Another 30 Year Lease Question

[Buckwheat]

I was told last night that while the 30 year lease is solid in accordance with Thai law, the OPTION to renew at the end of the initial 30 years is not enforcable and 100% up to the "owner" of the land. So while the contract may say you have the option to renew in your initial contract, you might be sol at the end of 30 years.

Can anyone enlighten me?

[monty]

The first 30 years is solid once the lease is registered at the Land and House department and taxes are duly payed.

Maximum term is 30 years...

You can contractually bind the owner to agree to a second term of 30 years, but again this is only enforcable after the owner goes with you to the Land and House department at the start of the 2nd 30 year term.

If the owner decides not to go along with you, the only thing you could do is to file a lawsuit with the civil court against the owner, reason being breach of a contract between two individuals.

First, this can be a very lengthy process, and expensive as well.

Second, it's actually pretty easy for the landowner to win this process, he only has to find something you did during these 30 years which might not be according to your lease contract.

An example might be putting up a tiny little doghouse without his written consent or some other silly thing...

There are a lot of legal loopholes giving any good lawyer a way to let the contract be dissolved...

[Buckwheat]

The first 30 years is solid once the lease is registered at the Land and House department and taxes are duly payed.

Maximum term is 30 years...

You can contractually bind the owner to agree to a second term of 30 years, but again this is only enforcable after the owner goes with you to the Land and House department at the start of the 2nd 30 year term.

If the owner decides not to go along with you, the only thing you could do is to file a lawsuit with the civil court against the owner, reason being breach of a contract between two individuals.

First, this can be a very lengthy process, and expensive as well.

Second, it's actually pretty easy for the landowner to win this process, he only has to find something you did during these 30 years which might not be according to your lease contract.

An example might be putting up a tiny little doghouse without his written consent or some other silly thing...

There are a lot of legal loopholes giving any good lawyer a way to let the contract be dissolved...

Thanks Monty...I'll pass it on

[chownah]

I've often wondered about the practicality of getting a 30 year lease on a property and writing it in a way so that every year the lease could be renewed give 30 more years. For example, on jan 1, 2006 you sign a lease for some property stating it is for 30 years and goes into effect on jan 1,200b.....on jan 1 2007 you make a copy of the lease you signed the previous year only you change the effective date to jan , 2007....this might be accompanied by a booster payment for the one year extension...or maybe just a token fee to make it all legal....depending on the arrangement.... This way you would always have 30 years ahead of you even as time went by and you would know 30 years in advance if the owner had firm intentions of ending the lease in the future. This could be done every year of it could be done every 2 years or every 5 years...or whatever fits with your confidence level about the security of the arrangement.

[Khun Jean]

Still no guarantee that the landowner will do that. And if you write it in the contract that he has to it the contract will be invalid and he can kick you out anytime. 30 years is the max. Period!

The biggest gain for the owner is that after 30 years the land is still his or his childrens. 30 years later it can be worth 2 times or even 50 times more depending on the location. Your lease will be worth less and less as time goes by. His land will go up and up as time goes by. The "booster" payment can be a lot more than you think. And again you can not write in the contract what that "booster" payment will be.

Best bet is to have a 30 year lease. And then try every year or 5 year period to break the contract and make a new one. Without ever mentioning any obligations in the lease contract that the owner has to do it. Then your contract is legal and who knows you might get lucky and find a landowner that can not calculate.

[chownah]

"...................

Best bet is to have a 30 year lease. And then try every year or 5 year period to break the contract and make a new one. Without ever mentioning any obligations in the lease contract that the owner has to do it. ..............."

This is exactly what I was trying to say in my post. Start by writing a straight 30 year lease. One year later (or 5 years later) renegotiate a new lease on the same terms as the original...but with the 30 years starting at the time the new lease is negotiated....this way you'll keep 30 years or thereabouts ahead of you. It would be best to talk with the owner first to explain to them that your intent is to have a renewable 30 year lease but that these are illegal.....etc.

[johnnyk]

"...................

Best bet is to have a 30 year lease. And then try every year or 5 year period to break the contract and make a new one. Without ever mentioning any obligations in the lease contract that the owner has to do it. ..............."

This is exactly what I was trying to say in my post. Start by writing a straight 30 year lease. One year later (or 5 years later) renegotiate a new lease on the same terms as the original...but with the 30 years starting at the time the new lease is negotiated....this way you'll keep 30 years or thereabouts ahead of you. It would be best to talk with the owner first to explain to them that your intent is to have a renewable 30 year lease but that these are illegal.....etc.

I know of at least one developer who has this in his standard LH contract.

You are still only good for 30 yrs max and after he dies, well...

[LoveDaBlues]

"...................

Best bet is to have a 30 year lease. And then try every year or 5 year period to break the contract and make a new one. Without ever mentioning any obligations in the lease contract that the owner has to do it. ..............."

This is exactly what I was trying to say in my post. Start by writing a straight 30 year lease. One year later (or 5 years later) renegotiate a new lease on the same terms as the original...but with the 30 years starting at the time the new lease is negotiated....this way you'll keep 30 years or thereabouts ahead of you. It would be best to talk with the owner first to explain to them that your intent is to have a renewable 30 year lease but that these are illegal.....etc.

The owner would be crazy to go for this. Why should he start a new lease ON THE SAME TERMS AS THE ORIGINAL? Now, if you make the pot a little sweeter....he might go for it. He (the owner) is in the driver's seat; no need for him to start another 30 year lease unless there is more money in it for him.

[Mister Doom]

The owner would be crazy to go for this. Why should he start a new lease ON THE SAME TERMS AS THE ORIGINAL? Now, if you make the pot a little sweeter....he might go for it. He (the owner) is in the driver's seat; no need for him to start another 30 year lease unless there is more money in it for him.

Agreed, but it might work if the wife was the lessor. I would guess that many farangs buy houses when they are in their fifties, so a 30 year lease would give them a few worries if they made it into their eighties and get evicted. If they were to redo the lease after, say, 5 years with the wife (assuming the marriage was still going well) and maybe adding a little sweetner, you effectively get 35 years and then do it second time and unless you're a relative of George Burns, you're probably home and dry.

Each time you do it though, you have to pay 1.1% on the total 30 year lease value - no refunds for cancelling and re - doing the lease.

[LoveDaBlues]

The owner would be crazy to go for this. Why should he start a new lease ON THE SAME TERMS AS THE ORIGINAL? Now, if you make the pot a little sweeter....he might go for it. He (the owner) is in the driver's seat; no need for him to start another 30 year lease unless there is more money in it for him.

Agreed, but it might work if the wife was the lessor. I would guess that many farangs buy houses when they are in their fifties, so a 30 year lease would give them a few worries if they made it into their eighties and get evicted. If they were to redo the lease after, say, 5 years with the wife (assuming the marriage was still going well) and maybe adding a little sweetner, you effectively get 35 years and then do it second time and unless you're a relative of George Burns, you're probably home and dry.

Each time you do it though, you have to pay 1.1% on the total 30 year lease value - no refunds for cancelling and re - doing the lease.

This makes more sense to me. I'm guessing that the Land Office has some 'minimums' on the lease amount so you can't screw them by leasing for 10 baht a month or some lowball amount.

BTW - I recall someone posting a simple 30 year lease; does anyone have a copy or link I can get?

[Dragonman]

The owner would be crazy to go for this. Why should he start a new lease ON THE SAME TERMS AS THE ORIGINAL? Now, if you make the pot a little sweeter....he might go for it. He (the owner) is in the driver's seat; no need for him to start another 30 year lease unless there is more money in it for him.

Agreed, but it might work if the wife was the lessor. I would guess that many farangs buy houses when they are in their fifties, so a 30 year lease would give them a few worries if they made it into their eighties and get evicted. If they were to redo the lease after, say, 5 years with the wife (assuming the marriage was still going well) and maybe adding a little sweetner, you effectively get 35 years and then do it second time and unless you're a relative of George Burns, you're probably home and dry.

Each time you do it though, you have to pay 1.1% on the total 30 year lease value - no refunds for cancelling and re - doing the lease.

Nothing to stop this! Of course you are leaving an opening for the ex missus to claim you forced her to renew in order to break the Land Code provisions, and hence the whole lease would be voidable.