Changing Leasehold To Freehold

[jingjoe8]

I am looking at purchasing a small house in a resort.I can purchase it on a 30 year lease and the company is offering a 5 year low interest vendor finance.

Once i own the property outright is it possible to put it in my sons name and change it to freehold,he is still an infant and i am separated from my thai wife.If this is possible would i then not have to worry about renewing a lease after 30 years and continue living on the property

Second question can i buy a rai of land in my sons name then build on it.The land would be purchased outright, im hoping this will give me some protection as an owner.I have a very good relationship with my ex wife and have access with my son every week.If this is possible are there any pitfalls involved.

[hhgz]

"I can purchase it on a 30 year lease...Once i own the property outright..."

You don't own the property after 30 years, you've only leased it. At the end of the lease, the disposition of the property is up to the land owner. Perhaps the LO will extend the lease, perhaps not. During the period of the initial lease, you can speak with the land owner if he'd consider selling the property - you have lots of time, 30 years.

[Khun Jean]

Lots of time to save some more money. Expect at least 10x what you paid for the first 30 years.

But if i read the post in another way the question is if you not lease it but buy it outright (freehold) and put it in your sons name.

You can, of course then the decisions about its uses will be taken by a court because the child is a minor.

Buying land with a house already on it would be easier as presumably nothing drastic has to change to live in it.

And in old age don't piss of your son, he might throw you out. So no talk about wrong friends and girlfriends and that he has to change his style of living.

[jingjoe8]

i understand a 30 year lease is really just paying 30years rent in advance,and after 30 years you renegotiate the term if the landowner is willing

.When i say i will own it outright i mean after the 5 year finance i will owe no money on it.The resort is divided into sections of 8.

1 section as been designated for thais who don't wish to buy under the 30 year lease agreement but can own the land freehold,the properties are one and 2 bed apartments ranging from 60m2 up to 120sqm so the land size isn't large.

I have been told i can purchase in the thai section and change my agreement from a 30 year lease to freehold once property is paid in full.

Is this possible and if it is will this mean i don't have to renew the lease in 30 years and can live there as long as my son allows.I would prefer the freehold straight away but i don't think you can buy a property in a childs name that has debt associated to it?

[Khun Jean]

A change in agreement means that you have to part with some money again and they are very difficult to enforce. I would not consider it.

Why not buy freehold in the first place skipping the whole 30 year lease nonsense.

Another options is a usufruct, but probably they don't want that, a lease is much more profitable.

Leases have the tendency to deprecate very quickly and are not easy to transfer/sell.

If money is the problem, buy something cheaper or rent and save first or consider other ways for financing.

What are the prices in this 'resort'. Amenities, good location? etc.

Edited October 22, 2012 by Khun Jean

[jingjoe8]

A change in agreement means that you have to part with some money again and they are very difficult to enforce. I would not consider it.

Why not buy freehold in the first place skipping the whole 30 year lease nonsense.

Another options is a usufruct, but probably they don't want that, a lease is much more profitable.

Leases have the tendency to deprecate very quickly and are not easy to transfer/sell.

If money is the problem, buy something cheaper or rent and save first or consider other ways for financing.

What are the prices in this 'resort'. Amenities, good location? etc.

I didnt think i could buy freehold if there was finance attached to the chanote if put in a childs name.

The prices range from 2mb up to 4mb,each block of 8 apartments has its own pool,restaurant clubhouse on site short walk to beach,not far from a major city.

The thinking behind the finance was,if during the 5 years the management didn't look after the property as many around thailand aren't i could use the remainder of money owed as incentive for them or cut and run.

[Khun Jean]

You do need to be more clear. First it is a small house, then an apartment and then a condo.

An apartment in Thailand is a building with many separate rooms. A condo is a separate legal entity within a building with common ownership of land and other shared areas. Thai sections/foreigner sections? It seems a strange way. Do they stay within lawful boundaries with this?

If small buildings are shared, how is maintenance and other things organized?

With only seven other owners it can be a blessing or a curse.

Is it off plan or they are already built? They have a website?

Indeed property with debt can not be registered in a childs name. I was thinking more of alternative private finance.

[jingjoe8]

They advertise them as houses,but to me they resemble what i would call apartments,they are 2x rows of 4 houses sharing walls with a swimming pool in the middle they all have roof balconies.They are in clusters of 8 or so scattered around the clubhouse,restaurant, so 8 houses in a group with pool so altogether 8pools and 64 houses.They are about a year old and the maintenance fee is about 3000bht a month paid in advance,which pays for security,,repainting,pool maintenance etc,etc..Most are owned by europeans who put them in a rental pool which gets divided up equally,less management fees,when they use their house they are taken out of the rental pool,talking to a few owners they seem to be returning about 14000bht a month.I was more interested in it as a long term residence,

[Khun Jean]

Does sound ok. Maybe mention its name, it could be that some thaivisa members know it and can give some more specific information.

For me personally i would not find it suitable for long term. Tourists get irritating within no time. Depends what kind of tourist but many are loud and obnoxious. Especially at night. It sound good for soe rental income.

It seems that those houses, townhouse is maybe a good word for it, are just like any other in Thailand. Foreigner can not buy, and no such things as foreigner quota etc.

Why is there still a distinction between thai/foreign section?

Now getting it in your sons name is indeed the problem. I would not consider a 30 year lease.

Maybe a 5 year lease with a guaranteed buy option for a fixed price?

Might be accepted, but you would have to make it rock solid. Rock solid in Thailand is not the same as in the western world, so be carefull.

3000 baht a month, only you can estimate if it is reasonable. 8x3000 = 24000 would pay about 2 employees and some maintenance materials.

[jingjoe8]

Thanks for the feedback,you might be right about the tourists been obnoxious,i might look at renting there for a while first,the management fee is 3000 per month times 8 in the cluster times 8 clusters so 192000bht a month to take care of 8 pools one clubhouse and restaurant and reception,plus they recieve about 40% of the rental money for managing the short term rentals.thru sites like agoda,asian rooms etc.

[johnnyk]

Management fee ripoff.

I pay 17K a year for maintenance including street lighting, security, common area maintenance/gardening, rubbish collection, water and common electricity on a large estate with all the houses separate, not jammed together with common walls.

[IamNotaNumber]

I have been told i can purchase in the thai section and change my agreement from a 30 year lease to freehold once property is paid in full.

Hard to see how this can be anything other than a scam, or at best a complete breakdown of communication.

If you want to buy land in Thai/company name, do it from the word go. Anything else is only going to cause problems and be expensive later.

If you want to lease, lease today on the understanding that you are paying 30 years land rent in advance and that's all.

Bear in mind that in Thailand one 30-year lease is enforceable by law but it ends there. So no matter what you are told today that you can do in the future, you probably wont actually be able to do it when the time comes unless the owner is still agreeable. And in Thailand that usually means paying more money.

[Khun Jean]

Management fee ripoff.

I pay 17K a year for maintenance including street lighting, security, common area maintenance/gardening, rubbish collection, water and common electricity on a large estate with all the houses separate, not jammed together with common walls.

Although i also think it is rather high, it has 8! swimming pools. It all depends on how good it is done.

17k per year can also be a ripoff when the services are not correctly done.

[johnnyk]

Management fee ripoff.

I pay 17K a year for maintenance including street lighting, security, common area maintenance/gardening, rubbish collection, water and common electricity on a large estate with all the houses separate, not jammed together with common walls.

Although i also think it is rather high, it has 8! swimming pools. It all depends on how good it is done.

17k per year can also be a ripoff when the services are not correctly done.

Eight pools can be an eight-fold headache. Pools are so-o-o easy to screw up. I have my own pool so no worries there. Our estate will see fees reduced in the near future when we all get our individual water meters. Right now our water runs through one main meter so we are charged at the highest rate by the muni based on the whole estate being a high-volume user. We make our requirements clear and fire people who don't do the job correctly.

[simon43]

If you want to lease, lease today on the understanding that you are paying 30 years land rent in advance and that's all.

This is the way I do it...

I lease a piece of titled land (Chanote) from the Thai owner for a period of 30 years. There is no upfront lease payment or 'key-money' or whatever, other than the land tax that is due when the lease is registered at the Land Office. I pay the land owner a monthly rent for 30 years - the amount of which is specified in the lease contract for the complete lease period, including any agreed annual rent increases.

My lease is secure because it is registered at the Land Office and detailed on the back of the Chanote. As a foreigner, I can legally lease land in my name only without a Thai partner.

I then build my teak/hardwood house on the land, and that house is a 'moveable' structure, which means that if some terrible problem should occur in latter years, I simply disassemble my house and take it and myself to another piece of land....

As long as I keep up with my monthly lease payments, my landlord has no claim on my property and cannot alter or void the lease agreement.

I have done leases of this type three times so far in Phuket for businesses, and never had any problems in finding local Thais who are willing to lease me building land on a monthly payment basis.

I almost went ahead with the house-build option on a beautiful 1 rai of land in north Phuket by the national park - $300 rental per month for 30 years and no annual rent increase - but work took me to Myanmar.

The way things are going, I'm looking to repeat in Myanmar this same concept of long-term lease and build a moveable house...

Simon