this before I bought a lease myself a long time ago. Lease between husband and wife could possibly be a problem though, not sure

Lifetime usufruct is probably better for the OP since you are legally married

Edited September 8, 2010 by MikeyIdea

[stgrhe]

A lease can be cancelled, bought or sold at any time. Whoever holds the title to the land will control it.

Suggest you get some very good legal advice before proceeding.

No, a registered lease can not be canceled by the land owner unless the owner is married to the lease holder. Since the OP is asking for advice in the event his wife passes before him the lease, or actually better as Onyx suggested, the usufruct shall be seen as a continued right to habitat the dwelling if the unfortunate should occur.

In such a scenario an usufruct is a much stronger right than a lease as it is enforceable whereas a lease is only as good as the terms and conditions of the lease registered at the land office.

To the OP I say go for a usufruct for life. It is easy to register and costs about 75 baht.

Edited September 8, 2010 by stgrhe

[electau]

This website may be of interest.

http://www.bia.co.th/011.html

In this the principals of Thai land law are discussed,and the rules regarding foreign ownership of land, buildings and condominiums in Thailand

[donx]

This website may be of interest.

http://www.bia.co.th/011.html

In this the principals of Thai land law are discussed,and the rules regarding foreign ownership of land, buildings and condominiums in Thailand

Some of the information on that website is correct, but I don't think all of it is correct. For instance:

"Leases may be registered for up to 30 years (or the life of either party) ..."

I have never heard of any lease that has been registered for the life of either party. So far as I know only a usufruct or superficies can be registered for the life of the either party. Someone please correct me if I am wrong.

To stgrhe: although you may enjoy being referred to as a 'jewel' - note your avatar - I prefer being referred to by my nickname (mai pen rai)

[electau]

It could be interpreted as if one or both parties to the lease agreement die before the lease term expires.

[MikeyIdea]

Leases are always time dependant, rules are simple; Anything above 3 years must be registered at the back of the chanote or it is not valid, no more than 30 years can be registered. I have no idea what happens if the person leasing dies

[InterestedObserver]

Leases are always time dependant, rules are simple; Anything above 3 years must be registered at the back of the chanote or it is not valid, no more than 30 years can be registered. I have no idea what happens if the person leasing dies

Simple, if the lessee dies the lease is automatically terminated if a right of succession clause is not in place..

Edited September 9, 2010 by InterestedObserver

[Dah fahrang]

Thanks all for informative replies.

My wife is off for informal chat at the local Land Office on Monday morning. She knows a couple of the officers there.

She will be asking about both a lease (any terms therein, its' legality between spouses and how to set one up)and will investigate/compare with usufruct.

We hope to sort this out sooner rather than later, so I can sleep in my bed at night

When she comes back with the info, if its positive, we will go together to draw up the relevant document.

I'll post updates and facts as they arise in this thread.

[electau]

Remember, a lease is a legal contract and a contract can be terminated for many reasons one can be on the death of either party, failure to pay a lease payment before the due date, bankrupcy by the title owner etc.

Your lease may well be recorded on the title deed but what are the terms and conditions of the lease?

And a person who inherits that title is not bound to honor that lease agreement.

Usufruct is a lease but that generally applies to the use of land such as for the growing of crops and agricultural use. It was never intended to be used for residential land.

　

Edited September 9, 2010 by electau

[donx]

Remember, a lease is a legal contract and a contract can be terminated for many reasons one can be on the death of either party, failure to pay a lease payment before the due date, bankrupcy by the title owner etc.

Your lease may well be recorded on the title deed but what are the terms and conditions of the lease?

And a person who inherits that title is not bound to honor that lease agreement.

Usufruct is a lease but that generally applies to the use of land such as for the growing of crops and agricultural use. It was never intended to be used for residential land.

　

I'm sorry but I disagree with most of what you write. It doesn't match with most of what I have researched. Leases can be written so that the death of either party doesn't terminate the lease. A person who inherits a title IS bound to honor a lease agreement registered on the title. A lease can be inherited and left in full affect provided it has been written to allow this. Additionally, a usufruct is not a lease. A lease requires payments whereas a usufruct doesn't require any payment to the owner of the land title. I don't know where you are getting your information but I don't believe you have the correct information.

I'll let others here either agree or disagree with what I'm saying.

[MikeyIdea]

Remember, a lease is a legal contract and a contract can be terminated for many reasons one can be on the death of either party, failure to pay a lease payment before the due date, bankrupcy by the title owner etc.

Your lease may well be recorded on the title deed but what are the terms and conditions of the lease?

And a person who inherits that title is not bound to honor that lease agreement.

Usufruct is a lease but that generally applies to the use of land such as for the growing of crops and agricultural use. It was never intended to be used for residential land.

I will disagree with one thing that I also checked with a lawyer before I bought a lease a long time ago

I confirm: Bankrupcy regardless of if it is a company or a private person does not terminate a lease agreement.

[stgrhe]

Remember, a lease is a legal contract and a contract can be terminated for many reasons one can be on the death of either party, failure to pay a lease payment before the due date, bankrupcy by the title owner etc.

Your lease may well be recorded on the title deed but what are the terms and conditions of the lease?

And a person who inherits that title is not bound to honor that lease agreement.

Usufruct is a lease but that generally applies to the use of land such as for the growing of crops and agricultural use. It was never intended to be used for residential land.

I will disagree with one thing that I also checked with a lawyer before I bought a lease a long time ago

I confirm: Bankrupcy regardless of if it is a company or a private person does not terminate a lease agreement.

Nor will a lease be canceled on a duly registered 30 years lease if the land owner (or the "hirer" as it is referred to in the English translation of the law) unless this condition has been specifically stated on the title document. Reference: Section 541 of the Civil and Commercial Code.

It is important to understand that a lease (or correctly "Hire of Immovable Property") is only as good as the conditions written in Thai on the title document itself. As previously stated, a registered lease can be for maximum 30 years and then it will expire. The lease will also expire with a premature death of the lease holder unless a succession clause has been defined. The heir in such a case should then most likely be a heir from the blood line and not a willed heir (legatee).

[electau]

A lease is a contract and contracts can and are made and broken every day.

It is not what is in a contract it is what is not in a contract.

If there is a dispute in a contract it usually goes to court to be decided if it cannot be resolved amicably between the parties concerned. One may be able to sue the other for damages and compensation if a contact is broken.

That is why there are terms and conditions in a contract along with any exceptions that my apply.

Remember you are in Thailand not in your home country, all legal documents are in the Thai language/script and they are the only ones that can be submitted to a court.

So you should be very careful that a lease will still be honoured if the other party to the contract dies. What will happen if the lease is disputed in a court?

30 years is a long time, times change,people change. And you are a foreigner, not a Thai citizen.

You should do a risk assessment first with every possible eventuality that could occur, because you are the only one that is going to lose.

And people can change their Will at any time also, the benificiary may have other ideas on what he/she wants to do with his or her new found asset.

Caveat Emptor.

[donx]

I agree that the terms and conditions of a lease are very important. A well written lease can provide protection for the leasee and can ensure that the lease continues in the event that the land owner passes away prior to the expiration of the lease. Yes, the new owner of the land can attempt to break the lease and this can cause a court battle that can take years to resolve. Even though you are likely to eventually win in court, it could be exhausting and/or expensive.

Something that I mentioned that others have not commented on is that from my understanding, yearly taxes are required to be paid by the land owner when a lease is registered on the land and those taxes are significantly higher than taxes that would need to be paid when there isn't a lease registered. I also don't think that these higher taxes are required for land with a usufruct registered on it. Anyone else want to comment on this subject?

[stgrhe]

It is not what is in a contract it is what is not in a contract.

That depends entirely on the wording of the agreement. Thailand uses code laws and the code law, contradictory to the English common law, allows a court to consider other aspects too such as e.g. correspondences between the parties when they make a ruling in a dispute. However, in a well worded agreement this can be blocked and in my opinion it is recommended to add such a blocking clause. Hence, if a blocking clause is included the agreement would in practice be treated the same way as if the agreement would have been based on common law, i.e. the wording of the agreement is everything and nothing else matter.

With deeds, contracts and agreements one should also understand that the terms and condition cannot be against the applicable law, else such a clause would be deemed to be invalid.

[electau]

"It is not what is in a contract it is what is not in a contract" was meant in a general way and usually refers to performance of work such as in a building contract, what is supplied and what is not supplied or supplied by others.

Just a note, and as you are all aware fraud does occur in Thailand as in other countries.

This incident occured in Australia and was reported on the ABC-TV news on 11/9/2010.

http://www.perthnow....u-1225918470678

Edited September 12, 2010 by electau

[electau]

Look at it this way, put yourself in the position of owner, does giving a 30 year lease make sense? You would make sure that you maintained control of the land at all times, and especially if someone was to inherit that land, they might have other uses for it.

There are two parties to a lease, and the owner has the upper hand and he or she can set the terms for the lease, you can ask for inclusions and exclusions as required, and both parties have to agree to the terms before signing.

Has that inheritance clause ever been tested in a Court? Because one day it will be.

　

[stgrhe]

Look at it this way, put yourself in the position of owner, does giving a 30 year lease make sense? You would make sure that you maintained control of the land at all times, and especially if someone was to inherit that land, they might have other uses for it.

There are two parties to a lease, and the owner has the upper hand and he or she can set the terms for the lease, you can ask for inclusions and exclusions as required, and both parties have to agree to the terms before signing.

Has that inheritance clause ever been tested in a Court? Because one day it will be.

Whether a court as made a ruling or not I do not know, nor do I think it matters if the agreement has been correctly worded and an inheritance clause written onto the title document. There are two paragraphs in the Civil and Commercial Code that are applicable here:

Section 544 - Unless otherwise provided by the contract of hire, a hirer cannot sublet or transfer his rights in the whole or part of the property hired to a third person.

Section 564 - A contract of hire is extinguished at the end of the agreed period of notice.

So, if a transfer clause has been duly registered and worded correctly a heir could take over the lease (hire) until the contract expires (normally after 30 years). However, one should note that clause 564 is worded quite oddly as it talks about extinguishing of the "contract" and not the "the right to hire". I therefore think it is important the lease contract itself doesn't have an expire clause.

The problem the leaseholders could face is because they have much too poorly worded lease agreements. I have seen a few lease agreements since moving to Thailand and all of those are indeed questionable.

[electau]

It would depend on the interpretation of the clause as applied in a lease agreement. Interpretation, if there was a dispute or challenge, would be made by a Court.

Section 564 - A contract of hire is extinguished at the end of the agreed period of notice.

This could be interpreted as for example at the end of 30 years the hirer (lessee) would have to renegotiate a new lease with the lessor (owner).

Section 544 - Unless otherwise provided by the contract of hire, a hirer cannot sublet or transfer his rights in the whole or part of the property hired to a third person.

This could be interpreted as the hirer (lessee) can only transfer his rights to a third party if it is stipulated in the contract (lease).

The lessor (owner) is not mentioned in Section 544.

[stgrhe]

It would depend on the interpretation of the clause as applied in a lease agreement. Interpretation, if there was a dispute or challenge, would be made by a Court.

Section 564 - A contract of hire is extinguished at the end of the agreed period of notice.

This could be interpreted as for example at the end of 30 years the hirer (lessee) would have to renegotiate a new lease with the lessor (owner).

That is also what I am saying although the agreed lease period could be shorter than 30 years but not longer.

Section 544 - Unless otherwise provided by the contract of hire, a hirer cannot sublet or transfer his rights in the whole or part of the property hired to a third person.

This could be interpreted as the hirer (lessee) can only transfer his rights to a third party if it is stipulated in the contract (lease).

That is also what I am saying and the transfer, if written on the lease document, must take place within the applicable lease period.

The lessor (owner) is not mentioned in Section 544.

That is irrelevant.

[electau]

The legal rights of the lessor ( the owner) are very important as without his /her agreement no lease will be signed and lessor could well say " take it or leave it" and there is nothing you could do about it. The owner has the legal advantage at all times.

Whatt if you were to lease the land from a company? they may want you to pay rent on the lease or an upfront payment with a short term lease eg 5/10 years with an "option to renew" if both parties agree. If the owner does not agree there is not much you can do about it.

You can be sure that an owner will protect his /her own interests.

Edited September 13, 2010 by electau

[MikeyIdea]

The legal rights of the lessor ( the owner) are very important as without his /her agreement no lease will be signed and lessor could well say " take it or leave it" and there is nothing you could do about it. The owner has the legal advantage at all times.

Whatt if you were to lease the land from a company? they may want you to pay rent on the lease or an upfront payment with a short term lease eg 5/10 years with an "option to renew" if both parties agree. If the owner does not agree there is not much you can do about it.

You can be sure that an owner will protect his /her own interests.

"The owner has the legal advantage at all times."

That goes directly against what my lawyer advised me regarding leases - the owner of the land is legally bound by the lease contract at all times was what he said, not that the owner has legal advantage at all times. This is for a lease registered at the land office and included at the back of the chanote of course. Everything is up to what is written in the lease contract