Starting new house

[bigbamboo]

Well my friend, you have had some good advice from seasoned experienced farangs here and i think you should come back to Thai Visa every step of the way.

Good luck in the future.

Most farangs here aren't so much seasoned as pickled.

[khunPer]

Yes, I am familiar with usufruct as one option. She only advised me against this option because of the risks but really, I'm free to pursue that if I choose.

What I am thinking more about is a usufruct with a Thai friend who lives in Canada. She owns property here and is willing to consider a trade whereby she owns the Thai land and I own the Canadian land and we have a usufruct for each other. The land values are very close to each other. She said she would do this for me as she knew my circumstances with my divorce and feels I was treated unjustly and wants to help set things right.

This way we are both protected as we each own the other person's land and I have the Canadian security in place to protect me at lease renewal. The Canadian lawyer said no problem for this arrangement and about $1500 to draw up.

I have no idea about foreigners practicing law in Thailand but the firm I went to http://www.siam-legal.com/ had quite a number of non Thai staff. The lawyer I used was definitely a licensed lawyer according to her business card.

Foreign lawyers normally co-operate or partner with Thai lawyers, who can perform work in the Court. The benefit of using a foreign lawyer is, that you have one who understand the foreigner’s situation and also know the Thai law.

As foreigner, you can own a house, but not the land. When you buy a second hand house, you can have the ownership registered, but when you build a new house, you have to make sure, that your name is on the drawings and building permission, and furthermore keep all bills and receipts, major construction documents of course issued with your name, as proof of ownership. If you get a yellow House Book for foreigners, you may be able to have stated something like “Master of House” with your name, which is your only documentation of ownership for a new build house.

The land may be a usufruct – the suggestion you mention with the Canadian land, as security sounds as a reasonable arrangement.

Another possibility is lease, where legal maximum is 30 years. Any lease over three years shall be registered at the Land Department – kind of servitude on the land deed – and a small tax paid (think it is around 1% of the total 30-year lease value), to become legal. You can make a contract of 30 years optional lease, including agreed fees, after the first 30-year period. Such a contract will be considered as a legal agreement, if later taken to Court in case of breach (according to my lawyers, partnership Foreign & Thai).

The third possibility is through a limited company. Many use that model, but it may be complicated. Foreigners can maximum own 49% of a Thai company, less in some cases with landownership. You need minimum three shareholders. Before many used so-called Thai nominees, but today they have to proof their funds for the shares. Another method is preferred shared, so the foreigners holds some Class A shares with 10 votes each, whilst the Thais own Class B shares with one vote each. An important issue is, when using a limited company, that the company has (some) other activities than owing a plot of land leased out to one shareholder. Laws change (all the time, some lawyers says), which may make the limited company set up questionable, if there are no other activities in the company. However, it seems like the authorities mainly is interested in larger set-ups than small private estates.

You will find many arguments for and against the different ways to organize land and house. What is good for one may not be the right set-up for another. A well-experienced lawyer in the field may be able to give you the best advise – however, some says, that many lawyers are not that experienced in usufruct agreements.

You mentioned sales value in one of your posts. When selling, you can sell the house – as you own the house – and the land arrangement may be separate. A house on a leased plot may have a value compared to the remaining lease period, and/or signed agreement for prolongation. However, a usufruct agreement is for life, so I do not think, that can be transferred – meaning the house value may be questionable. When using the limited company method, the land can be sold to a Thai or another limited company – however, some sells the whole company.

An important remark is, that every time you transfer money to pay the constructer, you shall have a document from your bank sent to the National Bank for approval, stating that the transfer is for building or buying a house. Each transfer must be of minimum 20.000 USD or equivalent value in other currency (check with your bank, if the amount has changed). Keep the documents, when you get them signed and stamped back. The documents allow you to transfer the same amount out of Thailand, if or when you sell the house. Some selling a house to a foreigner insist on having the payment transferred to an offshore account, which may be another possibility. You can separate house and land, when sold.

Just some remarks, from another alien, who have been through the process with obtaining land and building his dream house.

[Tmymaimee]

Thank you so much for all your advice. I never received a stamped copy of the transfer because it was done online but the builder keeps receipts for all funds received. I feel the main issue is whether you can trust the developer and builder. My personal feelings are if a developer has a proven track record of building high quality, beautiful homes for a fair price, why would he suddenly try and screw over a buyer when he still has additional lots to sell and develop? He's had money on deposit for 2 years now and could have walked away with a lot of money if he chose to. He also lives in the same housing estate as where he's building which gives me a lot of confidence.

My brother bought a brand new home in Canada with a full warranty yet there were several problems; mainly due to subcontractors trying to work as cheap as possible and trying to rip off the developer so its not only Thailand this crap goes on.

The reason I would commit so much money to land I can never own is because I think eventually the law will change to allow foreigners to own smaller land parcels. Whether it would happen in the next 30 years I don't know but hopefully as the Thai economy moves forward, the perceptions of land ownership will change.

[Loptr]

Good luck to you , you will a heart of steel with what you are about to endure.

Sorry, what am I about to endure? Did you have a lot of problems when you had your house built?

It appears you know a thing or three about Thailand, having been married and divorced from a Thai lady.

One cardinal rule about Thailand, or any other developing country, is to not invest any more than you are comfortable walking away from should the circumstances dictate.

Not sure what legal firm you are using, but it appears from your posts that they are advising a means to circumvent the "spirit of the law" with respect to land ownership.

My only advice is to get a 2nd and possibly a 3rd opinion. If not, you may be in for a nasty surprise after the money has been spent and you have zero recourse.

[Maestro]

Whereustay, after reading all your posts in this topic I would like to ask you if I understand correctly that

1. At present the land on which your house is to be built is registered in the name of the natural or juristic person to whom you have referred as "the developer"
2. At present you have neither a lease nor a usufruct granting you the right of exclusive use, for a defined period, of the parcel of land on which your house is to be built
3. "The developer" is the same person to whom you have referred as "the builder" of your house
4. You have already transferred some money from Canada to the Thai bank account of the developer/builder as partial or full payment for the construction of your house

[oldsailor35]

At the moment I am open to any ideas on the most secure arrangement for "usage" of the land. The developer currently owns the land and will give me title after the house is complete as I am making payments as he progresses.

One of the biggest problems I have is my lawyer says she can advise me on the law but then says the actual interpretation in a courtroom can differ should problems arise later on. She also says civil proceedings can draw out for a long time so make sure everything is clear heading in. She will not even contemplate a Thai partner to own the land with a leaseback because of possible issues on the lease renewal.

All my friends rent around Bangkok so they can leave without any complications. I started this house idea with my ex wife and there was never an issue as she would own the land in her name. We never contemplated divorce and now I'm on my own as far as continuing with this property. Title to the land is still with the developer / builder.

Probably was a good idea on your part to post on TV.

You really need to sort this issue out right now as to who owns the land and how it is going to be transferred to your name. I would seriously question your lawyer on this and don't proceed any further until she shows you what she means by her statements.

Or get another lawyer

[oldsailor35]

The lawyer is not Thai, she is falang and works at a very high end, international law firm in Bangkok. She is just saying there is the law and then the Thai factor which can skew the judgement.

If you put the land in a Thai person's name and then lease it, would it not decrease the value of the house if you chose to sell it? Also, what if the Thai land owner doesn't agree to sell the land concurrently with the house?

I never had any concerns when I started this as I just assumed like most people that the land would go in my wife's name.

Foreigners can't practice law in Thailand can they ?

I think they can.

[oldsailor35]

The lawyer is not Thai, she is falang and works at a very high end, international law firm in Bangkok. She is just saying there is the law and then the Thai factor which can skew the judgement.

If you put the land in a Thai person's name and then lease it, would it not decrease the value of the house if you chose to sell it? Also, what if the Thai land owner doesn't agree to sell the land concurrently with the house?

I never had any concerns when I started this as I just assumed like most people that the land would go in my wife's name.

Foreigners can't practice law in Thailand can they ?

Yes, they can but I believe they have to be represented by Thai colleagues if a court appearance is required.

A foreign lawyer cannot represent his/her client in court. However, he/she can perform legal advisory services if he/she has obtained a work permit for the advisory services.

Full licensing

A foreign lawyer cannot obtain a full licence to practise law in this jurisdiction. The relevant impediment is: According to the Lawyers Act VE 2528 (AD 1985), section 35, being a Thai national is one of the required qualifications for registration and obtaining the licence to become a lawyer.

So if a foreigner has Thai citizenship, he/her can practice law.. There used to be an Americian on Sukumvit 14 who was practicing Thai lawyer.

[Tmymaimee]

Whereustay, after reading all your posts in this topic I would like to ask you if I understand correctly that

1. At present the land on which your house is to be built is registered in the name of the natural or juristic person to whom you have referred as "the developer"
2. At present you have neither a lease nor a usufruct granting you the right of exclusive use, for a defined period, of the parcel of land on which your house is to be built
3. "The developer" is the same person to whom you have referred as "the builder" of your house
4. You have already transferred some money from Canada to the Thai bank account of the developer/builder as partial or full payment for the construction of your house

Yes to all of the above. I have a contract with payment terms outlined and a breakdown for the land and the house seperate. I did have the option to go with a fully completed house in the same housing estate but wanted significant enough changes that I chose the build option.

The developer has had many chances to steal depostits from any of the other home buyers over the years and all the owners I spoke with are very happy with their completed homes, so why would he single me out to steal my money or build a substandard home when he takes so much pride in his homes? When you walk around the estate, you are free to speak with any other homeowners and inspect the other homes under construction. I haven't seen any hidden scams and feel pretty comfortable with this guy. If someone is a thief, would they not take the opportunity to steal the first time? And why would he have not stolen my deposit rather than spend it on building supplies and start building?

The reason you can't buy the land until the house is complete is because the developer wants the homes all the same style and if you were to just buy the land, he would have no control over the design. Another concern is someone buys a large lot then builds a small home (which was my original intention). Even in my town, you get idiots that buy into a nice housing estate and then try to put up some little shack to sit on the land so I see his point.

Edited June 17, 2013 by Whereustay

[BradinAsia]

Thank you so much for all your advice. I never received a stamped copy of the transfer because it was done online but the builder keeps receipts for all funds received. I feel the main issue is whether you can trust the developer and builder. My personal feelings are if a developer has a proven track record of building high quality, beautiful homes for a fair price, why would he suddenly try and screw over a buyer when he still has additional lots to sell and develop? He's had money on deposit for 2 years now and could have walked away with a lot of money if he chose to. He also lives in the same housing estate as where he's building which gives me a lot of confidence.

My brother bought a brand new home in Canada with a full warranty yet there were several problems; mainly due to subcontractors trying to work as cheap as possible and trying to rip off the developer so its not only Thailand this crap goes on.

The reason I would commit so much money to land I can never own is because I think eventually the law will change to allow foreigners to own smaller land parcels. Whether it would happen in the next 30 years I don't know but hopefully as the Thai economy moves forward, the perceptions of land ownership will change.

You are investing your life saving on the hope that the Thai law on land ownership will

possibly change sometime in the future, maybe 30 years down the road. The reliability

of the contractor should be the least of your worries.

Your main concern should be that whatever is built, good quality or otherwise will likely

never belong to you. After you spend all your savings to build it, there's a real possibility,

I fear, that you may never even get to live in it.

Edited June 17, 2013 by BradinAsia

[louse1953]

At the moment I am open to any ideas on the most secure arrangement for "usage" of the land. The developer currently owns the land and will give me title after the house is complete as I am making payments as he progresses.

One of the biggest problems I have is my lawyer says she can advise me on the law but then says the actual interpretation in a courtroom can differ should problems arise later on. She also says civil proceedings can draw out for a long time so make sure everything is clear heading in. She will not even contemplate a Thai partner to own the land with a leaseback because of possible issues on the lease renewal.

All my friends rent around Bangkok so they can leave without any complications. I started this house idea with my ex wife and there was never an issue as she would own the land in her name. We never contemplated divorce and now I'm on my own as far as continuing with this property. Title to the land is still with the developer / builder.

Probably was a good idea on your part to post on TV.

You really need to sort this issue out right now as to who owns the land and how it is going to be transferred to your name. I would seriously question your lawyer on this and don't proceed any further until she shows you what she means by her statements.

Stop,its a con.

[louse1953]

Good to to see you are doing it right the Thai way having blessing for the first post. Foreigners who forget that, may often have problems with their new house

Wish you good luck with your new house and life, welcome to LoS

We all go through that rigmarole mate,to keep the peace.The rest of it,he'll have probs all right.

[Rice60640]

Whereustay...

In your original post you said you've been saving for years to realize your dream.

That's very commendable, everyone can understand that.

But what nobody understands is why you'd come here and commit a considerable

amount of your hard-earned savings to start building a house on land which you can

never own.

I'm not a negative person, but what you are doing frankly boggles the mind.

All we can do is hope and pray that you quickly learn your huge error and stop all

this before you have lost everything.

I don't understand all these frenzy about the need to own the land and the house. Why do you need to "own" as long as you lease the land (30 year land lease from the government -- is the house included in the land lease or do you actually own the house on which the leased land sits?) to build the house and has the option to "sell" that house and land to another person after you've stayed a few years and got tired of it. What's the issue?

[rayongchelsea]

Because if he is only leasing he is probably paying over the odds.

[timewilltell]

Yes, I am familiar with usufruct as one option. She only advised me against this option because of the risks but really, I'm free to pursue that if I choose.

What I am thinking more about is a usufruct with a Thai friend who lives in Canada. She owns property here and is willing to consider a trade whereby she owns the Thai land and I own the Canadian land and we have a usufruct for each other. The land values are very close to each other. She said she would do this for me as she knew my circumstances with my divorce and feels I was treated unjustly and wants to help set things right.

This way we are both protected as we each own the other person's land and I have the Canadian security in place to protect me at lease renewal. The Canadian lawyer said no problem for this arrangement and about $1500 to draw up.

I have no idea about foreigners practicing law in Thailand but the firm I went to http://www.siam-legal.com/ had quite a number of non Thai staff. The lawyer I used was definitely a licensed lawyer according to her business card.

I have considerable experience in this area. This is the best solution for you because as your lawyer has told you, the Thais are great at reinterpreting law and you really do not want to get into any court proceedings here. If you can do the trade swap and understand the issues of currency variations etc., I am sure you can get the Canadian Lawyer to sort it out. The Thai lawyers are not to be trusted, are pretty poor on the whole - and that applies to the the big International lawyers as much as the smaller guys. So getting your Canadian lawyer to build in the protections for you two and sidelining the Thais as much as possible would be great. Well done.

[BradinAsia]

Yes, I am familiar with usufruct as one option. She only advised me against this option because of the risks but really, I'm free to pursue that if I choose.

What I am thinking more about is a usufruct with a Thai friend who lives in Canada. She owns property here and is willing to consider a trade whereby she owns the Thai land and I own the Canadian land and we have a usufruct for each other. The land values are very close to each other. She said she would do this for me as she knew my circumstances with my divorce and feels I was treated unjustly and wants to help set things right.

This way we are both protected as we each own the other person's land and I have the Canadian security in place to protect me at lease renewal. The Canadian lawyer said no problem for this arrangement and about $1500 to draw up.

I have no idea about foreigners practicing law in Thailand but the firm I went to http://www.siam-legal.com/ had quite a number of non Thai staff. The lawyer I used was definitely a licensed lawyer according to her business card.

I have considerable experience in this area. This is the best solution for you because as your lawyer has told you, the Thais are great at reinterpreting law and you really do not want to get into any court proceedings here. If you can do the trade swap and understand the issues of currency variations etc., I am sure you can get the Canadian Lawyer to sort it out. The Thai lawyers are not to be trusted, are pretty poor on the whole - and that applies to the the big International lawyers as much as the smaller guys. So getting your Canadian lawyer to build in the protections for you two and sidelining the Thais as much as possible would be great. Well done.

Considerable experience in gobbledegook maybe.

[boosta]

Yes, I am familiar with usufruct as one option. She only advised me against this option because of the risks but really, I'm free to pursue that if I choose.

What I am thinking more about is a usufruct with a Thai friend who lives in Canada. She owns property here and is willing to consider a trade whereby she owns the Thai land and I own the Canadian land and we have a usufruct for each other. The land values are very close to each other. She said she would do this for me as she knew my circumstances with my divorce and feels I was treated unjustly and wants to help set things right.

This way we are both protected as we each own the other person's land and I have the Canadian security in place to protect me at lease renewal. The Canadian lawyer said no problem for this arrangement and about $1500 to draw up.

I have no idea about foreigners practicing law in Thailand but the firm I went to http://www.siam-legal.com/ had quite a number of non Thai staff. The lawyer I used was definitely a licensed lawyer according to her business card.

-

In order of priority first the land ownership issue.

If you can really trust your Canadian-based Thai citizen then that would be an ideal situation, let the Canadian lawyer take the lead on that side for all the contracts between you and her, and then have the Thai side confirm everything's in order, parallel contracts on this side to cover the situation that the Canadian Thai is back here and you need to enforce something if they turn out to be untrustworthy, otherwise it's just a Thai citizen buying Thai land and then leasing and/or usufruct your use of the land and your ownership of the house.

Next you seem to very clear on proceeding with this, but I'll add my voices to the "just rent, don't own" from a strictly financial POV but that's just me.

Last is the build quality issue, but again you seem confident that's all in hand, so all I can say is

Best of luck man, and let us know how it all turns out to help others later on!

[Khun Jean]

I would do it differently.

I would first settle the land.

A usufruct is the best and can be for your live. You are not married, perfect for this!

If you have children include them also so that the use of the land can be inherited by them.

You get this done at the land office for a few hundred baht cost.

The canadian-thai land usufruct swap is brilliant and should be done now.

The reason you need to do that first is that the house can be on your name 100%.

If the developer first builds the house and then sells you it as a package the house can not be separated from the land and you end up not owning the house but also under the usufruct.

Explain this to the developer and make it one of the conditions!

You already signed the contract for building the house so it should not be a problem.

YOU HAVE ONLY ONE SINGLE CHANCE TO DO THIS RIGHT, do it as quickly as possible. Jump on the plane and get here!

Another advice, drop this lawyer. Seriously!

Edited June 18, 2013 by Khun Jean

[Beetlejuice]

At the moment I am open to any ideas on the most secure arrangement for "usage" of the land. The developer currently owns the land and will give me title after the house is complete as I am making payments as he progresses.

One of the biggest problems I have is my lawyer says she can advise me on the law but then says the actual interpretation in a courtroom can differ should problems arise later on. She also says civil proceedings can draw out for a long time so make sure everything is clear heading in. She will not even contemplate a Thai partner to own the land with a leaseback because of possible issues on the lease renewal.

All my friends rent around Bangkok so they can leave without any complications. I started this house idea with my ex wife and there was never an issue as she would own the land in her name. We never contemplated divorce and now I'm on my own as far as continuing with this property. Title to the land is still with the developer / builder.

How can the developer give you the title?

Unless you are placing this real estate under a registered trading Thai company in which you own, than there is no way you can own the said house and land.

Sorry pal, but you are being scammed and I see a disaster here waiting to happen.

I suggest that you take some professional advice and do your own research into foreigner real estate ownership in Thailand.

[Khun Jean]

In Thailand there is no professional advice. (There are always exceptions.)

They have no liability and as such can do whatever they want.

The only one that makes decisions is you. Listen to advice then triple check it.

Advice from lawyers, should be checked even more because many times there is a conflict of interest and earning money is there first priority, you are at most second priority.

Lawyers being advised by developers should be completely ignored always. Standard procedure.

In our own countries we know or should know about the law. In Thailand it is no different, especially for foreigners.

Most developers are not out there to rip you off or scam you.

They are just not knowledgeable about what laws concern them and their customers.

Most just listen to someone else especially a lawyer friend and they just repeat it.

After all a lawyer must know what is within the law, right?

Edited June 18, 2013 by Khun Jean

[Puccini]

Wherustay, your plan of reciprocal usufructs -- make them for life -- looks perfectly legal and above board to me and you are in the fortunate position to implement it.

[Cloggie]

I hope you didn't invest all your money into this dream and do you have a plan 'B' - what if you loose all the money, can you start again?

[Thereisnoif]

You cannot legally own land in this country no matter what all the real estate pimps on this forum will tell you . Step 1.

Now feel free to move on to step 2 and build a house that you might own, on a piece of land that you never will own.

[innerspace]

You cannot legally own land in this country no matter what all the real estate pimps on this forum will tell you . Step 1.

Now feel free to move on to step 2 and build a house that you might own, on a piece of land that you never will own.

No matter what eh?

Im no real estate pimp...but I do know 100% that exceptions exist. Not certain if still open to new applicants but a BOI scheme allowed complete legal lifetime ownership of 1 rai of land to foreigners who invested 1 million usd here in approved funds.

Certain businesses CAN be 100% foreign owned AND own land.

Still agree with all advice in this thread. It is impossible to legally own property and guarantee that it will stay that way.

But it is not necessarily illegal...can be done just cant tell if laws will change for better or worse later on.

And most options open to the majority are semi legal or semi safe at best.

[Credaf]

Good luck. I would like to know how you get on as I am in the same position about relocating.

Sent from my GT-I9300 using Thaivisa Connect Thailand mobile app

[andres]

I suggest that you try to find the book "How To Buy Land and Build a house in Thailand" by Philip Bryce, ISBN 1-887521-71-2, there you will find the most answers on your questions. Good Luck!

[swissie]

Clearly the OP knows very little about real-estate-dealings in Thailand, despite of being married to a Thai-National before. He gets his house building project started and THEN asks for advice here!!!

How many books, TV shows etc. are floating around, warning of the pitfalls a Farang faces in Thailand. Half of the houses built by Farangs in Thailand would never have been built, if proper research would have been done BEFORE !

I find it especially disturbing, that some posters here are actually encouraging the OP to go ahead full blast (wishing him luck), knowing well that the OP has written on his forehead: VICTIM !

The only advice to the OP of any value at this point could only be: Put everything on hold, live here for 6 months on a rental basis. after that make your decision and not before.

If the OP decides against it, he will take his small loss, instead of a possible major loss later on, due to the fact that he doesn't know what exactly he is is getting into at the present.

Cheers.

[bangkokstick]

Don't forget that it is like when buying a boat, the first best day of your life is when you buy it and the second one is when you sell it...

I'm scare you feel a bit too happy and don't know the list of shxt that is coming about your house building, but I wish you the best anyway :-)

[RAZZELL]

Whereustay, after reading all your posts in this topic I would like to ask you if I understand correctly that

1. At present the land on which your house is to be built is registered in the name of the natural or juristic person to whom you have referred as "the developer"
2. At present you have neither a lease nor a usufruct granting you the right of exclusive use, for a defined period, of the parcel of land on which your house is to be built
3. "The developer" is the same person to whom you have referred as "the builder" of your house
4. You have already transferred some money from Canada to the Thai bank account of the developer/builder as partial or full payment for the construction of your house

Yes to all of the above. I have a contract with payment terms outlined and a breakdown for the land and the house seperate. I did have the option to go with a fully completed house in the same housing estate but wanted significant enough changes that I chose the build option.

The developer has had many chances to steal depostits from any of the other home buyers over the years and all the owners I spoke with are very happy with their completed homes, so why would he single me out to steal my money or build a substandard home when he takes so much pride in his homes? When you walk around the estate, you are free to speak with any other homeowners and inspect the other homes under construction. I haven't seen any hidden scams and feel pretty comfortable with this guy. If someone is a thief, would they not take the opportunity to steal the first time? And why would he have not stolen my deposit rather than spend it on building supplies and start building?

The reason you can't buy the land until the house is complete is because the developer wants the homes all the same style and if you were to just buy the land, he would have no control over the design. Another concern is someone buys a large lot then builds a small home (which was my original intention). Even in my town, you get idiots that buy into a nice housing estate and then try to put up some little shack to sit on the land so I see his point.

Name of the developer and estate?

Judging from neighbouring houses in your photos, the land and houses look pretty big and expensive!

RAZZ

Edited June 21, 2013 by RAZZELL

[bbradsby]

Well my friend, you have had some good advice from seasoned experienced farangs here and i think you should come back to Thai Visa every step of the way.

Good luck in the future.

Most farangs here aren't so much seasoned as pickled.

Thats a bit harsh - marinated is seasoning!