Court voids 'secured' foreigner property leases

Ask here about the pleasures and pitfalls of buying, selling or renting property and real estate in Hua Hin. Building, design and construction topics welcome. Commercial or promotional posts for real estate companies or private properties are forbidden.
User avatar
richard
Deceased
Deceased
Posts: 8780
Joined: Tue Feb 18, 2003 1:59 pm
Location: Wherever I am today

Re: Court voids 'secured' foreigner property leases

Post by richard »

christopher1 wrote:
I think there has been increasing pressure by the Thai elite and generalissimos to get rid of foreign owned businesses and the foreigner influence in Thailand.
Could always start with the Chinese!
Really?

Most Thais have Chinese blood in them and I wonder how much property/land is owned by Thai/Chinese anyway
RICHARD OF LOXLEY

It’s none of my business what people say and think of me. I am what I am and do what I do. I expect nothing and accept everything. It makes life so much easier.
HHTel
Hero
Hero
Posts: 10806
Joined: Mon Feb 12, 2007 7:44 pm

Re: Court voids 'secured' foreigner property leases

Post by HHTel »

Yes. Only after wedlock. Property bought before marriage is sin suan tua (personal property).
taffinexile
Member
Member
Posts: 52
Joined: Wed Oct 29, 2008 1:47 pm
Location: England

Re: Court voids 'secured' foreigner property leases

Post by taffinexile »

Looks like I was lucky. I had one of these agreements at Banyan. All the problems that followed look minor to this. At least I got all my money back except a years rental, but this was more than covered by exchange rates. Thai law is a mine field, but there again the Spanish system is just as bad where properties are bulldozed and land seized years after deals have gone through.
In my time of dying all want for you to do is take my body home..... so I can die easy
User avatar
margaretcarnes
Rock Star
Rock Star
Posts: 4172
Joined: Wed Jan 02, 2008 8:28 am
Location: The Rhubarb Triangle

Re: Court voids 'secured' foreigner property leases

Post by margaretcarnes »

buksida wrote:In a shock decision by the Phuket Civil Court, backed by the Region 8 Appellate Court, it has been ruled that so-called “secured leases” offered by some real estate developers to allow foreigners to secure a cast-iron 90-year lease are not valid.

The case is now to go to the Supreme Court. If confirms the lower-court opinions, then not only will any renewal term of "secured" leases by foreigners be invalid, but also the current lease terms.

The Phuket News' legal correspondent, Jerrold Kippen, has revealed that not only has the structure been ruled invalid but the courts' decision may mean that the original underlying 30-year lease, even if registered with the Land Office, is now void - it never existed, leaving the buyer with two handfuls of nothing.

Mr Kippen explained, "as a general rule foreigners cannot own land and apartment units, but it is possible for foreigners to lease them and that is the reason why these are commonly marketed to foreign buyers on a leasehold basis.

30 years maximum

"Under Thai law the maximum lease term is 30 years, which may be renewed upon expiration of that term," he continued. "The leases marketed to foreigners typically provide for an initial 30-year term plus two additional successive 30-year renewal terms."

However, Mr Kippen noted, "the renewal of a lease in Thailand is by no means assured even if it is provided for in the original lease agreement."

He explained that in order to overcome this issue the "secured" or "collective" lease was devised and marketed to foreigners. This is meant to ensure that the lease is renewed, twice, as originally agreed.

The way this "security" is supposedly provided is by the buyer not only entering into a lease agreement with the Thai company that owns the developer's land/apartment, but also entering into a share-sale-and-purchase agreement for shares that control the Thai company that owns the developer's land/apartment.

Now, however, two Thai courts have concluded that the "secured" lease is "void" as a matter of law. A contract that is found to be void is considered never to have existed.

"This would be the case regardless of whether such a lease was already registered," Mr Kippen said.

"Why? Because a finding that a lease is void means that it never legally existed and, therefore, as far as the law is concerned, a void lease cannot be, nor ever could have been, registered," he explained.

"Even if the legally void lease went through the Land Office formalities of registration, with registration fees paid, papers signed and stamped by the land officials, it simply does not change the legal non-existence of the void lease because, legally, nothing happened by such acts."

In the test case now headed for the Supreme Court, the buyers entered into the project's "secured" lease structure. Leases, in this case for apartments, were registered several years ago.

The lessees filed a civil case against the developer of the project in the Civil Court to protect their leasehold rights. 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.

Full Story: Bangkok Post

More: http://www.phuketgazette.net/property-l ... -you/27846
Nothing surprising there at all. We all know that any lease in Thailand is restricted for foreigners. And IMO rightly so - and it isn't the only country to have strict rules on the ownership of land. There are many people in the UK now who would love to see the same restrictions apply here, but unfortunately in the UK money speaks to the exclusion of all else.
As the last poster pointed out there are even problems within EU member states - specifically Spain. For anyone buying or leasing property anywhere it is a case of caveat emptor. Perhaps in Thailand that should go further -never buy in the first place.
PS well done Tel!
A sprout is for life - not just for Christmas.
Takiap
Rock Star
Rock Star
Posts: 3550
Joined: Sun Apr 09, 2006 1:55 pm
Location: Bo Fai

Re: Court voids 'secured' foreigner property leases

Post by Takiap »

I've seen mention in this thread that foreigners cannot own apartments????? I though Farang could legally own apartment?


As far as a long term lease is concerned, I've never seen the point really. You basically pay the full sale price to have the property for a certain period of time, and then the property is once again owned by a wealthy developer. Why not buy the property in the name of a needy Thai person and then simply sign a usefract agreement which legally allows you to live in the property until you die. When that time comes, the property can then potentially help a family improve their lives, rather than increasing an already swollen wallet of a developer.

Alternatively, if you are going to lease, why not just rent? It would surely be a lot cheaper, considering the fact that many expats are not very likely to be here for 30 years or more given their present age?


:cheers:
Don't try to impress me with your manner of dress cos a monkey himself is a monkey no less - cold fact
hhinner
Rock Star
Rock Star
Posts: 4291
Joined: Fri Nov 09, 2012 2:17 pm

Re: Court voids 'secured' foreigner property leases

Post by hhinner »

margaretcarnes wrote:
Nothing surprising there at all. We all know that any lease in Thailand is restricted for foreigners.
Not sure what you mean by restricted Margaret. Lease law is the same for Thais and foreigners alike - 30 years maximum.

Section 540. The duration of a hire of immovable property cannot exceed thirty years. If it is made for a longer period, such period shall be reduced to thirty years. The aforesaid period may be renewed, but it must not exceed thirty years from the time of renewal. From http://www.thailandlawonline.com/civil- ... perty-laws.
jungle
Member
Member
Posts: 94
Joined: Tue Jul 12, 2011 8:43 am

Re: Court voids 'secured' foreigner property leases

Post by jungle »

the way i looked at it was" i have a lease for 30 years, i have a signed contract with the land owner for a further 30 + 30 years. so in 30 years or so, if laws have not changed a thousand times, i would probably have to go to a Thai court to fight the owner to honor her contract, or may be not, everything may go fine with no problems." the thing is i think you have to understand that before you buy.
saying that not sure most modern thai houses will last 30 years.
jungle
Member
Member
Posts: 94
Joined: Tue Jul 12, 2011 8:43 am

Re: Court voids 'secured' foreigner property leases

Post by jungle »

on another note. what would happen if in 30 years if you could not afford the lease for a further 30 years. what would happen to the house, who would it belong to ?.
PET
Legend
Legend
Posts: 2120
Joined: Mon Jun 25, 2007 4:24 pm
Location: Hua Hin

Re: Court voids 'secured' foreigner property leases

Post by PET »

jungle wrote:on another note. what would happen if in 30 years if you could not afford the lease for a further 30 years. what would happen to the house, who would it belong to ?.
It would revert back to the LESSOR.
Courage is grace under pressure and when circumstances change you change your mind.
User avatar
Khundon1975
Rock Star
Rock Star
Posts: 3462
Joined: Wed Jan 14, 2009 4:05 am
Location: Boo, I'm behind you.

Re: Court voids 'secured' foreigner property leases

Post by Khundon1975 »

This ruling does not surprise me in the least. The law is clear on these 30+30+30 leases.
What does surprise me, is why so many people were taken in by unscrupulous developers and lawyers, when buying properties in Thailand through this lease system.

Just a few clicks on Google and there is a wealth of information on these 30+ year leases that has been posted on numerous forums for many years.

When buying any property/business in Thailand, the golden rule is, if in doubt, walk out.

:cheers:
I've lost my mind and I am making no effort to find it.
User avatar
Bristolian
Deceased
Deceased
Posts: 3128
Joined: Fri Nov 09, 2012 1:38 pm
Location: Hua Hin & Bangkok

Re: Court voids 'secured' foreigner property leases

Post by Bristolian »

^^ GLCQ a is legally correct. A foreigner can not fund a house purchased by any Thai. However this is a part of the law, like many others, that is not enforced. I know of one foreigner who having broke up with his Thai partner used the law to force the sale of their house. Yes he managed it and got back the 50% on the basis of his marriage break up.
"'The two most important days in your life are the day you are born and the day you find out why." - Mark Twain
HHTel
Hero
Hero
Posts: 10806
Joined: Mon Feb 12, 2007 7:44 pm

Re: Court voids 'secured' foreigner property leases

Post by HHTel »

GLCQ a is legally correct. A foreigner can not fund a house purchased by any Thai.
Except in marriage as has already been stated:
Section 1474. Sin Somros consists of:

(1) property acquired during marriage;
(2) property acquired by either spouse during marriage through a will of gift made in writing if it is declared by such will or document of gift to be Sin Somros;
(3) fruits of Sin Suan Tua.


In case of doubt as to whether a property in Sin Somros or not shall be presumed to be Sin Somros.

'Fruits of Sin Suan Tua' means that if either party had a business or property before marriage , for example, the income from the business or the appreciation of property (profit) becomes Sin Som Ros and is equally divided between both parties.

Believe it!
User avatar
Bristolian
Deceased
Deceased
Posts: 3128
Joined: Fri Nov 09, 2012 1:38 pm
Location: Hua Hin & Bangkok

Re: Court voids 'secured' foreigner property leases

Post by Bristolian »

^^ I stand corrected...Thanks

"The Thai spouse of a foreigner can purchase land but he or she must show there is no foreign claim to the money. While a foreign spouse can give the money to their Thai spouse they will most likely be required to sign a paper at the Land Office stating they make no claim on the money or the land, that it is personal property (Sin Suan Tua) and not common property (Sin Som Rot).

This can also be recorded at the Thai Embassy overseas if the foreign spouse is overseas or by a qualified notary.

The Thai spouse is the sole owner of the land and can mortgage, transfer or sell it without requiring the permission of the foreign spouse as it is not joint marital property. It is only the land that this regulation applies to and not any structures built jointly upon the property"
"'The two most important days in your life are the day you are born and the day you find out why." - Mark Twain
HHTel
Hero
Hero
Posts: 10806
Joined: Mon Feb 12, 2007 7:44 pm

Re: Court voids 'secured' foreigner property leases

Post by HHTel »

Not quite sure where you got that from Bristolian but it's not the law. The document that is signed at the land office has no legal standing in court and indeed has been refused to be entered into court proceedings by many a judge, including mine.
User avatar
Bristolian
Deceased
Deceased
Posts: 3128
Joined: Fri Nov 09, 2012 1:38 pm
Location: Hua Hin & Bangkok

Re: Court voids 'secured' foreigner property leases

Post by Bristolian »

^^It was a direct quote from Sunbelt Legal Advisors
http://www.sunbeltlegaladvisors.com/pro ... -thailand/
"'The two most important days in your life are the day you are born and the day you find out why." - Mark Twain
Post Reply