90 yr lease (30/30/30) but what happens after the first 30 years?

[usasia8888]

I have read many people (mostly agents and developers) discussing the purchase of property can be for 3 consecutive 30 years leases. Also read the first 30 years is fine but the 2nd & 3rd 30 years leases may not be so certain. What's the real deal here? What happens after the first 30 years? Easy to renew? Has to be negotiated? What about if it is not? Do you really lose you property (ie: villa/house/apartment)? Are you forced to sell? Its really an odd system of not being able to purchase the land which Thailand seems to be quite famous for. Guidance would be very helpful.

Edited May 16, 2014 by usasia8888

[Showbags]

You will be on a promise...you can trust me....smile.

[delgarcon]

I was told by a Thai lawyer that the 30 years x 3 lease is not legal. My advice is go and see a good lawyer before you part with your money and don't trust the replies that you get on here.

[usasia8888]

I was told by a Thai lawyer that the 30 years x 3 lease is not legal. My advice is go and see a good lawyer before you part with your money and don't trust the replies that you get on here.

that's all sensible. Why do people still tell you about these 90 years leases then? Seems just wrong. I was looking for someone who has gone through the experience. I wonder how many different opinions I will get from lawyers.

[LennyW]

No such thing as a 90 year lease in Thailand, simply a marketing ploy

30 years is the maximum lease period that will be acknowledged by the local land office.

If you are looking for a longer period consider a lifetime Usufruct.

[usasia8888]

No such thing as a 90 year lease in Thailand, simply a marketing ploy

30 years is the maximum lease period that will be acknowledged by the local land office.

If you are looking for a longer period consider a lifetime Usufruct.

thank you. are they legal? If so, may be the way to go. Property ownership seems unnecessarily complicated in Thailand. I read the following:

"The right of Usufruct is one of the limited rights over real Thailand properties available to foreigners. In spite of the advantages brought by such right, issues regarding its limited and transitory nature make most potential usufructuaries hesitant and weary of engaging in such an activity. Still, the protection and security afforded by this right to its holders outweigh these concerns."

What are the concerns?

Edited May 16, 2014 by usasia8888

[usasia8888]

Usufructs in Thailand

A Usufruct is a real right by virtue of which a person is given the opportunity to enjoy the property of another with the concomitant obligation of preserving the property. A usufruct generally involves two requisites– first, the right to enjoy the property of another and second, the obligation to preserve the form and substance of the property.

Legalese aside, a Usufruct is considered as one of the most potent means for allowing foreigners to acquire property interests in Thailand particularly in its resources such as mines, forests and quarries. Its simplicity has been compared to that of a lease although a Usufruct entails more rights and privileges not present in the latter.

Constituting a right of Usufruct has certain advantages. Being a real right, the title creating the Usufruct is required to be registered with the Land Office. Once registered, the person holding the right, known as the usufructuary, is then entitled to the enjoyment of the land. Under Thai law, a Usufruct may be constituted either for a specific period of time or for the lifetime of the usufructuary. In the event that no period of time was specified, a presumption arises that such exists during the life of the usufructuary. An additional advantage of having a right of Usufruct over a property is that the land owner is prohibited during its existence from alienating the property. Moreover, a usufructuary may acquire a House Registration Certificate enabling him to lease or rent out the property and receive rent income.

One of the most prevailing issues regarding the right is its transmissibility. Under the Thai Civil and Commercial Code, the exercise of such right may be transferred to other persons during the lifetime of the usufructuary. But once the usufructuary dies, the right is deemed terminated and the property reverts back to the landowner. As a means of addressing this problem, a usufruct may constitute a lease in favour of his or her heirs during his or her lifetime. Thai jurisprudence has already laid down the doctrine that a lease agreement survives the usufructuary’s death. Consequently, this extends the lifetime of the usufruct for thirty (30) years to the benefit of the heirs.

A Usufruct may be likened to the concept of Servitudes under common law as the two operate similarly. The difference lies in that a Servitude may be inherited by the holder’s heirs. In such case, a Usufruct is similar to a life estate used in the United States or the law on trusts as understood in the United Kingdom.

Those wishing to obtain this right must however bear the following in mind: First, a usufructuary is required to maintain the property in suitable condition by answering for minor repairs, taxes and fees including interests in outstanding mortgages. Second, the usufructuary is prohibited from making major alterations on the property. Third, the usufructuary is held liable for the destruction and depreciation of the property unless of ordinary prudence is exercised. Last, the owner of the land has the right to compel the usufructuary to insure the property and in the event that the property has already been insured, the usufructuary may renew such insurance.

The right of Usufruct is one of the limited rights over real Thailand properties available to foreigners. In spite of the advantages brought by such right, issues regarding its limited and transitory nature make most potential usufructuaries hesitant and weary of engaging in such an activity. Still, the protection and security afforded by this right to its holders outweigh these concerns.

[Delight]

A lease commences the moment that both parties sign.Both parties have to sign again after the initial lease finishes. and sign again after the 2nd lease ends.

The maximum term is 30 years for a lease

[usasia8888]

A lease commences the moment that both parties sign.Both parties have to sign again after the initial lease finishes. and sign again after the 2nd lease ends.

The maximum term is 30 years for a lease

thank you. Seems for long term stay to control real estate a usufruct may be the way to go. still learning. thank you.

[KittenKong]

Why do people still tell you about these 90 years leases then?

Because they are trying to sell you something?

The property market in Thailand is absolutely riddled with lies, deception and greed. Don't believe a single word that anyone connected with a sale tells you.

[usasia8888]

Why do people still tell you about these 90 years leases then?

Because they are trying to sell you something?

The property market in Thailand is absolutely riddled with lies, deception and greed. Don't believe a single word that anyone connected with a sale tells you.

the good thing about taking that approach is you can start to easily screen out people who suggest 90 years type leases, or other. I know to look around quite a bit and... get lawyered up if entering a contract. thank you.

[oracle]

What they did with the 90 year land lease was that the 2 renewal terms were prepaid and the lease contained an option to transfer the land to a freehold title prior to the end of the first 30 years term, Freehold in the name of a Thai company or their own name should the law change or to the name of a Thai. This was not so bad because at that time Thai companies were a common way for foreigners to own land in Thailand. You could always change the lease to a freehold title without further payment, anyway that was the idea.

Since the land office regulation with regards to Thai companies in 2006 this changed a bit. It was clear the government considers nominee land holding companies by foreigners illegal. And in 2008 the land offices received new regulations which also restricted the content of the lease. It was not allowed any more to register 90 year prepaid leases, including the option to transfer to freehold. You now can still include the renewal option, but not as prepaid. Renewal terms with the aim to create a longer lease term do not work, that was also not how the 90 year lease was structured.

Now they could offer you a separate agreement in addition to the 30 year lease with all the options, including the payment for renewal terms, but this is not registered with the land offce. It's a private agreement in which you could also arrange possession of the land title deed and such. Having only renewal terms is not enough.

[AnotherOneAmerican]

Don't use anyone that promises or offers 30 year x3 leases.

They are either incompetent or crooks.

[Rowdy100]

If you're worried about controlling "ownership" or losing your "investment"... Better to buy a condo / apartment in your name. Or take a punt and allow your (thai wife / or kids) to own the land and build a house that you can technically "own" - though I imagine that unless you can build a house that you can dismantle and shift (actually had a mate who did that a few years back) if your relationship goes bad it might be a tad problematic having a house that you "own" on some land that your now ex-missus technically owns (even though you paid for it).

Either way, the same old unwritten rules apply... don't invest any money into Thailand that you can't really afford to walk away from if things (heaven forbid) happen to go pear-shaped.

One of the best "investments" I have made in the last 20 years is an apartment in Thailand - not becasue I have or will make lots of money from it (remains to be seen - though I have rented it out for a year)..., but because it provides a nice little home base (and great peace of mind for my wife). So it owes me nothing as far as I'm concerned and every day I spend there I consider it a bonus. Couldn't be happier whenever I'm there and my (Thai) wife thinks likewise - we travel a fair bit and we come and go as we please and it's just really handy. I also use it as a home base when I'm in between work contracts or on extended holidays etc. Perfect.

So perhaps not all "investments" can be measured equally...after all - it's only money... how do you measure happiness and convenience (?)

Wish you all the best. Investing in Thailand is not all doom and gloom, there are good news stories and not everybody out there wants to rip you off (though lots do). Good luck.

[David48]

Usufructs in Thailand

A Usufruct is a real right by virtue of which a person is given the opportunity to enjoy the property of another with the concomitant obligation of preserving the property. A usufruct generally involves two requisites– first, the right to enjoy the property of another and second, the obligation to preserve the form and substance of the property.

Legalese aside, a Usufruct is considered as one of the most potent means for allowing foreigners to acquire property interests in Thailand particularly in its resources such as mines, forests and quarries. Its simplicity has been compared to that of a lease although a Usufruct entails more rights and privileges not present in the latter.

Constituting a right of Usufruct has certain advantages. Being a real right, the title creating the Usufruct is required to be registered with the Land Office. Once registered, the person holding the right, known as the usufructuary, is then entitled to the enjoyment of the land. Under Thai law, a Usufruct may be constituted either for a specific period of time or for the lifetime of the usufructuary. In the event that no period of time was specified, a presumption arises that such exists during the life of the usufructuary. An additional advantage of having a right of Usufruct over a property is that the land owner is prohibited during its existence from alienating the property. Moreover, a usufructuary may acquire a House Registration Certificate enabling him to lease or rent out the property and receive rent income.

One of the most prevailing issues regarding the right is its transmissibility. Under the Thai Civil and Commercial Code, the exercise of such right may be transferred to other persons during the lifetime of the usufructuary. But once the usufructuary dies, the right is deemed terminated and the property reverts back to the landowner. As a means of addressing this problem, a usufruct may constitute a lease in favour of his or her heirs during his or her lifetime. Thai jurisprudence has already laid down the doctrine that a lease agreement survives the usufructuary’s death. Consequently, this extends the lifetime of the usufruct for thirty (30) years to the benefit of the heirs.

A Usufruct may be likened to the concept of Servitudes under common law as the two operate similarly. The difference lies in that a Servitude may be inherited by the holder’s heirs. In such case, a Usufruct is similar to a life estate used in the United States or the law on trusts as understood in the United Kingdom.

Those wishing to obtain this right must however bear the following in mind: First, a usufructuary is required to maintain the property in suitable condition by answering for minor repairs, taxes and fees including interests in outstanding mortgages. Second, the usufructuary is prohibited from making major alterations on the property. Third, the usufructuary is held liable for the destruction and depreciation of the property unless of ordinary prudence is exercised. Last, the owner of the land has the right to compel the usufructuary to insure the property and in the event that the property has already been insured, the usufructuary may renew such insurance.

The right of Usufruct is one of the limited rights over real Thailand properties available to foreigners. In spite of the advantages brought by such right, issues regarding its limited and transitory nature make most potential usufructuaries hesitant and weary of engaging in such an activity. Still, the protection and security afforded by this right to its holders outweigh these concerns.

I presume that the above are not your originial words, then it might be an Idea to cite the referance of where you nabbed it from ...

[Langsuan Man]

I presume that the above are not your originial words, then it might be an Idea to cite the referance of where you nabbed it from ...

And explain what it has to do with the subject :

90 yr lease (30/30/30) but what happens after the first 30 years?

[impulse]

I can't help but wonder what the real estate law will be like in 30 years when the question becomes relevant.

On the other hand, going in I'd want a lawyer to tell me if the first 30 years are even guaranteed, especially given the controversy of the 30+30+30 clause.

Would the fact that it's an illegal contract (if it is in fact illegal) negate even the legal parts of it? Or would the illegal parts of the contract be struck down, leaving the rest of the contract in force?

A minefield I wouldn't want to wander though. Best of luck, though.

[David48]

I presume that the above are not your originial words, then it might be an Idea to cite the referance of where you nabbed it from ...

And explain what it has to do with the subject :

90 yr lease (30/30/30) but what happens after the first 30 years?

Well ... it's a professional courtesy and a requirement of the Forum that, if you are to quote someone else's professional opinion then it should be referanced.

Before I made the post, I had a read of the OP's previous contributions ... most of them were 'one-liners', so, to post something of that authority, considering that the poster in question is also the OP who came asking the originial question, I would conclude that the words written are not his own.

For example ...

A Usufruct is a real right by virtue of which a person is given the opportunity to enjoy the property of another with the concomitant obligation of preserving the property unless otherwise agreed upon. Although it is a Civil law concept tracing its origin to Roman law it still finds wide application in the present.

It may be likened to a lease agreement except it entails more rights and privileges not present in leasehold. Being a real right, a Usufruct must be registered with the Land Office.

Upon registration of the Usufruct, the person on whose favor it was constituted, or Usufructuary, is entitled to the enjoyment of the land.

A usufruct may be constituted either for a specific period of time or for the life of the Usufructuary. It is presumed that a usufruct was constituted on the life of the Usufructuary if no period was agreed upon.

The ownership of the land on which a Usufruct has been constituted is prohibited from being transferred from one person to another. The Usufructuary is allowed to rent out the property and therefore acquire rent income from it.

The Usufructuary however, is required to perform the following duties: maintain the property in proper condition, refrain from making any major alterations on the property, pay for the destruction or depreciation of the property unless the exercise of ordinary prudence can be proven and ensure the property.

Once the Usufruct is terminated, the land reverts back to its owner.

Referance

[usasia8888]

Usufructs in Thailand

A Usufruct is a real right by virtue of which a person is given the opportunity to enjoy the property of another with the concomitant obligation of preserving the property. A usufruct generally involves two requisites– first, the right to enjoy the property of another and second, the obligation to preserve the form and substance of the property.

Legalese aside, a Usufruct is considered as one of the most potent means for allowing foreigners to acquire property interests in Thailand particularly in its resources such as mines, forests and quarries. Its simplicity has been compared to that of a lease although a Usufruct entails more rights and privileges not present in the latter.

Constituting a right of Usufruct has certain advantages. Being a real right, the title creating the Usufruct is required to be registered with the Land Office. Once registered, the person holding the right, known as the usufructuary, is then entitled to the enjoyment of the land. Under Thai law, a Usufruct may be constituted either for a specific period of time or for the lifetime of the usufructuary. In the event that no period of time was specified, a presumption arises that such exists during the life of the usufructuary. An additional advantage of having a right of Usufruct over a property is that the land owner is prohibited during its existence from alienating the property. Moreover, a usufructuary may acquire a House Registration Certificate enabling him to lease or rent out the property and receive rent income.

One of the most prevailing issues regarding the right is its transmissibility. Under the Thai Civil and Commercial Code, the exercise of such right may be transferred to other persons during the lifetime of the usufructuary. But once the usufructuary dies, the right is deemed terminated and the property reverts back to the landowner. As a means of addressing this problem, a usufruct may constitute a lease in favour of his or her heirs during his or her lifetime. Thai jurisprudence has already laid down the doctrine that a lease agreement survives the usufructuary’s death. Consequently, this extends the lifetime of the usufruct for thirty (30) years to the benefit of the heirs.

A Usufruct may be likened to the concept of Servitudes under common law as the two operate similarly. The difference lies in that a Servitude may be inherited by the holder’s heirs. In such case, a Usufruct is similar to a life estate used in the United States or the law on trusts as understood in the United Kingdom.

Those wishing to obtain this right must however bear the following in mind: First, a usufructuary is required to maintain the property in suitable condition by answering for minor repairs, taxes and fees including interests in outstanding mortgages. Second, the usufructuary is prohibited from making major alterations on the property. Third, the usufructuary is held liable for the destruction and depreciation of the property unless of ordinary prudence is exercised. Last, the owner of the land has the right to compel the usufructuary to insure the property and in the event that the property has already been insured, the usufructuary may renew such insurance.

The right of Usufruct is one of the limited rights over real Thailand properties available to foreigners. In spite of the advantages brought by such right, issues regarding its limited and transitory nature make most potential usufructuaries hesitant and weary of engaging in such an activity. Still, the protection and security afforded by this right to its holders outweigh these concerns.

the source was http://www.thailand-realestate.com/thailand-property/usufruct whichhwas very similar to advice from www.Isaanlawyers.com Yes, I should have added the source. I would normally have done. I didn't know how to cute and paste correctly from an Apple Ipad I was using temporarily using due to my computer shutting down due to microsoft XP problem.

Also, I cut and paste as many people pointed out not to use the 30/30/30 lease structure (thank you) and refered to usufruct structure so to benefit the thread topic i tried to cut and paste what it was so it would continue.

I also have responded to some people on this tread and others privately or politely thanked them on this one. Again, thank you for pointing it out. Sorry for any inconvenience. It was NOT intended.

Edited May 19, 2014 by usasia8888

[usasia8888]

I presume that the above are not your originial words, then it might be an Idea to cite the referance of where you nabbed it from ...

And explain what it has to do with the subject :

90 yr lease (30/30/30) but what happens after the first 30 years?

-------------------------

the source was http://www.thailand-...operty/usufruct whichhwas very similar to advice from www.Isaanlawyers.com Yes, I should have added the source. I would normally have done. I didn't know how to cute and paste correctly from an Apple Ipad I was using temporarily using due to my computer shutting down due to microsoft XP problem.

Also, I cut and paste as many people pointed out not to use the 30/30/30 lease structure (thank you) and refered to usufruct structure so to benefit the thread topic i tried to cut and paste what it was so it would continue.

I also have responded to some people on this tread and others privately or politely thanked them on this one. Again, thank you for pointing it out. Sorry for any inconvenience. It was NOT intended

[usasia8888]

Usufructs in Thailand

A Usufruct is a real right by virtue of which a person is given the opportunity to enjoy the property of another with the concomitant obligation of preserving the property. A usufruct generally involves two requisites first, the right to enjoy the property of another and second, the obligation to preserve the form and substance of the property.

Legalese aside, a Usufruct is considered as one of the most potent means for allowing foreigners to acquire property interests in Thailand particularly in its resources such as mines, forests and quarries. Its simplicity has been compared to that of a lease although a Usufruct entails more rights and privileges not present in the latter.

Constituting a right of Usufruct has certain advantages. Being a real right, the title creating the Usufruct is required to be registered with the Land Office. Once registered, the person holding the right, known as the usufructuary, is then entitled to the enjoyment of the land. Under Thai law, a Usufruct may be constituted either for a specific period of time or for the lifetime of the usufructuary. In the event that no period of time was specified, a presumption arises that such exists during the life of the usufructuary. An additional advantage of having a right of Usufruct over a property is that the land owner is prohibited during its existence from alienating the property. Moreover, a usufructuary may acquire a House Registration Certificate enabling him to lease or rent out the property and receive rent income.

One of the most prevailing issues regarding the right is its transmissibility. Under the Thai Civil and Commercial Code, the exercise of such right may be transferred to other persons during the lifetime of the usufructuary. But once the usufructuary dies, the right is deemed terminated and the property reverts back to the landowner. As a means of addressing this problem, a usufruct may constitute a lease in favour of his or her heirs during his or her lifetime. Thai jurisprudence has already laid down the doctrine that a lease agreement survives the usufructuarys death. Consequently, this extends the lifetime of the usufruct for thirty (30) years to the benefit of the heirs.

A Usufruct may be likened to the concept of Servitudes under common law as the two operate similarly. The difference lies in that a Servitude may be inherited by the holders heirs. In such case, a Usufruct is similar to a life estate used in the United States or the law on trusts as understood in the United Kingdom.

Those wishing to obtain this right must however bear the following in mind: First, a usufructuary is required to maintain the property in suitable condition by answering for minor repairs, taxes and fees including interests in outstanding mortgages. Second, the usufructuary is prohibited from making major alterations on the property. Third, the usufructuary is held liable for the destruction and depreciation of the property unless of ordinary prudence is exercised. Last, the owner of the land has the right to compel the usufructuary to insure the property and in the event that the property has already been insured, the usufructuary may renew such insurance.

The right of Usufruct is one of the limited rights over real Thailand properties available to foreigners. In spite of the advantages brought by such right, issues regarding its limited and transitory nature make most potential usufructuaries hesitant and weary of engaging in such an activity. Still, the protection and security afforded by this right to its holders outweigh these concerns.

I presume that the above are not your originial words, then it might be an Idea to cite the referance of where you nabbed it from ...

-----------------------

the source was http://www.thailand-...operty/usufruct whichhwas very similar to advice from www.Isaanlawyers.com Yes, I should have added the source. I would normally have done. I didn't know how to cute and paste correctly from an Apple Ipad I was using temporarily using due to my computer shutting down due to microsoft XP problem.

Also, I cut and paste as many people pointed out not to use the 30/30/30 lease structure (thank you) and refered to usufruct structure so to benefit the thread topic i tried to cut and paste what it was so it would continue.

I also have responded to some people on this tread and others privately or politely thanked them on this one. Again, thank you for pointing it out. Sorry for any inconvenience. It was NOT intended

Edited May 19, 2014 by Crossy
fixed the quote

[AnotherOneAmerican]

I can't help but wonder what the real estate law will be like in 30 years when the question becomes relevant.

On the other hand, going in I'd want a lawyer to tell me if the first 30 years are even guaranteed, especially given the controversy of the 30+30+30 clause.

Would the fact that it's an illegal contract (if it is in fact illegal) negate even the legal parts of it? Or would the illegal parts of the contract be struck down, leaving the rest of the contract in force?

A minefield I wouldn't want to wander though. Best of luck, though.

Actually, Thai law states, if any method is used to try and circumvent or extend the maximum 30 year period, the total length of the contract will be reduced to 30 years.

Which seems to be saying, you won't be penalized for trying.

Edited May 19, 2014 by AnotherOneAmerican

[marino28]

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[slonic]

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