New Restrictions For Foreigners At The Land Department

[ThaiLawOnline]

Does anyone have heard about the new restrictions at the land department for foreigners wishing to make a long term lease or a mortgage?

I haven't been on thaivisa for a long time and I didn't look at all the topics. But this is what happened to us Wednesday:

We went with a foreign client and his wife to a land department to register a mortgage.

The head officer told us that they received some "directives" or "instructions". Basically, they will be more restrictive for any mortgage or long term lease given to a foreigner.

The land department has a wide "discretionary power" and they are difficult to argue with...

We were not able to register the mortgage and this is the first time it happens to us.

We know these people at the land department, and it has nothing to do with tea money or someone not knowing the law.

It was actually at the land department of Nakhon Ratchasima, where we are located. And we deal with land department of about 20 others places, mostly in Khon Kaen, Udon Thani, Nong Khai, Buriram, Pak Chong.

The law has not changed, but it seems all land departments have received clear instructions, applying for long term lease and mortgage. I think that was done last month. I can not confirm.

We will try to get a copy of this memo.

If anyone had a problem with another land department, it would be great to know.

If there was a post about it before, I would be happy to be redirected!

PS: I forgot to say that we had a MOU drafted with the mortage and we basically changed the MOU and registered a usufruct, which was fine for the client. But no mortgage.

Edited August 12, 2011 by Isaanlawyers

[Khun Jean]

I just think they are wisening up to all the tricks, thanks to all the 'constructions' that are used.

Just be happy usufruct and leases are still being allowed, although when it is 'abused' to many times it will be another of those decisions made by using their 'discretionary power'.

The excuse that they used that "directives" or "instructions" where send to them is of course bullocks. It is just to deflect any of your arguments which can be according to the letter of the law but most of the times go against the spirit of the law.

[ThaiLawOnline]

I also didn't believe the 'directive' part. But out Thai attorney, who works there often, insisted that she believes them. Because we know them quite well (and got copies of internal documents before from them) I asked if we can get a copy. If so, i will post here. Expect 2 weeks. If I don't reply with a copy, it's because we didn't get it!

It was applying to leases too, according to her, which doesn't make sense to me. For a mortgage, it makes sense and some land departmenst were already refusing them to my understanding. Not everywhere. We did maybe 5 or 10 this year without any problems. First time it happens.

[cardholder]

If I understand this correctly, the Land Department are refusing to register mortgages AND leases for foreigners (ONLY?).

Seb - I fail to see where it makes sense for mortgages and if the 'directive' also applies to leases, surely it will not be long before a usufruct is viewed in the same light ?

[donx]

I agree with Isaanlawyers that the restriction makes sense for mortgages but not leases. The issue with a mortgage is what happens when the thai paying the mortgage defaults on the loan? Normally the bank that makes the loan takes possession. If the loan is provided by a foreigner, how can they take possession of the land? This isn't the same situation as a foreigner inheriting land and selling it within one year.

I never did understand how this was allowed in the first place.

[BEENTHEREDONETHAT]

I agree with Isaanlawyers that the restriction makes sense for mortgages but not leases. The issue with a mortgage is what happens when the thai paying the mortgage defaults on the loan? Normally the bank that makes the loan takes possession. If the loan is provided by a foreigner, how can they take possession of the land? This isn't the same situation as a foreigner inheriting land and selling it within one year.

I never did understand how this was allowed in the first place.

That's a interesting point. If you can't own it how can you get a mortgage on it?

[Khun Jean]

That's a interesting point. If you can't own it how can you get a mortgage on it?

That is what i meant with 'tricks'.

Actually we as foreigners should be happy that landoffices are more strict, it save us from future disasters.

All those 'tricks' gives the foreigner a sense of security but in reality the only thing that counts is a lease for max 30 years or a usufruct for live and then even only when it is not with your spouse.

All the discussions for years on the topic of landownership are really unnecessary because the law is very straight forward.

Edited August 14, 2011 by Khun Jean

[manarak]

I also didn't believe the 'directive' part. But out Thai attorney, who works there often, insisted that she believes them. Because we know them quite well (and got copies of internal documents before from them) I asked if we can get a copy. If so, i will post here. Expect 2 weeks. If I don't reply with a copy, it's because we didn't get it!

It was applying to leases too, according to her, which doesn't make sense to me. For a mortgage, it makes sense and some land departmenst were already refusing them to my understanding. Not everywhere. We did maybe 5 or 10 this year without any problems. First time it happens.

So you got a copy or not?

would be interesting to know.

There were also reports of land offices refusing to register an usufruct.

I'd be interested to know the reason.

The refused case was between wife and husband, so I guess it could be because the usufruct would be void at divorce anyway.

But it could also be a general change in the rules to the disadvantage of foreigners.

The usufruct is certainly in the middle of any plans I could have to stay durably in Thailand.

[jackdawson]

new restrictions at the land department for foreigners

and so it begins

[TigerWan]

Maybe it's on hold as the new regulations are implemented? Maybe they're doing you a favor and the new law will provide for 90 year leases !!. Or allow foreigners to buy land for their own residence, with a gains tax to stall speculators. !!

I for one would like to see all the loopholes plugged up. Maybe then, fair and reasonable rules like the ones above would have to be implemented, or the nation would face an exodus. All this cheating with nominee companies and the selling of bogus 30 ++ renewals, Thai partner requirements , etc.just sets up a climate of graft and resentment.

[manarak]

Maybe it's on hold as the new regulations are implemented? Maybe they're doing you a favor and the new law will provide for 90 year leases !!. Or allow foreigners to buy land for their own residence, with a gains tax to stall speculators. !!

I for one would like to see all the loopholes plugged up. Maybe then, fair and reasonable rules like the ones above would have to be implemented, or the nation would face an exodus. All this cheating with nominee companies and the selling of bogus 30 ++ renewals, Thai partner requirements , etc.just sets up a climate of graft and resentment.

It will never happen.

And the 30 ++ renewals are not bogus. They are just hard to enforce due to many loopholes and weak private/contract law.

If Thailand implemented rules for lawful foreign ownership of land, prices would immediately soar out of control.

[BEENTHEREDONETHAT]

Fiji has handled the foreign land ownership by allocating about 10% of the land for foreigners to buy. The 10% increases greatly but the remaining 90% can only be owned by Fiji citizens, so the price remains stable for that part. Been working for years with no problems and no resentment. They could do the same here and solve the problem.

[manarak]

Fiji has handled the foreign land ownership by allocating about 10% of the land for foreigners to buy. The 10% increases greatly but the remaining 90% can only be owned by Fiji citizens, so the price remains stable for that part. Been working for years with no problems and no resentment. They could do the same here and solve the problem.

Well, if it costs the same as back home, I won't buy it!!! LOL.

[johnnyk]

Fiji has handled the foreign land ownership by allocating about 10% of the land for foreigners to buy. The 10% increases greatly but the remaining 90% can only be owned by Fiji citizens, so the price remains stable for that part. Been working for years with no problems and no resentment. They could do the same here and solve the problem.

Switzerland is similar.