Regsitered Sequential Leases (Not Renewal)

[thaiwanderer]

We are all aware of different land offices at different times having different approaches to registering various things.

That someone else easily and successfully registered something doesn't mean someone else will have the same ease or any success doing the same thing.

I would like to ask Sunbelt, other regular posters in this section and anyone else their view on a past thread in the Phuket section which raised an issue that i think goes beyond this.

My position is that just because something is (mistakenly) registered doesn't mean its a correct and valid registration that can be relied upon or that the registration provides any real protection to a future challenge.

The thread is http://www.thaivisa.com/forum/topic/429094-cost-of-housing-in-phuket/page__st__225

Beginning at page 10 and involving posts #234, 239, 261, 262, 287, 294, 295, 296, 297, 298, 300, 315 & 319

- it involves a disagreement between myself and Katabeachbum as to the validity of registering two 30 year leases.

This is not about a contractual renewal. Rather it appears Katabeachbum is saying he has a chanote with two separate and sequential 30 year leases registered on it (apparently one lease to him and the 2nd to someone else)(or at the very least the 2nd residential lease begins in the future and ends 30 years later from that).

My view is that if this is correct the land office have made a mistake (for whatever reason) and that although 'registered' it is invalid, illegal and offers no protection whatsoever.

Any thoughts?

[KarenBravo]

You're correct. Only a single 30 year lease is valid and recognized legally.

[Benjie]

The land officer can probably write whatever he likes in this circumstance because...

he's unlikely to be around in 30 years.

whatever he writes doesn't change the law.

Perhaps the individual land officer was offered some money to do this and thought what the hell.

[gamini]

You are entirely correct. My friend was told a few days ago by his lawyers that he could only have a 30 year lease with no renewals. This maybe a new law.

You're correct. Only a single 30 year lease is valid and recognized legally.

[InterestedObserver]

Two separate and distinct 30 year leases can be registered on the chanote, there seems to be nothing in the Civil and Commercial Code to prevent this. Several persons can claim the same immovable property under different lease contracts IAW the Civil and Commercial Code. It's up to the local land office to execute the registering of the second lease. Whether or not the letter and hirer are alive for the second lease is another matter all together. If the letter or hirer changes his mind before the second lease is accepted and/or performed in the future, it would be an interesting court case. After all, how can you fix a reasonable lease payment 30 years in the future.

[Khun Jean]

The problem is with paying the second 30 year. If an amount is set at the time of registration it is an obvious way of circumventing the law, especially if that amount is also paid. Remember it is not in the specific writing that is in the law but the spirit of the law. In real circumstances it would never happen as no landowner in his right mind would set a price now for a contract that has to be fulfilled 30 years later.

Maybe the baht devalues and the prices would have to be 100 times higher.

It still amazes me to what lengths people go to secure a piece of land. It will never be freehold anyway. You not own it because you can not sell it.

If 30 years is too short take a lifelong usufruct, and include your younger brother/sister/son/daughter whoever and have it secured not only for your own life but for the hopefully longer live of the next generation.

[thaiwanderer]

As I say this appears to be 2 seperate leases to 2 separate lessees - not a renewal.

The 2nd lease is apparently not just a contractual promise but rather has alredy been registered and appears on the back of the chanote.

It appears the price for the 2nd lease has already been paid (tax receipt).

As I say whatever the reason the official registered it my thoughts are that it counts for nothing really.

[InterestedObserver]

As I say this appears to be 2 seperate leases to 2 separate lessees - not a renewal.

The 2nd lease is apparently not just a contractual promise but rather has alredy been registered and appears on the back of the chanote.

It appears the price for the 2nd lease has already been paid (tax receipt).

As I say whatever the reason the official registered it my thoughts are that it counts for nothing really.

If nobody challenges the second lease in the Thai court system, it will take effect in 30 years time.

[chiangmaibruce]

I agree with much of what has been said already, in particular:

*Just because this arrangement (or many other approaches mentioned in this forum) has been registered doesn't mean you have protection ... but by the same token it need not be a "mistake" either - just a differing interpretation of the law

* the concept of sequential leases IS probably contrary to the spirit of the law and sooner or later will be challenged in court

Aside from the thread mentioned by the OP (Phuket forum) there has been another thread on this topic in the property forum ... one of the contributors to that one was (I think) IsaanLawyers ... I could probably find the link if someone needs it. The outcome of that discussion was maybe yes and maybe no .... that basically we'll just have to wait and see until it is tested court. If anyone happens to know of such a case then please let me know.

[thaiwanderer]

If nobody challenges the second lease in the Thai court system, it will take effect in 30 years time.

Of course, just as if no one challenges a squatter they can continue to squat.

[CRUNCHER]

If the Thai Legislative wanted to allow 60 year leases (which is what you are trying to get) they would change the law. The limit is now set at 30 years and anything else is just a dream. As with all dreams it might come true, but usually they don't.

[katabeachbum]

If the Thai Legislative wanted to allow 60 year leases (which is what you are trying to get) they would change the law. The limit is now set at 30 years and anything else is just a dream. As with all dreams it might come true, but usually they don't.

60 years leases are not allowed.

but 30 years leases for 2 different individuals on the same property is allowed, one starting 30 years after the first one

[cheeryble]

but 30 years leases for 2 different individuals on the same property is allowed, one starting 30 years after the first one

This is a good point.

How can a court have any valid objection to a lease to a separate individual?

[Khun Jean]

but 30 years leases for 2 different individuals on the same property is allowed, one starting 30 years after the first one

This is a good point.

How can a court have any valid objection to a lease to a separate individual?

If one of those individuals is a acting as a 'proxy' for the other it would be invalid.

If it can be proven that both individuals pay for the leases with their own money i would not see a problem,

however the landowner can cast doubt on this by stating that the leases were forced on him and challenge the validity. If this happens after 29 years are they going to be believe the 'smart' farang or the 'poor' landowner. And what happens when year 31 arrives. The first lease holder moves out and the second moves in? If not, another challenge can be done as it is then proven the 2nd leaseholder was indeed a proxy for the first.

You then have to ask what is the worth of this construction when a simple usufruct gives a right for the lengths of ones life and by including a younger family member its valid even longer and none of these future problems are possible.

[Sunbelt Asia]

While it is possible to register sequential leases it is very rare. According to the regulation related to the registration and jurisitic Act involving leases of land, the Civil and Commercial Code B.E. 2551, Chapter 1, Clause 28 states:

“In the case if a lease had already been registered, and during the lease period where the lease is not yet expired. The execution of the second lease agreement with conditional timing that would commence after the first lease had expired. The registration must also not in the Subject Section that To lease for ....Lease Period.... and with Conditional Timing specify in the type of registration. Such specification must be specify on the left hand side of the Petition Forms (Tor Dor 1 or Tor Dor 1 Gor). Furthermore in the detail of the registration, it must specify the effective date/commencement date of agreement.” But it should also be noted that the timing must also be in accordance to the Land Act.

This would indicate that registering a second lease while the first lease is in effect is possible but more likely possible with a 10 year lease followed by a 10 year lease. The Bangkok Land Department usually only allows a maximum of 30 years for leasing. So, in all likelihood, it would be extremely difficult to register a 30 year lease while a 30 year lease is already in effect.

http://www.sunbeltlegaladvisors.com

[johnnyk]

Thirty years is a long time. Even longer in Thailand.