Watertight Lease W Right To Transfer Ownership

[Dragonman]

Personally I think a lease is a far stronger concept than anything else under thai law, but of course all lawyers will have their own ideas. Whatever, I would not consider a mortgage without also a lease, as the mortgage may be deemed illegal at any time, not so the lease. I would be interested to find out when your lawyer has seen any commercial mortgage linked to value! I have not!

Ah now that's very informative D'man because as a layman I would have thought a recorded debt would have been stronger.

As for the "80% of rise in value" concept , well if this was a regular investment loan, wouldn't it be reasonable to "divide the spoils?" This must happen in so-called "real life" mustn't it? How could one build this in?

I reiterate that I feel I have a fine lessor and don't mind the owed amount being a bit under par....80% of a rise would be sufficient I'm sure.

I shall put what you have said to this lawyer D'man, and thanx again for your advice.

ps: Remembering what you said in a past post about checking if the relevant land department disallows these sort of leases. Would a reasonable option be to register the mortgage but keep the lease non registered....does this weaken the lease's validity much?

In normal circumstances the mortgage would be a strong legal concept. However where any mortgage by a foreigner opens itself up to scrutiny by the Land Department, or the relevant Financial Regulators, I do not think this is the case. Leases however are accepted and strictly speaking encouraged by the Authorities as a means to "borrowing" the property from a thai for 30 years In Court I would find it easy to defend a foreigner questioned for having a lease, not so for providing a mortgage on a home where he has a lease and lives free of commercial rent, but also has a right to buy! The "value" mortgage would really be a Joint Venture if it were not for the fact that you are a foreigner, and I am not knowledgeable enough to comprehend the implications regarding investment laws for foreigners. You would need to check if it would be considered a business agreement rather than a loan from a private individual.

Yes, to have the legal strength it needs to be registered. However if you, or your lawyer feels the mortgage is OK, you could of course have unregistered 3 year renewable leases. I doubt this will suit, but better than no lease, and no registration fees.

[sleepyjohn]

Thanx D'man for this thoughtful and comprehensive answer, and thanx for all the other input up til now.

If you're ever in Chiangmai give me a call and I'll buy you dinner.

kind regards

Sleepyjohn

[sleepyjohn]

With regard to the "superficies", this is really a right to build and register your house on someone else's land. The house is yours, and you are able to live on the property for 30 years. The owner may then apply for an eviction notice, which may or may not be granted, at the whim of the judge. You can of course take your house with you Very simple process, but gives little protection after that 30 year period.

I am going back to this lawyer tomorrow. I feel I can use her.

The only question in my mind is LEASE or her suggestion SUPERFICIES.

I am not capable of making a nice spreadsheet, but I have noted some advantages and disadvantages of each method.

LEASE:

Advantages:

Exclusive use of property.

Disadvantages:

Open to Land Dept exclusion.

Not inheritable without extra clause.

30 yr max unless (maybe!) options.

Taxes due.

SUPERFICIES:

Advantages:

Lasts up to lifetime of either party if desired.(but see below)

No tax.

No Land Dept problems.

Inherits.

Disadvantage:

Is use of property completely exclusive?

(It looks like it can be 30 years OR life:

FYI: Statutes Section 1412:

A right of superficies may be created either for a period of time(Sect max 30 years) or for the life of the owner of the land or of the superficiary.)

My questions for my lawyer are:

How exclusive are rights to use the land?

Do rights continue on death of "owner"

Could I buy exclusive access at a very low cost?

Can add option to buy, lease or first refusal to buy for a fee?

Can add loan agreement?

These are also questions for our lawyers on this forum!!

The statutes about this subject are very basic and unclear in at least one important instance.

Where does one look for further clarification? Does it exist?

(On further perusal the statutes really ARE unclear.

1412, and 1413 seem to clash:

1412:"A right of superficies may be created either for a period of time(Sect 1403max 30 years) or for the life of the owner of the land or of the superficiary."

1413 however says if no time is fixed the rights can be terminated on reasonable notice.

So do you get it for life or don't you? If not what would be the point of 1412?)

THANX

Edited March 30, 2006 by sleepyjohn

[Dragonman]

With regard to the "superficies", this is really a right to build and register your house on someone else's land. The house is yours, and you are able to live on the property for 30 years. The owner may then apply for an eviction notice, which may or may not be granted, at the whim of the judge. You can of course take your house with you Very simple process, but gives little protection after that 30 year period.

I am going back to this lawyer tomorrow. I feel I can use her.

The only question in my mind is LEASE or her suggestion SUPERFICIES.

I am not capable of making a nice spreadsheet, but I have noted some advantages and disadvantages of each method.

LEASE:

Advantages:

Exclusive use of property.

Disadvantages:

Open to Land Dept exclusion.

Not inheritable without extra clause.

30 yr max unless (maybe!) options.

Taxes due.

SUPERFICIES:

Advantages:

Lasts up to lifetime of either party if desired.(but see below)

No tax.

No Land Dept problems.

Inherits.

Disadvantage:

Is use of property completely exclusive?

(It looks like it can be 30 years OR life:

FYI: Statutes Section 1412:

A right of superficies may be created either for a period of time(Sect max 30 years) or for the life of the owner of the land or of the superficiary.)

My questions for my lawyer are:

How exclusive are rights to use the land?

Do rights continue on death of "owner"

Could I buy exclusive access at a very low cost?

Can add option to buy, lease or first refusal to buy for a fee?

Can add loan agreement?

These are also questions for our lawyers on this forum!!

The statutes about this subject are very basic and unclear in at least one important instance.

Where does one look for further clarification? Does it exist?

(On further perusal the statutes really ARE unclear.

1412, and 1413 seem to clash:

1412:"A right of superficies may be created either for a period of time(Sect 1403max 30 years) or for the life of the owner of the land or of the superficiary."

1413 however says if no time is fixed the rights can be terminated on reasonable notice.

So do you get it for life or don't you? If not what would be the point of 1412?)

THANX

Hi sleepyjohn. Now I personally have a great dislike of 2,500 year old Roman Laws constructed for plebs, (No Offence ) so I am biased. They are not used in the UK for the very reason they have more holes in them than my old socks Nadia2 seems to favour them, due to the possibility a Judge will see fit to follow the letter of the Civil Code, and hence allow you pleasure for life, if mentioned in the terms. You then of course can't pass on any inheritance, despite it being allowed in superficies law.

The french law based on Napoleonic Code also states "for life", but then goes on to say "restricted to 30 years", and guess who drafted the thai Codes, French, Belgian, German and Japanese lawyers. Say no more!

Rights to use the land are also unclear, (as you have "aedes superficiariae", rights to build and enjoy the house) although you of course have right of access. It is normal for a land lease to also be established to ensure safety.

I shall be interested to hear your lawyers opinion regarding a law that has baffled lawyers for 2,500 years. Good Luck

[Nadia 2]

Hi sleepyjohn. Now I personally have a great dislike of 2,500 year old Roman Laws constructed for plebs, (No Offence ) so I am biased. They are not used in the UK for the very reason they have more holes in them than my old socks Nadia2 seems to favour them, due to the possibility a Judge will see fit to follow the letter of the Civil Code, and hence allow you pleasure for life, if mentioned in the terms. You then of course can't pass on any inheritance, despite it being allowed in superficies law.

The french law based on Napoleonic Code also states "for life", but then goes on to say "restricted to 30 years", and guess who drafted the thai Codes, French, Belgian, German and Japanese lawyers. Say no more!

Rights to use the land are also unclear, (as you have "aedes superficiariae", rights to build and enjoy the house) although you of course have right of access. It is normal for a land lease to also be established to ensure safety.

I shall be interested to hear your lawyers opinion regarding a law that has baffled lawyers for 2,500 years. Good Luck

Nothing negative about Roman laws..... when you study it it is interesting to see that not that much has changed since then. I see no reason when the Thai law says it is for life it should be as a rule restricted to 30 years. It could be subject to limitation but not as a general rule.

I would (again) advice Sleepy to take the 30-year lease with all the options. There is a reasonable one a few pages back but you have to get a good Thai translation according to Thai law. Put in the lease that you are allowed to build your house on the land and that you will own it - register ownership at the land office.

I think Sleepy by now you may have some legal knowledge (but maybe missing the essence sometimes) and you may confuse the Thai lawyers and they will (for the legal fees) go with you in alternatives like superficies, loan agreements, mortgages etc. Maybe the next person you speak to may have another great idea, but it is really the 30 year lease you should stick to in the first place and the complicated alternatives you mention are not the answer to the million dollar question 'how to own land in Thailand'.

Go back to your first lawyer who said there is nothing secure beyond the 30 years – he was right in the first place....

Most anwers to your questions are already answered in this topic

Cheers

[sleepyjohn]

Thanx to you both for great opinions!

Dragonman:

"I shall be interested to hear your lawyers opinion regarding a law that has baffled lawyers for 2,500 years. Good Luck "

I asked the lawyer the questions I said I would, and I paste them here:

My questions for my lawyer are:

How exclusive are rights to use the land?

She said they were in effect exclusive and I wouldn't need anything else to strengthen them in this respect. She didn't tell me specifically why.

Do rights continue on death of "owner"

No but procession takes care of reimbursement for value of buildings etc.

This her opinion and perhaps yours too D'man despite Section 1411:

"Unless otherwise provided in the act of creating it, the right of superficies is transferable and transmissible by way of inheritance"

My Mother used to say about my Dad: "If I said black was white he'd say it was red!"

The law seems a bit like my Dad, but not so much....it's only saying black is white. Comments?

Could I buy exclusive access at a very low cost?

Not necessary

Can add option to buy, lease or first refusal to buy for a fee?

Something already in her agreement

Can add loan agreement?

I didn't note the answer but believe it's yes

Nadia:

"I would (again) advice Sleepy to take the 30-year lease with all the options. There is a reasonable one a few pages back but you have to get a good Thai translation according to Thai law. Put in the lease that you are allowed to build your house on the land and that you will own it - register ownership at the land office. "

Thank you Nadia for being decisive and it seems you and Dragonman both agree here, which is real progress!!!

I must say however that after telling the lawyer my situation and saying i was undecided and which did she prefer, she went on balance for the superficies.

I shall post this tonight and tomorrow try to draw some conclusions.....

Edited March 31, 2006 by sleepyjohn

[Dragonman]

Thanx to you both for great opinions!

Dragonman:

"I shall be interested to hear your lawyers opinion regarding a law that has baffled lawyers for 2,500 years. Good Luck "

I asked the lawyer the questions I said I would, and I paste them here:

My questions for my lawyer are:

How exclusive are rights to use the land?

She said they were in effect exclusive and I wouldn't need anything else to strengthen them in this respect. She didn't tell me specifically why.

Do rights continue on death of "owner"

No but procession takes care of reimbursement for value of buildings etc.

This her opinion and perhaps yours too D'man despite Section 1411:

"Unless otherwise provided in the act of creating it, the right of superficies is transferable and transmissible by way of inheritance"

My Mother used to say about my Dad: "If I said black was white he'd say it was red!"

The law seems a bit like my Dad, but not so much....it's only saying black is white. Comments?

Could I buy exclusive access at a very low cost?

Not necessary

Can add option to buy, lease or first refusal to buy for a fee?

Something already in her agreement

Can add loan agreement?

I didn't note the answer but believe it's yes

Nadia:

"I would (again) advice Sleepy to take the 30-year lease with all the options. There is a reasonable one a few pages back but you have to get a good Thai translation according to Thai law. Put in the lease that you are allowed to build your house on the land and that you will own it - register ownership at the land office. "

Thank you Nadia for being decisive and it seems you and Dragonman both agree here, which is real progress!!!

I must say however that after telling the lawyer my situation and saying i was undecided and which did she prefer, she went on balance for the superficies.

I shall post this tonight and tomorrow try to draw some conclusions.....

Agree with Nadia, I can only professionally suggest leases as a tried and tested format that gives you a definite 30 years, by when there will probably be changes in foreign ownership laws. All other methods are a possible way around the law, and possibly not

With regard to your lawyer's first point. If you want exclusive rights to the land and everything on it you should obtain a usufruct, not superficies! Ask why she prefers.

As I said previously how can it be "lifetime" if it can be inherited? However well intentioned Roman Law was, the translation from Latin to French to Thai to English doesn't exactly flow.

[Jersey_UK]

Cheers, an Interesting thread folks (I did as suggested, a search ).

My approach to most things is to try find out what works in practice and from what I have read here the 30 year lease seems to be "bombproof" (as anything ever gets when dealing with legal matters).

Anything else varies from probable / maybe / don't p#ss off the wife - and is likely to be at least "arguable" and therefore involve a lot of lawyer time and $, if things become contentious.

I truly hesitate to ask about Thai Trust law, or is this something else they have borrowed from Napoleon "Non"

Funnily enough I actually agree that the Thais SHOULD restrict foreign land ownership (but that is another thread!) and in my case the most I am ever likely to do is buy a Condo for extended holiday use, it is not somewhere I would want to live 24/7 anyway - unless I had less than 30 years to go / was dribbling in my rocking chair........but still fancied the odd night out with a 21 yo

[Dragonman]

I truly hesitate to ask about Thai Trust law, or is this something else they have borrowed from Napoleon "Non"

Oui, the Thai Civil Code has the same regs. as the French. Some 6 years ago Thai government officials took advice on how they could incorporate Trust Laws into the Civil Code. As normal here, there seems to be little action.