30 Year Land Lease From Farang

[crazykopite]

Thailand makes it very clear that it doesn't want foreign ownership of land.

The playing field is stacked against the foreigner and unless you have Thai

citizenship, I would just walk away.

A Farang can own 1 rai of land in their name if he/she invests 40 million Baht in Thailand ( speak with a lawyer ) so if you have a spare 40 mil to invest hand it over then go buy you dream plot and build your dream home this scheme is for the seriously wealthy farangs !!!!!!

[indyuk]

In my view a lease with a Thai company is better than similar with a Thai national. If the Thai national dies –so does the lease.

Safer with a company I think.

I am no expert –others will confirm or suggest better alternatives

You are spot on. If you buy property on a lease or a Usufruct it is essential that you reduce your risk by buying from a company that is incorporated in Thailand. Usufruct is only better than a coventional lease if you accept that your heirs cannot inherit the property. And yes a usufruct can be renewed at the end of 30 years if an appropriate covenent was incorporated in the Usufruct at the time of purchase and that the principle holder of the Usufruct is still alive.

[johnnyk]

Don't lease, buy the company from the farang and you get the land for free

But do the due diligence to avoid paying for a company loaded with bad debts, liens and other nasties.

[johnnyk]

Now days it is no longer required that a Thai Ltd Co needs 7 share holders this has now been changed to 3 so in theory you could have 2 farang and 1 Thai the 2 farang holding a 49% and the Thai a 51%

crazykopite,

Minimum 3 share holders but no upper limit. But the Thai shareholders must be a majority so you cannot have 2 falangs and 1 Thai. Company control is exercised via the class of shares held. There are 2 classes, "preference" and "ordinary". Same in western countries. One class has 10 votes per share, the other has a single vote per share. Its the method western crooks have used to loot companies while owning far less than 50%. Dennis Kozlowski (Tyco) and Conrad Black are two examples.

Edited April 29, 2013 by johnnyk

[indyuk]

You need to bear in mind that, if the company is investigated at any time in the future and found to have been a nominee company used by a foreigner to own land, the company would be forced to sell the land and, failing that, it would be sold at public auction. Then you are dealing with a new owner who might look for ways to avoid honouring the lease, since the land will be worth a lot more without you on it. You might also be regarded by the police and public prosecutor as a party to the illegal ownership of land by paying for the lease, knowing full well the illegal land ownership structure. You cold be extorted and/or prosecuted as an accessory. Apart from that the company could go bust or even be forced into dissolution by the Business Development Dept for being inactive, if it has no real business. In the event of liquidation, the land will be sold to raise funds to distribute to the company's creditors. Apart from all that, it is highly likely that control of the company will change at some point within the 30 year lease period and the new controlling shareholders might be interested in finding a way to extract more value from the company's land holdings. At the very least, do your due diligence on the company but getting hold of its latest financial statements and lists of directors and shareholders and company affidavit from the Business Development Dept and see if the business is a going concern and who has the power to bind the company.

Leasing law is not well developed in Thailand and 30 years is pitifully the maximum tenure that can be registered with the Land Dept, except for commercial land which in certain clearly defined circumstances can be 50 years. Personally I wouldn't consider buying property on this basis at all and certainly not from a man of straw company set up by a farang for the purpose of illegally acquiring land. Stick to freehold condos you can own in your own name or rent. If you want exposure to Thai property, why not buy a tax free property fund (REIT) listed on the SET which pays a high dividend and use the dividends to pay your rent. You can sell the fund any time you want at the market price and get the proceeds in 3 days time that you can legally remit overseas. Try selling the stub of a 30 year lease on land owned by an illegal farang shell company and see what happens.

WOW anyone reading this would never buy anything in Thailand dare I say even a Freehold Condo how can you Guarantee even that your Condo is Freehold . Even in the Condo world there are many Condo's purchased by way of a Thai Ltd Co . Now days it is no longer required that a Thai Ltd Co needs 7 share holders this has now been changed to 3 so in theory you could have 2 farang and 1 Thai the 2 farang holding a 49% and the Thai a 51% I also see no reason why it could not stay in the farang name for many years providing you put your son/daughter as a director they must be 18 years of age. You can change your shareholders as often as you wish but if you do it at the end of the financial year when submitting your accounts there is no charge . Any lease over 3 years by law has to be submitted to the land office the lease would be made out between the owner of the land which should be a Thai Ltd Co and the person purchasing the lease once this has taken place at the land office and has been stamped I would conclude that it would be very difficult for the Thai Ltd Co or its new shareholders to be able to renege on the agreement taken out What does worry me is these companies who offer 30+30+30 year leases as far as I am aware this is not legal but as it is fairly new it is going to take a number of years long after I have passed to the next world to be tested in a Thai Court of Law. Not all of us want to live in rented homes for the rest of our lives setting up a Thai Co is no less at risk than signiong everything over to your Thai wife/girlfriend or having a Thai be a guarantor to purchase that nice new pick-up Life is a risk, crossing the road is a risk and living in Thailand is most definately a risk because they change the regulations and give you all of 24 hours notice !!!!!!!!!!!!

This staement is not entirely correct. In the unlikely event that an owner is served a compulsory order to sell his house to a Thai government department he wil be give two years to sell it without further interferance from the Land Office. This applies whether your nominee is cosidered acceptable of not.

Further in Thailand you can be served a compusory order to sell 'to make way' for a devepolment project or new infrastructure project. In this case you also have time to sell regardless of nationality i.e. it same for a foreigner or Thai in this Type of compulsory order.

Do not be scared off by Thai Rak Thai or Pua Thai or redshirt socialism when seeking to claw back housing from foreigners. Even Thaksin cannot ignore Thai Law at a whim.

Edited April 29, 2013 by indyuk

[misterme]

What about condos?

Surely, you can lease off of a foreigner?

And as a foreigner condo owner, I can lease to anyone, right?

As long as the transactions are done at the land title office, I would suspect everything should be good, no?

[elektrified]

What does "When purchasing land on a 30 year lease..." mean? You can't purchase land. Makes no sense.

[elektrified]

Thailand makes it very clear that it doesn't want foreign ownership of land.

The playing field is stacked against the foreigner and unless you have Thai

citizenship, I would just walk away.

A Farang can own 1 rai of land in their name if he/she invests 40 million Baht in Thailand ( speak with a lawyer ) so if you have a spare 40 mil to invest hand it over then go buy you dream plot and build your dream home this scheme is for the seriously wealthy farangs !!!!!!

This is the only legal way a farang can own land here and have free, clear, marketable title in their name.

[GMeel]

Hypothetical questions ( I know I know) on a 30 years lease-contract with 1or 2 renewal options...... Lets assume somebody bought a house for 12 mil THB (7 mil for the house (freehold agreement) & 5 million for the plot of land (lease agreement) on which the house is built.

After the (1st) lease of 30 years expires and assuming the owner of the land agrees to renew the lease for another 30 years, what registration fee needs to be paid at the land office and based on what price? Who determines that price? Example, that plot might be worth tenfold in 30 years

Also, what happens in theory after the 2nd or 3rd 30 year lease has expired? Can the owner say "take" your house and get of my land, despite the fact that you can own a villa/house in freehold on leased land? What happens in that case?

[Thereisnoif]

Hypothetical questions ( I know I know) on a 30 years lease-contract with 1or 2 renewal options...... Lets assume somebody bought a house for 12 mil THB (7 mil for the house (freehold agreement) & 5 million for the plot of land (lease agreement) on which the house is built.

After the (1st) lease of 30 years expires and assuming the owner of the land agrees to renew the lease for another 30 years, what registration fee needs to be paid at the land office and based on what price? Who determines that price? Example, that plot might be worth tenfold in 30 years

Also, what happens in theory after the 2nd or 3rd 30 year lease has expired? Can the owner say "take" your house and get of my land, despite the fact that you can own a villa/house in freehold on leased land? What happens in that case?

Hypothetical questions ( I know I know) on a 30 years lease-contract with 1or 2 renewal options...... Lets assume somebody bought a house for 12 mil THB (7 mil for the house (freehold agreement) & 5 million for the plot of land (lease agreement) on which the house is built.

After the (1st) lease of 30 years expires and assuming the owner of the land agrees to renew the lease for another 30 years, what registration fee needs to be paid at the land office and based on what price? Who determines that price? Example, that plot might be worth tenfold in 30 years

Also, what happens in theory after the 2nd or 3rd 30 year lease has expired? Can the owner say "take" your house and get of my land, despite the fact that you can own a villa/house in freehold on leased land? What happens in that case?

Chances are you will get screwed .

[johnnyk]

Deleted, my mistake.

Edited May 5, 2013 by johnnyk

[Khun Jean]

Hypothetical questions ( I know I know) on a 30 years lease-contract with 1or 2 renewal options...... Lets assume somebody bought a house for 12 mil THB (7 mil for the house (freehold agreement) & 5 million for the plot of land (lease agreement) on which the house is built.

After the (1st) lease of 30 years expires and assuming the owner of the land agrees to renew the lease for another 30 years, what registration fee needs to be paid at the land office and based on what price? Who determines that price? Example, that plot might be worth tenfold in 30 years

The owner would use the current market price of the land and the house to establish a new price. If the house and land together is 12 million in about 30 years it would be valued at at least 30 million. So be prepared that in the first 30 years you save at least 1 million baht per year to be able to pay for the first renewal. That is if you can get that renewal enforced. If the owner died or transferred or sold the land the new owners are not bound by the renewals because they are not 'real rights' that transfer with the land. Only against the original owner you have a very small change you can get that renewal. A refusal can come in two forms. He could just say no. In that case you can start a legal procedure to keep that owner following the contract. Another way is that he asks for a very high price that you would no be able to pay. No legal ways to counter that are available. Maybe you can loan it.

Also, what happens in theory after the 2nd or 3rd 30 year lease has expired? Can the owner say "take" your house and get of my land, despite the fact that you can own a villa/house in freehold on leased land? What happens in that case?

The landowner says thank you very much, and then either sells it or moves in himself.

If the house is yours you would be in your rights to take it with you or move it somewhere else even demolish it if that is you wish. Make sure you remove the rubble.

Edited May 6, 2013 by Khun Jean

[johnnyk]

Hypothetical questions ( I know I know) on a 30 years lease-contract with 1or 2 renewal options...... Lets assume somebody bought a house for 12 mil THB (7 mil for the house (freehold agreement) & 5 million for the plot of land (lease agreement) on which the house is built. After the (1st) lease of 30 years expires and assuming the owner of the land agrees to renew the lease for another 30 years, what registration fee needs to be paid at the land office and based on what price? Who determines that price? Example, that plot might be worth tenfold in 30 years

The owner would use the current market price of the land and the house to establish a new price. If the house and land together is 12 million in about 30 years it would be valued at at least 30 million. So be prepared that in the first 30 years you save at least 1 million baht per year to be able to pay for the first renewal. That is if you can get that renewal enforced. If the owner died or transferred or sold the land the new owners are not bound by the renewals because they are not 'real rights' that transfer with the land. Only against the original owner you have a very small change you can get that renewal. A refusal can come in two forms. He could just say no. In that case you can start a legal procedure to keep that owner following the contract. Another way is that he asks for a very high price that you would no be able to pay. No legal ways to counter that are available. Maybe you can loan it.

Also, what happens in theory after the 2nd or 3rd 30 year lease has expired? Can the owner say "take" your house and get of my land, despite the fact that you can own a villa/house in freehold on leased land? What happens in that case?

The landowner says thank you very much, and then either sells it or moves in himself.If the house is yours you would be in your rights to take it with you or move it somewhere else even demolish it if that is you wish. Make sure you remove the rubble.

I believe he is supposed to get some compensation for the building but like many things in Thailand it only looks good on the surface. The landowner could offer 50 baht for the house and say, "Sue me!" which is another nightmare, perhaps coming when the house owner is 80 years old. By all means remove the rubble or pay falang price for the landowner to do it! Most new-build Thai houses will be ready for the wrecking ball after 30 years anyway, so maybe best to go directly to the airport.

[GMeel]

Hypothetical questions ( I know I know) on a 30 years lease-contract with 1or 2 renewal options...... Lets assume somebody bought a house for 12 mil THB (7 mil for the house (freehold agreement) & 5 million for the plot of land (lease agreement) on which the house is built.

After the (1st) lease of 30 years expires and assuming the owner of the land agrees to renew the lease for another 30 years, what registration fee needs to be paid at the land office and based on what price? Who determines that price? Example, that plot might be worth tenfold in 30 years

The owner would use the current market price of the land and the house to establish a new price. If the house and land together is 12 million in about 30 years it would be valued at at least 30 million. So be prepared that in the first 30 years you save at least 1 million baht per year to be able to pay for the first renewal. That is if you can get that renewal enforced. If the owner died or transferred or sold the land the new owners are not bound by the renewals because they are not 'real rights' that transfer with the land. Only against the original owner you have a very small change you can get that renewal. A refusal can come in two forms. He could just say no. In that case you can start a legal procedure to keep that owner following the contract. Another way is that he asks for a very high price that you would no be able to pay. No legal ways to counter that are available. Maybe you can loan it.

>>Also, what happens in theory after the 2nd or 3rd 30 year lease has expired? Can the owner say "take" your house and get of my land, despite the fact that you can own a villa/house in freehold on leased land? What happens in that case?

The landowner says thank you very much, and then either sells it or moves in himself.

If the house is yours you would be in your rights to take it with you or move it somewhere else even demolish it if that is you wish. Make sure you remove the rubble.

Now now now, although you are probably technically & legally correct in what you are saying I do not believe for one minute this will be happening with all these foreign buyers in Samui, Phuket, Hua Hin etc. who bought a 30 years lease with renewal options (30+30). I know these renewals are not legally binding, but that is why I said assuming the owner will agree to honor the renewals. If what you are saying will becoming the norm the whole property & real estate business will collapse in Thailand, something the government does not really want to see happening. So I try again:

Firstly, somebody owns a villa in Phuket for 7 mil in FREEHOLD, registered with the land office on a LEASED plot of land, registered for 30 years. He paid 5 mil for the land and the " lease contract" says including two renewal options. As the first 30 year runs out, the 2nd 30 year needs to be registered at the land office for which a fee needs to be paid. How much will that be? 1.1% ( or higher by then) of the NEW estimated value of the land? To say all these people needs to come up again with millions of THB to secure the 2nd 30 years it a bit ludicrous. Of course in theory this would be possible but again I guess the government will not allow to destroy the real estate business in Thailand. Secondly, as the 90 years have run out, and assuming the building still stands, and assuming the owner could say get of my land and take your house with you, it is likely to assume a renegotiation process about a new lease needs to be conducted as per a new future law. This is of course a wild guess.

I rest my case, serious answers welcome :-)

Edited May 7, 2013 by GMail

[johnnyk]

The nut is simply that an "extension" is not a real right, as said previously. It is an agreement between two individuals and if one original signer dies then its null.

On a 30+30+30, aside from the above, who is going to be around for the 2nd and 3rd 30 years to register it at the Land Office?

If someone is naive enough to sign such a thing then they should include the financial terms of the "extension" otherwise the landowner will want market value when the time comes. Even then, nothing is guaranteed. In effect, the land is rented but unlike in many countries where it can be paid monthly, the whole 30 years is paid lump sum and the landowner would be foolish if he didn't try to maximize his return. He can also "sell" the land to his nephew at any time effectively tossing out the 2nd 30 years ("not binding on heirs and/or successors").

People would be well-advised IMO to banish notions of 30+30 year leases, its a fool's paradise. By all means sign a 30-year lease if you are comfortable with the terms but don't fantasize that any "extension" signed now will be valid or enforceable in 2043. Stuff happens, land gets sold, people die and so on. If we could predict the future we'd all be rich.

Edited May 7, 2013 by johnnyk

[GMeel]

The nut is simply that an "extension" is not a real right, as said previously. It is an agreement between two individuals and if one original signer dies then its null.

On a 30+30+30, aside from the above, who is going to be around for the 2nd and 3rd 30 years to register it at the Land Office?

If someone is naive enough to sign such a thing then they should include the financial terms of the "extension" otherwise the landowner will want market value when the time comes. Even then, nothing is guaranteed. In effect, the land is rented but unlike in many countries where it can be paid monthly, the whole 30 years is paid lump sum and the landowner would be foolish if he didn't try to maximize his return. He can also "sell" the land to his nephew at any time effectively tossing out the 2nd 30 years ("not binding on heirs and/or successors").

People would be well-advised IMO to banish notions of 30+30 year leases, its a fool's paradise. By all means sign a 30-year lease if you are comfortable with the terms but don't fantasize that any "extension" signed now will be valid or enforceable in 2043. Stuff happens, land gets sold, people die and so on. If we could predict the future we'd all be rich.

Again, you are not answering the questions and only paint a dooms scenario that ALLLL these people who signed these Lease Agreements in the last 10-15 years, even with reputable companies are going to get screwed and have to come up with millions and millions of THB to get a renewal. This would mean sudden death of the Real Estate industry in Thailand and that is what you are predicting.

What I am saying is that these renewal options of these leases IMO will be honored in 95% of all cases. These agreements, all be it some are toilet paper, will likely hold up in court if challenged. In most cases the contracts mention the person(s) who inherits the land is bound by the same (yes , I know it is not enforceable).

For example, somebody that entered into a Laguna Phuket 30+(30+30+30) year lease (yes they pitch 120 years), are told in 30 years to pay millions again for another 30 years? I am sure the (toilet paper) contract will say differently. And do you really think, if Laguna Phuket gets sold the new owner will say screw you all, I will not honor these agreements? That is what you are saying because in theory it would be possible.

I say OF COURSE they will be honored and people will pay a fee at the land offices of lets say 1.1% (if still the same) of the NEW estimated value of the land which will be well below selling price at the time.

Edited May 8, 2013 by GMail

[candypants]

what's the advantage of leasing for 30 years? You give back with a house or whatever you built on it and all the appreciation.

the advantage to leasing for 30 years is that no lesser period is binding or registered against the title Edited May 8, 2013 by candypants

[johnnyk]

The nut is simply that an "extension" is not a real right, as said previously. It is an agreement between two individuals and if one original signer dies then its null.

On a 30+30+30, aside from the above, who is going to be around for the 2nd and 3rd 30 years to register it at the Land Office?

If someone is naive enough to sign such a thing then they should include the financial terms of the "extension" otherwise the landowner will want market value when the time comes. Even then, nothing is guaranteed. In effect, the land is rented but unlike in many countries where it can be paid monthly, the whole 30 years is paid lump sum and the landowner would be foolish if he didn't try to maximize his return. He can also "sell" the land to his nephew at any time effectively tossing out the 2nd 30 years ("not binding on heirs and/or successors").

People would be well-advised IMO to banish notions of 30+30 year leases, its a fool's paradise. By all means sign a 30-year lease if you are comfortable with the terms but don't fantasize that any "extension" signed now will be valid or enforceable in 2043. Stuff happens, land gets sold, people die and so on. If we could predict the future we'd all be rich.

Again, you are not answering the questions and only paint a dooms scenario that ALLLL these people who signed these Lease Agreements in the last 10-15 years, even with reputable companies are going to get screwed and have to come up with millions and millions of THB to get a renewal. This would mean sudden death of the Real Estate industry in Thailand and that is what you are predicting.

What I am saying is that these renewal options of these leases IMO will be honored in 95% of all cases. These agreements, all be it some are toilet paper, will likely hold up in court if challenged. In most cases the contracts mention the person(s) who inherits the land is bound by the same (yes , I know it is not enforceable).

For example, somebody that entered into a Laguna Phuket 30+(30+30+30) year lease (yes they pitch 120 years), are told in 30 years to pay millions again for another 30 years? I am sure the (toilet paper) contract will say differently. And do you really think, if Laguna Phuket gets sold the new owner will say screw you all, I will not honor these agreements? That is what you are saying because in theory it would be possible.

I say OF COURSE they will be honored and people will pay a fee at the land offices of lets say 1.1% (if still the same) of the NEW estimated value of the land which will be well below selling price at the time.

Aside from your predictions based on nothing more than hope you are putting words in my mouth. First, there would be nothing on the chanote other than the initial 30yr lease. Second, look back at what I and others have said: the initial lease is binding on heirs and successors to honour the term to completion. Look it up. If the land is sold or the landowner dies any other contract is kaput, see "real right". Third, I predicted nothing. My comments are based on my experience and that of a dozen others that I know.

Perhaps you fell for a bogus 30+30+30? If so then I understand your wishful thinking as you contemplate the hole you could fall into.

Edited May 8, 2013 by johnnyk

[GMeel]

The nut is simply that an "extension" is not a real right, as said previously. It is an agreement between two individuals and if one original signer dies then its null.

On a 30+30+30, aside from the above, who is going to be around for the 2nd and 3rd 30 years to register it at the Land Office?

If someone is naive enough to sign such a thing then they should include the financial terms of the "extension" otherwise the landowner will want market value when the time comes. Even then, nothing is guaranteed. In effect, the land is rented but unlike in many countries where it can be paid monthly, the whole 30 years is paid lump sum and the landowner would be foolish if he didn't try to maximize his return. He can also "sell" the land to his nephew at any time effectively tossing out the 2nd 30 years ("not binding on heirs and/or successors").

People would be well-advised IMO to banish notions of 30+30 year leases, its a fool's paradise. By all means sign a 30-year lease if you are comfortable with the terms but don't fantasize that any "extension" signed now will be valid or enforceable in 2043. Stuff happens, land gets sold, people die and so on. If we could predict the future we'd all be rich.

Again, you are not answering the questions and only paint a dooms scenario that ALLLL these people who signed these Lease Agreements in the last 10-15 years, even with reputable companies are going to get screwed and have to come up with millions and millions of THB to get a renewal. This would mean sudden death of the Real Estate industry in Thailand and that is what you are predicting.

What I am saying is that these renewal options of these leases IMO will be honored in 95% of all cases. These agreements, all be it some are toilet paper, will likely hold up in court if challenged. In most cases the contracts mention the person(s) who inherits the land is bound by the same (yes , I know it is not enforceable).

For example, somebody that entered into a Laguna Phuket 30+(30+30+30) year lease (yes they pitch 120 years), are told in 30 years to pay millions again for another 30 years? I am sure the (toilet paper) contract will say differently. And do you really think, if Laguna Phuket gets sold the new owner will say screw you all, I will not honor these agreements? That is what you are saying because in theory it would be possible.

I say OF COURSE they will be honored and people will pay a fee at the land offices of lets say 1.1% (if still the same) of the NEW estimated value of the land which will be well below selling price at the time.

Aside from your predictions based on nothing more than hope you are putting words in my mouth. First, there would be nothing on the chanote other than the initial 30yr lease. Second, look back at what I and others have said: the initial lease is binding on heirs and successors to honour the term to completion. Look it up. If the land is sold or the landowner dies any other contract is kaput, see "real right". Third, I predicted nothing. My comments are based on my experience and that of a dozen others that I know.

Perhaps you fell for a bogus 30+30+30? If so then I understand your wishful thinking as you contemplate the hole you could fall into.

Again, if what you are saying will become the norm and all these lease agreements drawn up by Thai lawyers including renewal options are just worthless pieces of paper and unenforceable, then, although I admit that you are technically & legally correct at this moment in time, you ARE predicting a dooms scenario which will wreck and cripple the Real Estate business in Thailand. That will not happen for sure! It seems more like you may have been the victim of some sort of Lease Scam in the past since you want the 30+30 to be banished. Time will tell if all these Thai companies that sold these 30+30 leases will say screw you once the renewals will start to happen.... Good luck!

Edited May 8, 2013 by GMail

[taninthai]

Selling land and houses on 30 or 30 + 30 year leases is one of the best businesses I can see in Thailand ,I keep telling the wife and her family to get involved in it,it's mostly old ferang that take these leases you'd be crazy to take one say aged 40,so there is a good chance the ferang will die before the first 30 years and if he doesn't you simply transfer the land to your brother/sister and reclaim the land and house after 30 years.

It's amazing you get your land and house back to sell again which will have quadroupled in value any landowner would have to be a complete idiot to honour a second thirty year lease unless the ferang is gonna pay big mOney.

[rayongchelsea]

No one will honor or needs to honor anything after 30 years. Renewals maybe possible and for those quoted above probable..but in the leases I have seen the renewal is just a clause..not based on any legal fact..no real mention of the cost of renewal..its more just an intent...but you have to be realistic..it is in terms of the law only 30 years..

I am helping a foreigner at the moment who unfortunately didn't even know the 30 year lease had to be registered..and it wasn't...no copy of the chanote...people can be very trusting....

[johnnyk]

The nut is simply that an "extension" is not a real right, as said previously. It is an agreement between two individuals and if one original signer dies then its null.

On a 30+30+30, aside from the above, who is going to be around for the 2nd and 3rd 30 years to register it at the Land Office?

If someone is naive enough to sign such a thing then they should include the financial terms of the "extension" otherwise the landowner will want market value when the time comes. Even then, nothing is guaranteed. In effect, the land is rented but unlike in many countries where it can be paid monthly, the whole 30 years is paid lump sum and the landowner would be foolish if he didn't try to maximize his return. He can also "sell" the land to his nephew at any time effectively tossing out the 2nd 30 years ("not binding on heirs and/or successors").

People would be well-advised IMO to banish notions of 30+30 year leases, its a fool's paradise. By all means sign a 30-year lease if you are comfortable with the terms but don't fantasize that any "extension" signed now will be valid or enforceable in 2043. Stuff happens, land gets sold, people die and so on. If we could predict the future we'd all be rich.

Again, you are not answering the questions and only paint a dooms scenario that ALLLL these people who signed these Lease Agreements in the last 10-15 years, even with reputable companies are going to get screwed and have to come up with millions and millions of THB to get a renewal. This would mean sudden death of the Real Estate industry in Thailand and that is what you are predicting.

What I am saying is that these renewal options of these leases IMO will be honored in 95% of all cases. These agreements, all be it some are toilet paper, will likely hold up in court if challenged. In most cases the contracts mention the person(s) who inherits the land is bound by the same (yes , I know it is not enforceable).

For example, somebody that entered into a Laguna Phuket 30+(30+30+30) year lease (yes they pitch 120 years), are told in 30 years to pay millions again for another 30 years? I am sure the (toilet paper) contract will say differently. And do you really think, if Laguna Phuket gets sold the new owner will say screw you all, I will not honor these agreements? That is what you are saying because in theory it would be possible.

I say OF COURSE they will be honored and people will pay a fee at the land offices of lets say 1.1% (if still the same) of the NEW estimated value of the land which will be well below selling price at the time.

Aside from your predictions based on nothing more than hope you are putting words in my mouth. First, there would be nothing on the chanote other than the initial 30yr lease. Second, look back at what I and others have said: the initial lease is binding on heirs and successors to honour the term to completion. Look it up. If the land is sold or the landowner dies any other contract is kaput, see "real right". Third, I predicted nothing. My comments are based on my experience and that of a dozen others that I know.

Perhaps you fell for a bogus 30+30+30? If so then I understand your wishful thinking as you contemplate the hole you could fall into.

Again, if what you are saying will become the norm and all these lease agreements drawn up by Thai lawyers including renewal options are just worthless pieces of paper and unenforceable, then, although I admit that you are technically & legally correct at this moment in time, you ARE predicting a dooms scenario which will wreck and cripple the Real Estate business in Thailand. That will not happen for sure! It seems more like you may have been the victim of some sort of Lease Scam in the past since you want the 30+30 to be banished. Time will tell if all these Thai companies that sold these 30+30 leases will say screw you once the renewals will start to happen.... Good luck!

Nonsense. I have no interest in 30+30+30. Why would I want it banished? Caveat emptor. Saying the Thai real estate sector will collapse is ridiculous, take a hit yes. Lots of falangs overestimate their importance to the Thai economy.

I did my due diligence on leases when I was offered 30+30+30 and did not go that route for all the reasons previously posted by others and myself. I opted for company ownership as the lesser of two evils, so to speak.

Thank you for saying I am "technically and legally correct". In what relevant way would you be correct then? Technically and legally correct is good enough enough to base a decision on IMO, fantasy and wishful thinking less so.

BTW, many lawyers, especially in Thailand, will be happy to draw up papers that will make the customer happy. As long as they get paid they could care less about some deluded falang's problem 29 years down the road.

Edited May 8, 2013 by johnnyk

[GMeel]

Re:

Why you want it banished? I don't know but that is the word you used. It looks to me that you are the one that should be worried, and this goes for all the people who own land through a Thai Company with probably bogus Thai shareholders to circumvent the Thai law about foreign ownership. That is IMO the policy that should be banished. People are ill advised to travel that route and could lose it all. Leasing is by far the most secure way and perfectly within the law.

OK, the renewals are a indeed questionable if you made a dodge deal with some dodge farmer and will very likely not be honored, but as mentioned if you buy from a reputable company like Laguna for example I think you should not be worried about the renewal. I think it will be highly unlikely they will say screw you! Anyway, this discussion is one without an end so I retreat for now......and I suppose we will get the answers when the first renewals are to take place or are being denied. Good luck!

Edited May 9, 2013 by GMail

[johnnyk]

Gmail, my last words. Again, you put words in my mouth to try and set up a straw man argument. I did not say I want 30+30+30 banished. Go back and read the post, I said IMO people would be well-advised to banish notions of such "leases. Why? Because they are bogus and and are contrived only to encourage the gullible to sign what they are led to believe will give them 90 years.

If you want to have a discussion that's fine but don't try to claim something was said that wasn't, it makes you look foolish and you come off looking like someone who doesn't know what he is talking about. Cribbing from Laguna Phuket brochures without knowing the facts doesn't add much credence to what you say.

If you signed such a "lease" good luck to you downthe road.

[tuktukmike]

I am also curious as to the developers role in these lease or glorified rent up front agreements, it seems for some that a developer can as holder of the land go out and gain loans from thai banks using the land as collateral.

If this is the case we could be seeing the next big scam here.

Any thoughts anyone.

[johnnyk]

I am also curious as to the developers role in these lease or glorified rent up front agreements, it seems for some that a developer can as holder of the land go out and gain loans from thai banks using the land as collateral.

If this is the case we could be seeing the next big scam here.

Any thoughts anyone.

More than a few have been doing that for a long time. They are adept at playing both ends to the middle. Developers promise this stuff to get the signature down on paper. What happens 30 years later doesn't bother them.

[tuktukmike]

Yeah nyk I know what your saying but on on another forum shall we say it seems the developer has raised bank loans through homes he sold on a development.

For me this sort of raises a red flag with the so called 30 year lease (rent), as the land owner am I right in thinking that any holder of the land title can raise loans on security of the land.

If so then they are sort of getting double their money and leaving the house owner in a perilous position.

I get the feeling that this may be the next big scam to hit.

Ttm.

[johnnyk]

Yeah nyk I know what your saying but on on another forum shall we say it seems the developer has raised bank loans through homes he sold on a development.

For me this sort of raises a red flag with the so called 30 year lease (rent), as the land owner am I right in thinking that any holder of the land title can raise loans on security of the land.

If so then they are sort of getting double their money and leaving the house owner in a perilous position.

I get the feeling that this may be the next big scam to hit.

Ttm.

Land can be the gift that keeps on giving for Thai landowners. Collect 2 million or more upfront cash for a 30yr lease. Then he or his family can do it again for even more money as the land appreciates over time, every 30 years the family can enjoy a bucket of free money for doing absolutely zilch. Thais like land and gold not paper. Who says they are stoopid?

I have heard of developers making separate chanotes for the roads and infrastructure in developments, a powerful hammer against pesky residents and usable as collateral also.

Edited May 12, 2013 by johnnyk

[Khun Jean]

I like to know where this 1.1% for a renewal comes from?

Some kind of brochure or sales pitch from some company.

Please name them.

[tuktukmike]

I asked the question about 30 year leases and developers taking out loans on the house and land.

The reason I asked is that it would seem that a developer down here in sweet little hua hin has done just that according to a local forum.

A poster has said that on their development of 12 houses the developer has taken out loans with a bank using the property's or land as collateral, the developer has failed to keep up payments to the bank and it seems the residents are going to lose their homes. Crazy.

Why are people so stupid to pay 100% for a 30 year lease (rent), in the uk you would expect a 99 year lease.

Ttm