Usufruct -Vs- 30 Year Lease?

[johnnybgood]

My Thai wife (whom I want to divorce - but that's another ongoing story) has a piece of land which she owns, her name is of course on the Chanote.

She would like to build rental accomodation on her land.

I am thinking of a business opportunity, however I find some online info confusing and I won't approach a Thai lawyer until I've done some research.

If big IF I become involved what would serve my interests better an Usufruct agreement? Which on reading other threads

(1) costs very little.

(2) is a simple standard document at the Pattaya land office.

(3) a lawyer is not required.

or a 30 year lease?

(1) can it cost a nominal amount?

(2)what is the benefit other than the right of access provided by an Usufruct?

(3)do I need a lawyer?

PS Again reading other threads, I would have to divorce first as any agreement between man and wife can be voided at any time. Does this ability to void continue for a full year w.r.t.

Usufruct and a 30 year lease.

Thanks for any help , and apologies if some of this sounds Irish .....'cos I am.

Edited December 12, 2012 by johnnybgood

[george]

Some land offices does not give you an Usufruct if you are not married.

[Khun Jean]

And many landoffices do what the law allows.

If the structure is build it can be in your name 100%. If you pay for it, then it seems the right thing to do.

You can make a contract to share revenue.

A lease in that case is simpler, but never pay the whole 30 year at once. Do it monthly or yearly.

Edited December 12, 2012 by Khun Jean

[johnnybgood]

Thanks to both of you for replying, it seems every answer poses more questions here. I just don't know [or trust] enough.

George - "Some land offices does not give you an Usufruct if you are not married".

SO ....one cannot / may not get it if married...but an Usufruct issued when married is useless on divorce.

OK let's use the Pattaya land office specifically...... anyone on TV have any experience there to share?

Khun Jean "A lease in that case is simpler, but never pay the whole 30 year at once. Do it monthly or yearly"

Good advice -Let's say the land is worth 500.000 baht, is there a minimum % payment for the lease?

Because I'm thinking of just a nominal sum just to allow the lease process to go through.

My take on this reading TV... first step is to get divorced at the Amphur. Wait a clear year, then arrange an Usufruct or lease.

PS guys..... Wifee's lawyer [who drew up our divorce agreement] says we can " Divorce and usufruct all on the same day" . Which contradicts all I've read here, and therefore gets a pinch of salt.

Any precedents? Anyone please?

[ThailandInvestmentGuide]

Ok a few comments. Some land offices refuse to provide a usufruct to a foreigner AT ALL (there was a thread along these lines with the last week or two). This is where you do need to go in with a Thai lawyer.

You are correct though in homing in on the specific land office with which you will deal, and others experiences there. Try a forum search on Pattaya land office and see what you turn up. There are MANY previous valuable discussion threads on this topic.

I know the CC Code clause you are referring to but usufructs are not "useless" if you are married. Again see previous discussion threads that include details of where people have been through the Thai court process and weight was given to the usufruct and/or the provision of Thai divource laws. This is a complex issue and you are right to ramp up your general knowledge of this issue before approaching a lawyer and/or firming up your plans ... but there is heaps of free info online if you have the patience to find and digest it. Look for example at the samuiforsale web site (google on this)

[TongueThaied]

This is not what you asked, but I'll throw in out anyway. There are contract complications with wife, as you know, and one has to wonder about a business deal with somebody you are divorcing. So I had this thought:

Most Thais seem loath to sell any land, wanting to keep it for their kids, even if it means land lays fallow, or buildings are abandoned. It all seems quite insane to me. BUT, many would be absolutely delighted to GIVE you a usufruct if you were to build something nice on the property (a rental house, for example). Most expats are at least over 60 and the usufruct disappears upon death. A Thai would figure that their kids would have the land back -- and the free building within 20 years -- a nice little nest egg for them.

I really suspect that you could find a nice piece of land practically anywhere in the country and get a usufruct on it free (if you contractually agree to build as a condition -- and you are not too young). A usufruct from a stranger is enforceable. You can have your cake and eat it too. Just a thought.

Edited December 13, 2012 by TongueThaied

[Langsuan Man]

This is not what you asked, but I'll throw in out anyway. There are contract complications with wife, as you know, and one has to wonder about a business deal with somebody you are divorcing. So I had this thought:

Most Thais seem loath to sell any land, wanting to keep it for their kids, even if it means land lays fallow, or buildings are abandoned. It all seems quite insane to me. BUT, many would be absolutely delighted to GIVE you a usufruct if you were to build something nice on the property (a rental house, for example). Most expats are at least over 60 and the usufruct disappears upon death. A Thai would figure that there kids would have the land back -- and the building within 20 years -- a nice little nest egg for them.

I really suspect that you could find a nice piece of land practically anywhere in the country and get a usufruct on it free (if you contractually agree to build as a condition -- and you are not too young). A usufruct from a stranger is enforceable. You can have your cake and eat it too. Just a thought.

In thought correct but in practice not so true. The problem is that most Thais are loathe to deal with lawyers or officialdom in any form. Add that they really don't think in long term (and 20 years is long term) and most just want the money right now, since they don't trust anything but what they can see

[TongueThaied]

On further consideration of my proposal, I stand corrected. I guess it's hard not to think like a Westerner. Langsuan Man has his finger on the pulse.

[Khun Jean]

I agree with TongThaied. It does work as not ALL Thai are 'simple' in that regard.

The great fear for Thais is TAXES!!!

A usufruct will not be a problem for the owner in that regard.

Khun Jean "A lease in that case is simpler, but never pay the whole 30 year at once. Do it monthly or yearly"

Good advice -Let's say the land is worth 500.000 baht, is there a minimum % payment for the lease?

Because I'm thinking of just a nominal sum just to allow the lease process to go through.

Divide it by 10 (to get a yearly rental price) and you have a good starting point that can be commercial interesting for both parties. In a contract for yearly payments you can include a price increase that follows inflation or a fixed percentage.

I have done a few of those, yearly payments in advance, 10% increase every 3 year, 30 year long and a clause that it can be 'renewed' every three year for a new 30 year period (old one is cancelled, new one is made) to at least give a legal possibility to the renter to get more then 30 years.

Another way and that is my newest contract 'style' (still working on that one) is that the rent has to be paid in advance for one year and then monthly. I have noticed that a yearly payment is more difficult because the one renting has to have money management skills, That quality is lacking with many people unfortunately.

Monthly payments are more manageable because it follows ones income and the amounts are smaller.

For me it also signals problems on the way which a renter has at that time one year to solve.

Edited December 13, 2012 by Khun Jean

[johnnybgood]

Thanks guys, thank goodness I'm small potatoes.... what a financial worry it would all be if I were at B.O.I. level.

Gooooogle! ...........come here boy!

[Gary A]

There are complications any way you go. If you want to invest in rental properties, buy condos, in your name, AFTER you are divorced. A lease while you are married becomes marital property and a usufruct can be cancelled.

[topt]

Thanks to both of you for replying, it seems every answer poses more questions here. I just don't know [or trust] enough.

George - "Some land offices does not give you an Usufruct if you are not married".

SO ....one cannot / may not get it if married...but an Usufruct issued when married is useless on divorce.

OK let's use the Pattaya land office specifically...... anyone on TV have any experience there to share?

.

Any precedents? Anyone please?

Yes I was able to get a Usufruct added at the time of paying for a house 2 years ago. The head land office guy refused to do it initially at the same time (suggested coming back next week) but eventually relented after an envelope was passed. So Patataya land office definitely does them.

[AyG]

I can't help thinking that this issue is rather back-to-front. The OP is planning on divorcing his wife - a woman, presumably, whose company he can't abide. Why then is he thinking of entering into a long-term business arrangement with her? And is building an apartment block really the best investment available - particularly since such an investment is so illiquid? I can think of plenty more lucrative (and lower risk) financial opportunities.

For that matter, has the OP fully considered the management of the property? Who will be responsible for insuring it? What happens if the insurance lapses and it burns to the ground? What if the wife doesn't want to continue managing the property? (It may well be in her best interests at some time to let the property get rundown and uninhabitable with a view to redeveloping the plot.) And what is the wife decides that the best option for her financially is for her business partner to be six feet under? (After all, she would have the financial motivation.)

I predict this will only end in tears.

[Khun Jean]

No risk no gain!

Just make sure you know the risks (there are many, especially as a person in Thailand with a western background/ideas) otherwise it is just a gamble.

Everyone has a different appetite for risk. I would not consider an apartment block in a good location high risk.

Again it comes back to knowledge. You first need to be able to recognize a good location and a part of the market you can serve.

When it is the first time you do this, start small and be able to survive it when it goes wrong.

One of my strategies that works is a known one :'Fail sooner!' I added 'and smaller'.

[cheeryble]

Bigwig at the land office in Mae Rim CM actually suggested using a usufruct (sit it geo gin) to me.

[johnnybgood]

@AyG Sorry for any ambiguity, this is a public forum. Let's say I'm divorcing for business reasons...........

[hgma]

EVERYBODY divorces for business reasons, and still Love them (thai women)

[TommoPhysicist]

Your wife has the right to cancel any agreement with you on divorce.

Much safer to make a lease or usufruct with a total stranger.

[uptheos]

Your wife has the right to cancel any agreement with you on divorce.

Much safer to make a lease or usufruct with a total stranger.

Not easy to find a total stranger that will give me a (rent free) 30 year lease on their house.

[TommoPhysicist]

Your wife has the right to cancel any agreement with you on divorce.

Much safer to make a lease or usufruct with a total stranger.

Not easy to find a total stranger that will give me a (rent free) 30 year lease on their house.

My wife has some land that you can build a house on, rent free. You can trust her, she's different.

Edited December 18, 2012 by TommoPhysicist