New Property Law?

[Nip]

Just wondering? Recently a friend (non Thai) purchased a house in Phuket by means of a 30 year renewable lease??? I am aware that a non Thai national purchasing property by what ever means in Thailand can be seen to be circumventing Thai law etc etc? That when challenged the legality of these leases are unlikely to stack up in court but .... When he questioned the sales agent he purchased the property from he was informed that there was an amendment introduced recently in Thailand that allowed the purchaser of a '30 year lease property' who has power of attorney to go to the land office pay a fee I believe of something in the order of 1% and immediately extend the lease to 60 years. Now I have seen no notification of this in any publication other than some months ago the idea being loosely touted in the press.... I may be wrong but I believe the inormation proffered was incorrect?

[thaiwanderer]

I have a tower in Paris for sale if your friend is interested.

[Langsuan Man]

How often is this new non existent law going to continue to be touted here

Let's try it again. There is no such thing as a legal lease beyond 30 years, that is recognized by the Land Office. There is such a thing as a usufruct that can last for your lifetime, which may be more than thirty years , but there is nothing new about it. Fortunately obtaining a 30 year lease, like your friend did, is not circumventing the law about owning property here in Thailand, since the law recognizes leases, it just does not recognize or validate any lease over the statutory 30 years, and leasing is still not owning, so you friend is not liable for circumventing the property ownership laws

[Mobi]

'Renewable' thirty year leases are an old con and have been around for a long time.

There is no way that the land office would agree to register such an agreement on the land title deeds.

If both parties to the contract, (land owner and lessee), sign such a document and the land owner honours the lease renewal in 30 years time, then all is fine and dandy.

But its a big 'if' as such contracts are not legally enforceable and there has been no change in the law.

If there had been any change, trust me, it would be headlines everywhere.

[MJo]

Yup, your friend did not purchase anything. He leased property for 30 years and paid upfront. Take the amount paid and divide by 360 and you have your monthly rental.

[Vorranuch]

When he questioned the sales agent he purchased the property from

[Nip]

Thank you for responding. All the comments confirmed my understanding of the situation but I will add that I have seen a document very recently written by an honorary consul that states quite clearly that the 30 year lease is considered by the Thai authorities to be a circumvention of Thai law and that if it is challenged in court it will not stand up! And that their view is sum num na!

[BigJohnnyBKK]

Thank you for responding. All the comments confirmed my understanding of the situation but I will add that I have seen a document very recently written by an honorary consul that states quite clearly that the 30 year lease is considered by the Thai authorities to be a circumvention of Thai law and that if it is challenged in court it will not stand up! And that their view is sum num na!

A genuine 30-year lease is just a lease and is no problem. At the end of 30 years the owner has the right to re-occupy the property and any immovable improvements revert to their ownership.

As long as that's clear to the "buyer" there's no problem. The problem comes when the "buyer" is led to believe "don't worry you'll be able to renew for another 30 years" as that's the part that's completely unenforceable and should IMO raise a red flag leading to the authorities involved warning the "buyer" of possible fraud. But since the officials are usually on the side of the Thai party to the deal, not any abstract notion of justice, this usually doesn't happen.

If you're happy to pre-pay up-front in exchange for the security and stability of being (most likely) able to occupy the property for 30 years, that's fine, just know that's all you're getting. And of course in the end the contract won't be enforceable if anyone in a position of power wants to screw you over they can.

Issues of liability, transferability, possiblity of sub-leasing etc should of course be carefully reviewed by a qualified attorney who was referred to you by a trusted westerner - not anyone associated with a Thai and especially NOT the seller, agent or anyone connected to local officials or the police and ESPECIALLY not via your girlfriend/wife's family - to be safe any Thais.

[Mobi]

Thank you for responding. All the comments confirmed my understanding of the situation but I will add that I have seen a document very recently written by an honorary consul that states quite clearly that the 30 year lease is considered by the Thai authorities to be a circumvention of Thai law and that if it is challenged in court it will not stand up! And that their view is sum num na!

A genuine 30-year lease is just a lease and is no problem. At the end of 30 years the owner has the right to re-occupy the property and any immovable improvements revert to their ownership.

As long as that's clear to the "buyer" there's no problem. The problem comes when the "buyer" is led to believe "don't worry you'll be able to renew for another 30 years" as that's the part that's completely unenforceable and should IMO raise a red flag leading to the authorities involved warning the "buyer" of possible fraud. But since the officials are usually on the side of the Thai party to the deal, not any abstract notion of justice, this usually doesn't happen.

If you're happy to pre-pay up-front in exchange for the security and stability of being (most likely) able to occupy the property for 30 years, that's fine, just know that's all you're getting. And of course in the end the contract won't be enforceable if anyone in a position of power wants to screw you over they can.

Issues of liability, transferability, possiblity of sub-leasing etc should of course be carefully reviewed by a qualified attorney who was referred to you by a trusted westerner - not anyone associated with a Thai and especially NOT the seller, agent or anyone connected to local officials or the police and ESPECIALLY not via your girlfriend/wife's family - to be safe any Thais.

Great post, with which I heartily concur.

[Tanaka]

So your friend has rented a land area for 30 years. What about the house? Does he have a lease on that too? Because they are different entities. A land lease is just that. It does not automatically include any buildings on the land if this is not stipulated in the contract.