Land lease vs Superficies lease vs Usufruct Lease

[jbrain]

...that her face dropped when she realised that she would not be getting a piece of land as a present

You maybe saved yourself a fortune.....

I lost quite a few million baht over the past 12 years by listening to what my wives said to me. Nowadays (and happily divorced), I only care for one person => me

It's saved me a whole load of wasted time and wasted cash

Simon

But didn't you marry again with your ex wife's best friend, with who you build another 2 hotels ?

Are is that relation and money also history already ?

[simon43]

But didn't you marry again with your ex wife's best friend, with who you build another 2 hotels ?

No!!! Now I think you're just being silly

Note that my OP said 'wives', not 'wife'. After the third one I recognised a trend....

Simon

[Khun Jean]

It is quit simple in hindsight. It all depends on the sequence of steps you make.

Make it a project of at least 2-3 years.

When your girl is your girlfriend take some time to develop a relationship.

When the decision is made to marry, go find some land, put it in her name, get a usufruct (on the moment of transfer). Wait a few months. While waiting think about what kind of house you would like.

The commit to it. If you want total control over the house, build it AND document the whole from start to finish. From plans, to building permits to receipts.

Then get married.

Live happily ever after.

[MacChine]

They make the rules so convoluted and unfair, it is set up for foreigners to be taken advantage of.

Why allow it?

[LennyW]

They make the rules so convoluted and unfair, it is set up for foreigners to be taken advantage of.

Why allow it?

Utter nonsense!

[jbrain]

It is quit simple in hindsight. It all depends on the sequence of steps you make.

Make it a project of at least 2-3 years.

When your girl is your girlfriend take some time to develop a relationship.

When the decision is made to marry, go find some land, put it in her name, get a usufruct (on the moment of transfer). Wait a few months. While waiting think about what kind of house you would like.

The commit to it. If you want total control over the house, build it AND document the whole from start to finish. From plans, to building permits to receipts.

Then get married.

Live happily ever after.

An usufruct between man and wife has no value since it can be cancelled by either party at any given time.

Owning the house including building license and whatever also doesn't make much sense if you're not allowed to enter the land it's standing on.

Edited September 22, 2013 by jbrain

[FiftyTwo]

I'm buying a house for my gf tomorrow.

Already given the builder 20%, the bank will pay the other 80% tomorrow at the land office.

No lease, no usufruct, no superficialities.

If it all goes horribly wrong (in the next 25 years) she gets stuck with a huge loan (entirely in her name) that she has little chance of repaying, and I get to rent a place that's cheaper than the house repayments, while looking for a new and younger gf.

[keithkarmann]

I'm buying a house for my gf tomorrow.

Already given the builder 20%, the bank will pay the other 80% tomorrow at the land office.

No lease, no usufruct, no superficialities.

If it all goes horribly wrong (in the next 25 years) she gets stuck with a huge loan (entirely in her name) that she has little chance of repaying, and I get to rent a place that's cheaper than the house repayments, while looking for a new and younger gf.

I like the bit about looking for a younger girlfriend, I think we all should do that after a maximum of 10 years. But what worries me is about the house purchase. Many years ago in Canada I rented a townhouse and paid my rent every month but I got thrown out by the bank as the owner did not pay his mortgage payments. But I guess with the very good legal system there is no chance of that happening in Thailand.Good luck. Keith

[Khun Jean]

It is quit simple in hindsight. It all depends on the sequence of steps you make.

Make it a project of at least 2-3 years.

When your girl is your girlfriend take some time to develop a relationship.

When the decision is made to marry, go find some land, put it in her name, get a usufruct (on the moment of transfer). Wait a few months. While waiting think about what kind of house you would like.

The commit to it. If you want total control over the house, build it AND document the whole from start to finish. From plans, to building permits to receipts.

Then get married.

Live happily ever after.

An usufruct between man and wife has no value since it can be cancelled by either party at any given time.

Owning the house including building license and whatever also doesn't make much sense if you're not allowed to enter the land it's standing on.

Maybe you did not read good what i wrote.

You make the usufruct BEFORE you marry. It is then a pre marriage 'asset'. In Thailand you do not need a prenuptial (You do that when you have considerable assets in your own country), everything you own before marriage is categorizes as 'Sin Suan Tuan'. As such it can not be dissolved. Do some more research (instead of drinking coffee) before dismissing posts.

Edited September 23, 2013 by Khun Jean

[Khun Jean]

They make the rules so convoluted and unfair, it is set up for foreigners to be taken advantage of.

Why allow it?

The rules are very clear and precise. And they are fair. Foreigners should not have equal rights. A mistake governments in western countries often make.

Foreigners do have certain rights and you can use those. Not misuse them or turn them upside down, so that they are more convenient. If you do that they not apply anymore.

Most lawyers are known to bend those rules, a lot sometimes. Their only goal is to make money, they don't carry the risks.

Don't ever trust one, even if they are expensive. Use them to get advice, then triple check it.

You will find out that most of them utter complete bullshit. In that process of checking you probably find out what your real options are.

If you do go along then don't complain when those bend rules break, it would be entirely your own fault.

[jbrain]

It is quit simple in hindsight. It all depends on the sequence of steps you make.

Make it a project of at least 2-3 years.

When your girl is your girlfriend take some time to develop a relationship.

When the decision is made to marry, go find some land, put it in her name, get a usufruct (on the moment of transfer). Wait a few months. While waiting think about what kind of house you would like.

The commit to it. If you want total control over the house, build it AND document the whole from start to finish. From plans, to building permits to receipts.

Then get married.

Live happily ever after.

An usufruct between man and wife has no value since it can be cancelled by either party at any given time.

Owning the house including building license and whatever also doesn't make much sense if you're not allowed to enter the land it's standing on.

Maybe you did not read good what i wrote.

You make the usufruct BEFORE you marry. It is then a pre marriage 'asset'. In Thailand you do not need a prenuptial (You do that when you have considerable assets in your own country), everything you own before marriage is categorizes as 'Sin Suan Tuan'. As such it can not be dissolved. Do some more research (instead of drinking coffee) before dismissing posts.

I'm not gonna refute your comment about the Sin Suan Tuan as I have no knowledge about that, but I would guess a usufruct isn't categorized as an asset, so I still believe it will become absolete when you marry the person who granted it.

As for your suggestion about the coffee, your wish is my command.

[Naroge]

I'm buying a house for my gf tomorrow.

Already given the builder 20%, the bank will pay the other 80% tomorrow at the land office.

No lease, no usufruct, no superficialities.

If it all goes horribly wrong (in the next 25 years) she gets stuck with a huge loan (entirely in her name) that she has little chance of repaying, and I get to rent a place that's cheaper than the house repayments, while looking for a new and younger gf.

You write that your gf has "little chance of repaying" the loan. I'm therefore surprised that the bank is prepared to give here this loan, even if they take the house as collateral. This is not normal practice. How did you manage to get the bank to do this?

[FiftyTwo]

I'm buying a house for my gf tomorrow.

Already given the builder 20%, the bank will pay the other 80% tomorrow at the land office.

No lease, no usufruct, no superficialities.

If it all goes horribly wrong (in the next 25 years) she gets stuck with a huge loan (entirely in her name) that she has little chance of repaying, and I get to rent a place that's cheaper than the house repayments, while looking for a new and younger gf.

You write that your gf has "little chance of repaying" the loan. I'm therefore surprised that the bank is prepared to give here this loan, even if they take the house as collateral. This is not normal practice. How did you manage to get the bank to do this?

Banks are desperate to lend money, developers are desperate to sell houses.

Those with little money can buy new 'stuff' very easily. Part of the corruption that is Thailand.

[Naroge]

I'm buying a house for my gf tomorrow.

Already given the builder 20%, the bank will pay the other 80% tomorrow at the land office.

No lease, no usufruct, no superficialities.

If it all goes horribly wrong (in the next 25 years) she gets stuck with a huge loan (entirely in her name) that she has little chance of repaying, and I get to rent a place that's cheaper than the house repayments, while looking for a new and younger gf.

You write that your gf has "little chance of repaying" the loan. I'm therefore surprised that the bank is prepared to give here this loan, even if they take the house as collateral. This is not normal practice. How did you manage to get the bank to do this?

Banks are desperate to lend money, developers are desperate to sell houses.

Those with little money can buy new 'stuff' very easily. Part of the corruption that is Thailand.

Thanks. Good to know. So only problem is then that the banks charge crazy interest rates, even with good collateral. (MLR is over 7%.)

[Bpuumike]

It has been stated many times on many threads.

In the worst case be prepared to walk away.

Hopefully it won't come to that for most of us.

[FiftyTwo]

I'm buying a house for my gf tomorrow.

Already given the builder 20%, the bank will pay the other 80% tomorrow at the land office.

No lease, no usufruct, no superficialities.

If it all goes horribly wrong (in the next 25 years) she gets stuck with a huge loan (entirely in her name) that she has little chance of repaying, and I get to rent a place that's cheaper than the house repayments, while looking for a new and younger gf.

You write that your gf has "little chance of repaying" the loan. I'm therefore surprised that the bank is prepared to give here this loan, even if they take the house as collateral. This is not normal practice. How did you manage to get the bank to do this?

Banks are desperate to lend money, developers are desperate to sell houses.

Those with little money can buy new 'stuff' very easily. Part of the corruption that is Thailand.

Thanks. Good to know. So only problem is then that the banks charge crazy interest rates, even with good collateral. (MLR is over 7%.)

I wouldn't call 7% crazy, my first home loan in the UK was 15% (it did rise at one point to 17%).

[Dork]

I'm buying a house for my gf tomorrow.

Already given the builder 20%, the bank will pay the other 80% tomorrow at the land office.

No lease, no usufruct, no superficialities.

If it all goes horribly wrong (in the next 25 years) she gets stuck with a huge loan (entirely in her name) that she has little chance of repaying, and I get to rent a place that's cheaper than the house repayments, while looking for a new and younger gf.

You write that your gf has "little chance of repaying" the loan. I'm therefore surprised that the bank is prepared to give here this loan, even if they take the house as collateral. This is not normal practice. How did you manage to get the bank to do this?

Up until a few years ago Thai banks would generally only approve home mortgages where the applicant had a fixed income high enough to cover the repayments and usually that meant it had to be tax paid income. More recently that requirement has been liberalised and banks are prepared to take into account "unofficial" income. In those cases the bank will evaluate the ability to repay by analysing the applicants bank accounts and credit history which is more practical than it was previously because the National Credit Bureau (commenced operation circa 2001) has been in operation long enough.

I'm only guessing but I assume that must be an acknowledgment by banks that Thailand has a huge underground economy which to remain competitive, they need to take into account. Just because someone has a fixed salary it doesn't necessarily mean that they can repay their mortgage. On the other hand there are street vendors, market traders and others in less salubrious industries with plenty of disposable income.

Right now the big banks are competing fiercely in the home loan market so for any foreigners that are interested in a mortgage but had assumed they wouldn't qualify, it might be worthwhile making enquiries. Mainly this only applies to those married to a Thai or with PR (if buying a condo).

[Arkady]

I'm buying a house for my gf tomorrow.

Already given the builder 20%, the bank will pay the other 80% tomorrow at the land office.

No lease, no usufruct, no superficialities.

If it all goes horribly wrong (in the next 25 years) she gets stuck with a huge loan (entirely in her name) that she has little chance of repaying, and I get to rent a place that's cheaper than the house repayments, while looking for a new and younger gf.

You write that your gf has "little chance of repaying" the loan. I'm therefore surprised that the bank is prepared to give here this loan, even if they take the house as collateral. This is not normal practice. How did you manage to get the bank to do this?

Up until a few years ago Thai banks would generally only approve home mortgages where the applicant had a fixed income high enough to cover the repayments and usually that meant it had to be tax paid income. More recently that requirement has been liberalised and banks are prepared to take into account "unofficial" income. In those cases the bank will evaluate the ability to repay by analysing the applicants bank accounts and credit history which is more practical than it was previously because the National Credit Bureau (commenced operation circa 2001) has been in operation long enough.

I'm only guessing but I assume that must be an acknowledgment by banks that Thailand has a huge underground economy which to remain competitive, they need to take into account. Just because someone has a fixed salary it doesn't necessarily mean that they can repay their mortgage. On the other hand there are street vendors, market traders and others in less salubrious industries with plenty of disposable income.

Right now the big banks are competing fiercely in the home loan market so for any foreigners that are interested in a mortgage but had assumed they wouldn't qualify, it might be worthwhile making enquiries. Mainly this only applies to those married to a Thai or with PR (if buying a condo).

I think foreigners buying in a Thai wife's name and getting a mortgage based on the foreigner's salary are going to have to sign a guarantee. That means you are still going to have to pay off the loan as well as pay rent in your new place after the wife has booted you out of the house you kindly bought her.

Re other income. I talked to real estate developer the other day who said his company is actively helping customers apply for mortgages based on self employed income which is notoriously difficult to get a mortgage on. These customers have to be able to verify their income through tax returns though. So it is not supporting the black economy. Obviously this doesn't apply to foreigners because they are not allowed to be self employed.

[FiftyTwo]

Up until a few years ago Thai banks would generally only approve home mortgages where the applicant had a fixed income high enough to cover the repayments and usually that meant it had to be tax paid income. More recently that requirement has been liberalised and banks are prepared to take into account "unofficial" income. In those cases the bank will evaluate the ability to repay by analysing the applicants bank accounts and credit history which is more practical than it was previously because the National Credit Bureau (commenced operation circa 2001) has been in operation long enough.

I'm only guessing but I assume that must be an acknowledgment by banks that Thailand has a huge underground economy which to remain competitive, they need to take into account. Just because someone has a fixed salary it doesn't necessarily mean that they can repay their mortgage. On the other hand there are street vendors, market traders and others in less salubrious industries with plenty of disposable income.

Right now the big banks are competing fiercely in the home loan market so for any foreigners that are interested in a mortgage but had assumed they wouldn't qualify, it might be worthwhile making enquiries. Mainly this only applies to those married to a Thai or with PR (if buying a condo).

I think foreigners buying in a Thai wife's name and getting a mortgage based on the foreigner's salary are going to have to sign a guarantee. That means you are still going to have to pay off the loan as well as pay rent in your new place after the wife has booted you out of the house you kindly bought her.

Re other income. I talked to real estate developer the other day who said his company is actively helping customers apply for mortgages based on self employed income which is notoriously difficult to get a mortgage on. These customers have to be able to verify their income through tax returns though. So it is not supporting the black economy. Obviously this doesn't apply to foreigners because they are not allowed to be self employed.

Depends on bank.

BKB need husband to sign as guarantor.

SCB don't.

But what real liability does a foreigner have when signing as guarantor?

If you default on the loan, neither of you will be able to own property, vehicles or have Thai bank accounts for 10 years. Not a big problem for a foreigner, but a really big problem for a Thai lady.

The really big developers will also fix your loan applicant up with a 'job' for the required length of time.

Some of the smaller guys have the contacts to do this also.

[TheSwede99]

A falang can be entered on a Chanote as lender who have financed the purchase so that the house and land can not be sold before the loan is fully paid and the falang is removed from the Chanote.

This is the same procedure as when the bank is the lender.

At the same time you can write a lease for 30 years so you will have 100% access to the house.

The loan will never be paid so you will have full control until you decide to cancel the loan contract in the land office and give her the house, or you can sell the house if she can't pay for it.

[Khun Jean]

Unless your sweetheart find a richer boyfriend who gives her the money to pay of the mortgage.

[Arkady]

Unless your sweetheart find a richer boyfriend who gives her the money to pay of the mortgage.

He is more likely to get some heavies to evict you from the house or even blow you away than buy you out.

[jbrain]

A falang can be entered on a Chanote as lender who have financed the purchase so that the house and land can not be sold before the loan is fully paid and the falang is removed from the Chanote.

This is the same procedure as when the bank is the lender.

At the same time you can write a lease for 30 years so you will have 100% access to the house.

The loan will never be paid so you will have full control until you decide to cancel the loan contract in the land office and give her the house, or you can sell the house if she can't pay for it.

You can not register a mortgage and a 30 year lease on the same title deed, as the land department will not accept it.

It's one or the other.

[cheeryble]

You can not register a mortgage and a 30 year lease on the same title deed, as the land department will not accept it.

It's one or the other.

What's that based on jbrain?

Is there reason to believe it's against a guideline or could it be just one experience of one land dept?

Thanks....

[Naroge]

You can not register a mortgage and a 30 year lease on the same title deed, as the land department will not accept it.

It's one or the other.

What's that based on jbrain?

Is there reason to believe it's against a guideline or could it be just one experience of one land dept?

Thanks....

My take on this is that if you would have both the mortgage and the lease on the same Title Deed, then the mortgage is rather useless as the bank can not cash in on the land if they need to take over the land due to non payment by the lender.

[jbrain]

You can not register a mortgage and a 30 year lease on the same title deed, as the land department will not accept it.

It's one or the other.

What's that based on jbrain?

Is there reason to believe it's against a guideline or could it be just one experience of one land dept?

Thanks....

My take on this is that if you would have both the mortgage and the lease on the same Title Deed, then the mortgage is rather useless as the bank can not cash in on the land if they need to take over the land due to non payment by the lender.

I'm not sure if that is the reason because I believe that there can be both a mortgage and a lease registered on the same plot,however I'm not sure about that, but the lessee and the mortgagee can not be the same person.

I know it is legal that the mortgagee has a maximum 3 year lease on the land, which doesn't need to be registered.

What I posted in my previous post was told to me by the lawyer when I asked to register both a mortgage and a lease on my land, and was later confirmed by other legal advisers.

I once asked this question on a Thai online law website and this is the answer I got.

In general, usufruct or lease should not make a difference fot the land office. Normally, the owner cannot create any emcumbrance on the land without your consent as the mortgagee. It could be be possible to register a lease or usufruct over the land, even in your name, but it also depends on the mortgage agreement registered with the land office allowing the owner to create an encumbrance over the land after the mortgage registration.

The way the lawyer explained it to me, was that in that case they smell a rat .

[icare999]

forget it if you dont trust your girlfriend/wife simply dont do it. Do you really believe an untrafact will protect you if things go wrong. Your living in cloud cookoo land mate. If it goes bad and 10 of her family set up camp in the ouse what then.

[cheeryble]

If your girlfriend is unwilling to live somewhere other than her village, move on. Good sex is relatively easy to find.

How you know the sex is good?

Right, we better check.....

Edited October 18, 2013 by cheeryble

[Arkady]

You can not register a mortgage and a 30 year lease on the same title deed, as the land department will not accept it.

It's one or the other.

What's that based on jbrain?

Is there reason to believe it's against a guideline or could it be just one experience of one land dept?

Thanks....

My take on this is that if you would have both the mortgage and the lease on the same Title Deed, then the mortgage is rather useless as the bank can not cash in on the land if they need to take over the land due to non payment by the lender.

I'm not sure if that is the reason because I believe that there can be both a mortgage and a lease registered on the same plot,however I'm not sure about that, but the lessee and the mortgagee can not be the same person.

I know it is legal that the mortgagee has a maximum 3 year lease on the land, which doesn't need to be registered.

What I posted in my previous post was told to me by the lawyer when I asked to register both a mortgage and a lease on my land, and was later confirmed by other legal advisers.

I once asked this question on a Thai online law website and this is the answer I got.

In general, usufruct or lease should not make a difference fot the land office. Normally, the owner cannot create any emcumbrance on the land without your consent as the mortgagee. It could be be possible to register a lease or usufruct over the land, even in your name, but it also depends on the mortgage agreement registered with the land office allowing the owner to create an encumbrance over the land after the mortgage registration.

The way the lawyer explained it to me, was that in that case they smell a rat .

From my recollection the registration of a usufruct at the Land Dept involves filling in a standard form with no space for much detail. You can also sign a detailed supplementary usufruct agreement that is not registered and which could be the basis of litigation but the court might choose to take into account only what was registered at the Land Dept, as is the case with options to renew 30 year leases (much loved by expat estate agents) which would not be recognised by a court. At any rate a court is unlikely to take into account anything in the agreement that is inconsistent with the Civil and Commmercial Code's section on usufruct.

I don't think it is illegal for the Land Dept to register a lease/usufruct as well as a mortgage on the same property. It is just that no sane lender would allow it, since they would be unable to legally foreclose on the collateral until the lease came to an end or the usufructee died (assuming a lifetime usufruct).