Phuket court rules 'secured' or 'collective' leases are void

[beenitseenitdoneit]

Great news.

If it looks likes a duck, walks like a duck and quakes like a duck, why is it that the real estate industry along with the litigation fraternity, still believe it must be a pig.
A pig in a poke if there ever was one.

And for all those charlatans that have conjured up extra terrestrial leases through offshore accounts, don't worry your day will come soon.

For those that are unable to read the letter of the law, 30 years full stop, no not 30 years and a day, has it ever crossed your mind to decipher the actual spirit of the law?
Why, when and how was this legislation passed, no it wasn't because then or now that Farangs were the flavour of the week.

[Pinot]

Reason #493 never to buy property in Thailand

[TallGuyJohninBKK]

“As always,” he added, “you should engage competent legal and tax counsel in order to implement this mortgage-based security structure successfully.”

Would those be the same "competent legal and tax counsel" in Thailand who presumably told the buyers here that the now invalidated agreements were perfectly legal and secure in the first place???

[bangkoklawyer24]

DON'T WORRY - YOUR PROTECTED LEASE IS STILL SAVE AND VALID

"It may be true that Phuket courts reclassified a validly secured and duly registered lease into a void transfer of legal ownership. Reportedly this has been done without any reference to the anti-nominee rules of the foreigner laws (Land Code, Foreign Business Act), but just by interpreting the Civil and Commercial Code, which does not differentiate between Thai and foreign persons. The fictitious ownership transfer was not declared void, because the investor was a foreigner, but due to the reason this "ownership transfer by mistake" had not been registered as (hidden) sale. It is currently unclear whether the facts in such cases really justify such reclassification, which would be antipodal to civil law legislation and jurisdiction - and whether the courts arguments have been unbiased described reported. Sometimes the wish seems to be father to the thought. It should be clearly noted that it is the general concept of Thailand's lease legislation that any overstepping of legal limitations is carefully reduced by law to a size and scope which is still legal and valid. If a lease agreement is concluded for 31, 90 or 500 years, it would not be deemed to be void from the beginning. Under Section 540, second sentence CCC its enforceability is just limited to the first thirty years. And it will certainly not be reclassified as a (hidden) sale."

Source: http://linkd.in/1JKQ32W

... AND IT IS NO CASE OF SECTION 155 CCC

It is a serious misinterpretation of Section 155 CCC to base a verdict on that piece of legislation. Section 155 CCC refers to circumstances, where the parties create only the wrong impression, a certain contract has been concluded, but in reality they do not agree on such contract. They do not want the contract to have any legal effect, just a apparent legal effect. [A typical example is the sale of estate by an over indebted debtor to his wife, so that the creditor gets discouraged to start legal actions against the apparent penniless debtor. For such scenario the law rules that the sale is void.] However, in our case the parties of the lease agreement did not at all want to create just the appearance of the lease. They wanted and still want a valid lease agreement. Therefore Section 155 CCC is simply not applicable to such case. Source: http://linkd.in/1JKQ32W

[TallGuyJohninBKK]

And yet it seems a trial judge and then an appellate panel have ruled exactly opposite to what BangkokLawyer is saying/arguing here.

Sometimes, a single judge will go off wrongly on a wild hair. That's why appellate panels exist, to review and correct for those kinds of legal misjudgments. But in this case, it seems the appellate panel agreed with the trial judge's interpretation. That certainly can't be considered a promising sign.

But then on the other hand, the law here seems to be pretty flexible and subject to re-interpretation -- depending on the hour of the day and whose money and interests are at stake.

[sanuk711]

in line with the current admin's policy of excluding foreigners and setting the clocks back?

I did not think it would be long before the current government got the blame from the usual people ---even though the initial court case & decision started way before it was in power.

I do think that ThaiVisa should ask their legal expert to (try) to clarify the situation--A company as large as Siam legal would --one would think have probably had a lot of input into these sort of leases.

IMO its not stupid to buy a small (self) property in Thailand, I brought a house in essan nearly 10 years ago, took a 30 year (as a just in case) & unless I am going to get a few telegrams from the queen , then that will certainly see me out. The Cost just over 1.5 Mil.... rents in my area are now around the 12K--15K a month & rising ---so you do the math.

The surprising (odd) thing about this situation was that the court was not asked to rule on this aspect of leases by any of the litigants at all.

"Neither the buyers nor the developer argued that the leases were not valid.

Quite the contrary: they both relied on provisions of the leases to support their respective arguments.

However, the court decided on its own"

The old Chinese proverb about..."lifting a large rock just to drop on ones foot" comes to mind--This still has to go to the supreme court--but it must be a worrying time for some people who had come here to retire, but then I am sure they are all comforted by the Chorus of happy people here on Thaivisa about this situation........ really quite odd to take pleasure in this.

[Halfaboy]

Wondering how many owners will be affected ....

[BB24]

WOW - Talk about the cat and the pigeons !!!

Some people need to calm down - there is a long way to go on this.

Some people need to think about leaving - as soon as something negative happens they 'go off' about Thailand and Thais.

And everybody should wait for the High/Supreme Court ruling on this - and what the Govt/Junta does as a result if anything

[aripengu]

Makes somehow sense that this secured 3x30 year leases are on shaky ground, but to say the registered first 30 years are illegal as well is just a patriotic BS interpretation. If it was registered by the Land Office it is legal, if the governement registered something illegal then they should be held responsible and provide a solution.

Edited February 27, 2015 by aripengu

[Ducking and]

This is not a very detailed explanation but apparently it is saying a lease backed by a share purchase scheme only is a disguise for the true agreement, and so it doesn't work, whereas taking a mortgage of a lease - presumably a mortgage which the mortgagors cannot pay off within 90 years, does work.

[crazydrummerpauly]

Well I've said it before ... You'd have to be a complete and utter moron to buy property in Thailand. Who in their right mind would think about handing over 51% of their assets to what is little more than a nation of thieves?

It's a shame the UK, US and EU countries don't apply the same rules to Thais but of course we understand the importance of foreign investment and we also know that they can't dig it up and take it with them.

The other issue has for many years been pricing; in most cases the property market especially in areas such as Phuket, are so over the top it beggars belief anyone would think they are buying a home / villa or apartment of good investment value.

I honestly cannot understand how anyone could be stupid enough to buy property in Thailand ... there again the Nigerian 419 Scam continues to catch the very stupid and greedy and I can only conclude that the expats who brought property in Thailand fall into both categories.

I totally agree with this. What needs to be done is reform of property rights. I do not see a problem if you allow legal residence to own property here in Thailand Restrict it to residential housing. This will not only boost real estate prices in Thailand but also level the playing field as well. Thais can own land in most other countries MR Prime Minister

Your land ownership laws are archaic. If you retire or work here then its known people who own their own place look after far better then renters. Thais can own in other countries

Although this is not the route problem with Thai society it is a branch problem that needs to be addressed. Heck even if you are not a resident in other countries you can still own a house.

This is the 21st century and a global community Its time Thailand stepped up to the plate

Haha - great idea but very funny for a country that's still struggling to adopt the 20th Century !

[harleyclarkey]

And why is this 'news'? Only the seriously stupid fell for this.

And you are so Bloody clever Tif?

Tell us...what else do you know of now under Thai law that the stupid are falling for. Educate us.

Or are you one of these geniuses who have the gift of hind sight???

[KimSamui]

Quote

"“It is a simple and straightforward legal structure that provides security for the investor. A current ‘Secured’ Lease can be restructured into this better and genuinely secure alternative, before it is too late.

“As always,” he added, “you should engage competent legal and tax counsel in order to implement this mortgage-based security structure successfully.”"

end quote

Any chance the lawyers said that before?

Any chance the lawyers that did the original deal are liable?

Any chance if you did a new "genuinely secure alternative" and a future court rules it bogus the lawyer would be liable? Please find me a lawyer that puts the value of the deal in a bond payable to the customer if it all goes tits up.

I am so sick of this nonsense living here.

Vietnam is looking good.

[harleyclarkey]

What galls me is the fact that the very same corrupt people who make the laws like this...clearly to chaet and scam as is the thai past time....are the ones who take theiur dirty money abroad to buy property in the UK, France, Spain, the EC, States, Oz, NZ, etc, etc with cast iron title.

Give them the very same "title" that we "enjoy" in Thailand.

[givenall]

How can anyone trust this country and bring any money here. the rules keep changing as they please. Be aware, soon so call foreign business 49 % ownership will also be voided and all belong to Thai

[MK1]

The result appears to be same as having an "ashtray" installed on a motorbike !

Edited February 27, 2015 by MK1

[asean]

It is really quite simple. Foreigners can not buy, own, inherit or even take a mortgage on Thai Land. Any lawyer that offers any "structure" or otherwise is complicit to breaking the law. Nominee in any format or arrangement is also illegal.

There is also this strange phenomenon in Thailand where foreign buyers take their legal advice from a lawyer recommended by the vendor?

Of course there is always the 40 million baht option.

Edited February 27, 2015 by asean

[rayongchelsea]

How can anyone trust this country and bring any money here. the rules keep changing as they please. Be aware, soon so call foreign business 49 % ownership will also be voided and all belong to Thai

The rule as stated have not changed. I got that advice in 1987 on leases and company holdings - basically don't go there and that was by a thai lawyer.There will always be ways to circumvent the law.

The worse are Farang developers/ farang estate agents with farang buyers who come up with these loopholes - early 2000's.

The rule is quite simply..if you can't put it in your name it's not yours. If you have a wife and children then buy and put in the wife's name...I see nothing wrong with that.

Also this saying don't walkway from what you can't afford is simply rubbish..if it's not in your name then you have gifted it..nothing to walkway from.

[MrWorldwide]

How can anyone trust this country and bring any money here. the rules keep changing as they please. Be aware, soon so call foreign business 49 % ownership will also be voided and all belong to Thai

Is this before or after the zombie apocalypse ? I always get the timelines confused.

[ChiangmaiRob]

Quote

"“It is a simple and straightforward legal structure that provides security for the investor. A current ‘Secured’ Lease can be restructured into this better and genuinely secure alternative, before it is too late.

“As always,” he added, “you should engage competent legal and tax counsel in order to implement this mortgage-based security structure successfully.”"

end quote

Any chance the lawyers said that before?

Any chance the lawyers that did the original deal are liable?

Any chance if you did a new "genuinely secure alternative" and a future court rules it bogus the lawyer would be liable? Please find me a lawyer that puts the value of the deal in a bond payable to the customer if it all goes tits up.

I am so sick of this nonsense living here.

Vietnam is looking good.

Vietnam has it's issues not unlike Thailand and corruption is almost as bad!

[Trouble]

I'm reading comments here such as "anybody who fell for that is a moron" and even worse comments as to the intelligence of people who chose to invest in property etc in Thailand (and any other country according to a couple of posters) I guess these are the people that could never affords to buy anything and rent 8000 baht a month places in the sticks, but that aside, what more can people do? They take advice from Lawyers (farang or Thai) who set up "legitmate ownership" systems etc. They then go personally to the Land Office - which is a government office, right? - and get everything processed and they walk away with ownership documentation from the government office to show they own this lease under the conditions set out by the lawyers. There a bunch of websites offering similar information. What more could a buyer do? Thai Lawyers, Farang Lawyers and government offices approve everything, so, what more can these guys do?

You are correct in your assumptions that all these people helping with the purchase/lease should know the laws/rules and be assisting with honest information. The point of this and many other threads shows that things in Thailand really don't work that way. Quite a number of years ago I was looking to purchase a condo in Bangkok. I did not. Probably should have as I would have done well on the unit with the change in currency valuations and upturn in condo prices. In hindsight I am glad I did not as there are too many situations where things go wrong in Thailand and as an outsiders one will naturally be at a disadvantage. While the government has never gone after the condo ownership structure of allowing 49% foreign ownership who knows when they might change their minds on that. The fact is that Thailand is not all that stable a country. Constantly changing governments, coups, and junta leadership every so many years does not lend itself to encourage me to put my money there. Seems to me the way to do things in the Thailand assuming one has the money to purchase a condo in Thailand outright, would be to buy property in ones home country for investment and use the rent to live in Thailand. Just rent so you can walk away from it at any time and with no problems. You've worked hard for your money so why take a chance on investing in Thailand. Let the big corporations do the investing, they have the lawyers, wherewithal, and knowledge to avoid the pitfalls of the small guy taking his life savings to live his dream in Thailand. Just rent!

[hawker9000]

I'm reading comments here such as "anybody who fell for that is a moron" and even worse comments as to the intelligence of people who chose to invest in property etc in Thailand (and any other country according to a couple of posters) I guess these are the people that could never affords to buy anything and rent 8000 baht a month places in the sticks, but that aside, what more can people do? They take advice from Lawyers (farang or Thai) who set up "legitmate ownership" systems etc. They then go personally to the Land Office - which is a government office, right? - and get everything processed and they walk away with ownership documentation from the government office to show they own this lease under the conditions set out by the lawyers. There a bunch of websites offering similar information. What more could a buyer do? Thai Lawyers, Farang Lawyers and government offices approve everything, so, what more can these guys do?

You are correct in your assumptions that all these people helping with the purchase/lease should know the laws/rules and be assisting with honest information. The point of this and many other threads shows that things in Thailand really don't work that way. Quite a number of years ago I was looking to purchase a condo in Bangkok. I did not. Probably should have as I would have done well on the unit with the change in currency valuations and upturn in condo prices. In hindsight I am glad I did not as there are too many situations where things go wrong in Thailand and as an outsiders one will naturally be at a disadvantage. While the government has never gone after the condo ownership structure of allowing 49% foreign ownership who knows when they might change their minds on that. The fact is that Thailand is not all that stable a country. Constantly changing governments, coups, and junta leadership every so many years does not lend itself to encourage me to put my money there. Seems to me the way to do things in the Thailand assuming one has the money to purchase a condo in Thailand outright, would be to buy property in ones home country for investment and use the rent to live in Thailand. Just rent so you can walk away from it at any time and with no problems. You've worked hard for your money so why take a chance on investing in Thailand. Let the big corporations do the investing, they have the lawyers, wherewithal, and knowledge to avoid the pitfalls of the small guy taking his life savings to live his dream in Thailand. Just rent!

While I agree that renting makes far more sense than buying, except for maybe the seriously wealthy & well-connected of course, it's not without its attendant risks also, from time to time documented here in the forums. I recall one case awhile back of a guy who had rented an apartment, went to open the window one day, and the window fell out (!), onto a car parked somewhere below. They were actually trying to hold him responsible for the damage to the car (and some pinheads - the usual apologist suspects naturally - here on the forum actually agreed)! Other stories of resident owners inconvenienced or disturbed by short term tourists renting from non-resident owners, bloodthirsty rental managers, etc., etc. Buying or renting; more power to you. But if you end up in most any kind of dispute, as a foreigner you'll have the odds well stacked against you either way (with the apologists here mindlessly chanting things like "love it or leave it", "you must integrate", "you do not understand 'thainess' ", and my personal favorite, "you must have brought it on yourself because this never happened to me"). (That last does have a certain ring to it, don't you agree?)

Edited February 27, 2015 by hawker9000

[LivinginKata]

A number of inflammatory posts have been rmoved.

Forum 7) You will respect fellow members and post in a civil manner. No personal attacks, hateful or insulting towards other members, (flaming)

[chooka]

Well I've said it before ... You'd have to be a complete and utter moron to buy property in Thailand. Who in their right mind would think about handing over 51% of their assets to what is little more than a nation of thieves?

It's a shame the UK, US and EU countries don't apply the same rules to Thais but of course we understand the importance of foreign investment and we also know that they can't dig it up and take it with them.

The other issue has for many years been pricing; in most cases the property market especially in areas such as Phuket, are so over the top it beggars belief anyone would think they are buying a home / villa or apartment of good investment value.

I honestly cannot understand how anyone could be stupid enough to buy property in Thailand ... there again the Nigerian 419 Scam continues to catch the very stupid and greedy and I can only conclude that the expats who brought property in Thailand fall into both categories.

I totally agree with this. What needs to be done is reform of property rights. I do not see a problem if you allow legal residence to own property here in Thailand Restrict it to residential housing. This will not only boost real estate prices in Thailand but also level the playing field as well. Thais can own land in most other countries MR Prime Minister

Your land ownership laws are archaic. If you retire or work here then its known people who own their own place look after far better then renters. Thais can own in other countries

Although this is not the route problem with Thai society it is a branch problem that needs to be addressed. Heck even if you are not a resident in other countries you can still own a house.

This is the 21st century and a global community Its time Thailand stepped up to the plate

Australia has just this week tightened up on foreign property buyers. Mainly aimed at the Chinese who are/were on a buying frenzy around Australia. Now foreigners have to pay a 5k application fee for properties upto 1m value and 10k for properties over 1m. If they buy for a private residence then it is the same as everyone else.

[chooka]

I'm reading comments here such as "anybody who fell for that is a moron" and even worse comments as to the intelligence of people who chose to invest in property etc in Thailand (and any other country according to a couple of posters) I guess these are the people that could never affords to buy anything and rent 8000 baht a month places in the sticks, but that aside, what more can people do? They take advice from Lawyers (farang or Thai) who set up "legitmate ownership" systems etc. They then go personally to the Land Office - which is a government office, right? - and get everything processed and they walk away with ownership documentation from the government office to show they own this lease under the conditions set out by the lawyers. There a bunch of websites offering similar information. What more could a buyer do? Thai Lawyers, Farang Lawyers and government offices approve everything, so, what more can these guys do?

You are correct in your assumptions that all these people helping with the purchase/lease should know the laws/rules and be assisting with honest information. The point of this and many other threads shows that things in Thailand really don't work that way. Quite a number of years ago I was looking to purchase a condo in Bangkok. I did not. Probably should have as I would have done well on the unit with the change in currency valuations and upturn in condo prices. In hindsight I am glad I did not as there are too many situations where things go wrong in Thailand and as an outsiders one will naturally be at a disadvantage. While the government has never gone after the condo ownership structure of allowing 49% foreign ownership who knows when they might change their minds on that. The fact is that Thailand is not all that stable a country. Constantly changing governments, coups, and junta leadership every so many years does not lend itself to encourage me to put my money there. Seems to me the way to do things in the Thailand assuming one has the money to purchase a condo in Thailand outright, would be to buy property in ones home country for investment and use the rent to live in Thailand. Just rent so you can walk away from it at any time and with no problems. You've worked hard for your money so why take a chance on investing in Thailand. Let the big corporations do the investing, they have the lawyers, wherewithal, and knowledge to avoid the pitfalls of the small guy taking his life savings to live his dream in Thailand. Just rent!

While I agree that renting makes far more sense than buying, except for maybe the seriously wealthy & well-connected of course, it's not without its attendant risks also, from time to time documented here in the forums. I recall one case awhile back of a guy who had rented an apartment, went to open the window one day, and the window fell out (!), onto a car parked somewhere below. They were actually trying to hold him responsible for the damage to the car (and some pinheads - the usual apologist suspects naturally - here on the forum actually agreed)! Other stories of resident owners inconvenienced or disturbed by short term tourists renting from non-resident owners, bloodthirsty rental managers, etc., etc. Buying or renting; more power to you. But if you end up in most any kind of dispute, as a foreigner you'll have the odds well stacked against you either way (with the apologists here mindlessly chanting things like "love it or leave it", "you must integrate", "you do not understand 'thainess' ", and my personal favorite, "you must have brought it on yourself because this never happened to me"). (That last does have a certain ring to it, don't you agree?)

That's why in some countries public liability insurance is compulsory for landlords.

[cookee68]

So the bottom line is that they bought shit, and own shit, don't you just love Thailand the land that loves foreigners, (sorry). loves to screw foreigners,

[MRGTINGTONG]

I see a major devaluation of property prices here, starting now.....

[roath]

It is really quite simple. Foreigners can not buy, own, inherit or even take a mortgage on Thai Land. Any lawyer that offers any "structure" or otherwise is complicit to breaking the law. Nominee in any format or arrangement is also illegal.

There is also this strange phenomenon in Thailand where foreign buyers take their legal advice from a lawyer recommended by the vendor?

Of course there is always the 40 million baht option.

You are incorrect about being able to inherit land. You can but there are restrictions as you need to dispose of it within 6 months. Likewise you can take a mortgage but the Land Office may refuse to register it.

[roath]

Makes somehow sense that this secured 3x30 year leases are on shaky ground, but to say the registered first 30 years are illegal as well is just a patriotic BS interpretation. If it was registered by the Land Office it is legal, if the governement registered something illegal then they should be held responsible and provide a solution.

If the purpose behind the regisration was misdeclared or withheld then the registration wouldnt be effective and the Land Office wouldnt be at fault. This would be the same in any country. I am not standing up for Land Office though (at which I have experienced corruption first hand) but registration per se would not be the end of the matter if other issues are at play.

[Whyamiandwhatamidoinghere]

Did you really think you owned anything with all your posturing? Why in the hell would anyone buy property in Thailand when it is more than obvious that legally you can't. In the end you either going to get cheated by your young Thai wife and her boyfriend, who incidentally made no financial contribution to obtaining said property; or shafted by the courts who want to undo your getting around the loopholes.