Need help with house buying

[cheng]

My husband & I are planning to buy a holiday home in Hua Hin, and hope to get some useful advice and guidance from some experienced members who've tried it.

Our first question is estate agents. We've been on the net and found some really nice properties that we're really interested in. But how do we know if these estate agents are reliable and honest? Is there anywhere online one can get a list of not only registered agents, Owners Abroad Thailand, Premier Property Center, Siam Property, TH Property, Hua Hin Thai Property, Hua Hin Property & Star Property. Do any of you have any experience with them or can at least tell us if they can be recommended or not. We're not asking for some mud-casting statements, but being a stranger in the country we'd appreciate some advice.

Second question concerns legal matters. Who draws up the contract? How do we as foreign buyers without any knowledge of the Thai language ensure that the contract as it should be? We were thinking of getting our own lawyer to go through the papers, but how do you find a reliable and reasonably priced one? Any recommendations here?

Lastly, are there anythings that we should be aware of? As we only plan to use the house when we're holidaying there, we plan to rent it out the rest of the year. Any suggestions/recommendations as to how we go about doing this?

Thanks a lot for 'listening' and whatever support that you can offer.

[buksida]

Welcome to the board ... you'll probably get a hundred PM's now!

Can't answer your questions direct and some them maybe a little difficult due to the board's terms and conditions which forbid the slander or promotion of real estate agents on here.

Good luck in your search though, have a read through some of the existing threads on property and legal stuff - they should start you off in the right direction.

[Onlyme]

Just thought I'd resurrect this old chestnut for any newbies.
Hope this helps in some small way.

Here's a few things you ought to know before buying anything in Thailand!

Below are a few insights into trying to buy property in Thailand.



A loophole is an action which violates the spirit of a law while complying with the letter of the law. A good example of this was the never ending 30 day visa run. Although it was never the intent of the Thai Immigration to allow this it was never expressly forbidden and was therefore legal. This was a loophole and it has been recently closed.

READ THE NEXT PARAGRAPH VERY CAREFULLY!!!!!

As for land ownership through a company this action violates both the spirit and the letter of the law as it is expressly forbidden to use Thai nominee shareholders to act as ghost investors to allow a Farang to own land. This is not a loophole, it is simply committing a crime. In addition in order to make this work the Farang must commit a series of felonies including conspiracy, racketeering and multiple counts of fraud. The worst case scenario is multiple years in prison and large monetary fines.

Below is a bit of good info, only my opinion.

My advice would be to take some time to look into the legal problems and to allow the current political mess in Thailand to settle down before buying anything in Thailand.

As has been noted above, there are significant legal problems with owning property in Thailand. Even ownership of condominium units is risky where there are limits to the % of foreign ownership of the whole building (How are you ever going to know that the total % of foreigners does not exceed the limit).

More Risky that Thai Law are the property developers and sales people who will quite frankly tell you a crock of shite in order to get you to buy.


So please, proceed with caution and take time to build enough knowledge to be able to discern the bullshit that is spread on this subject.

Some Particular Concerns

The only legal way to control land and hence a house in Thailand is through a lease or a Usufruct. The only truly legally way to do this is to give a Thai citizen the money to buy the house, and then they lease it back to you. A 'lease' has a maximum tenure of 30 years and is taxable on two counts (Registration Tax + Tax of the full lease value - the rent you will pay for the lease). A usufruct is valid for the life of the leasee, and has a lower tax, but it is not wholly legal to use a usufruct to build a house (Usufruct is essentially for leasing land for farming purposes).

A lease can have a clause that the leasor and leasee agree to consider an additional 30 year extension, but this is not binding on the leasor, nor on his/her heirs.

The company route
Quite simply it is illegal to set up a company with the express purpose of owning land. Added to which the company must be controlled by a majority Thai ownership and then add to this that the government are now testing these arrangements by asking the Thais to demonstrate where they got the money from to buy your house.

It is a mess and I have a very good friend who has bought two houses this way. He bought the first, and then built the second intending to sell the first as soon as the second was complete. He cannot even get people to view the house he wants to sell.

While the government enforce the law (which was always the law but perhaps not enforced) thousands of expats are sitting on 'Investments' that are worth nothing.

Protecting Your Rights to your property

There is a golden rule of investing in Thailand Do not bring any money to Thailand that you cannot afford to loose, this is especially true of money invested in property.

Where I lived in Narklua there were twelve houses, eight of which had been bought/built by foreigners, all where now in the hands of Thais, only one of those transfers happened with the willing agreement of the foreigner - non got any of their money back.

OK, you can argue that those where Thai/Foreign relationships - but all the methods of buying a house in Thailand, legal and otherwise are 'Thai/Foreign' relationships.

Inheritance
If you have any children/grandchildren then you may very well want to leave them your house in Thailand, or the money from your house.

This is almost impossible, the only legal way to control the house is through a lease and the lease dies with you. (an Usufruct with a management clause that allows you to lease the house ‘might’ (but by no means certainly) allow you to lease the house to your children for thirty years, there after its reverts back to the leasor (The Thai you bought the house for).

Divorce
Do not rule this out, and don’t be offended at the suggestion. Unless you are really rock solid you are taking an increased risk of divorce in moving to Thailand and in truth making the same mistake that many foreign men make when they move to Thailand and buy land/property with their Thai wife/girlfriend – Namely putting their financial well being into the same basket as their relationship.

Yes you do that back home, but back home you are provided with a raft of legislation protecting your rights to property, wealth, pensions.

I would advise any western woman who is considering moving to Thailand with her husband (western or Thai) to take legal advice on the full spectrum of protections they are giving up if they move any substantial part of their wealth to Thailand.

Other Uncertainties
To my mind the big problems are only going to get worse. The whole of Thai society is sitting on knife edge. The current government is getting more wobbly by the day and the recently removed prime minister is by no means out of the picture. Troubles in the South are clearly not getting better.

Given all this I would not rush to buy property that in any case you can't actually own.


With a bit of luck the laws will change and you might want to get in the market if they do. Alternatively you might find somewhere else you like, things change like that.

If you are, or your parents are thinking of buying property over here.
Please get them to take off the rose coloured spectacles, stay away from property developers (especially fallang ones) and stick with buying a condo (read above about condo's) or, renting!


I only hope this post saves one person or an unsuspecting couple not to loose their life savings.

Onlyme.

PS.
Sorry for re-posting this but, I like to give new members a perspective on
the truth.

[Wanderlust]

OnlyMe,
A good post that does give prospective buyers something to think about; however the comeback is to ask how many people who have bought via the company route have actually lost out? Fortunately that 'loophole' is now not being pushed any more, but it is true that most problems with land ownership can normally be solved with some extra payments - and it is an important point that the issue is land and not the actual property on it. I think most agents are now advising the lease route, with an option in the contract to convert for no extra charge if the law changes, and for most foreigners buying here that will be fine. The risk you infer in buying a property with your Thai partner is no greater than it is in most western countries, and is less in some cases, as under Thai law both husband and wife get 50% of the marital possessions; the only drawback for foreigners is that as they are not legally entitled to own land they have a limited time to dispose of it, which also applies if their spouse dies. All in all the situation is neither as black or white as some like to paint it, but then again that is the same for most things in the Land of Smiles!

[Onlyme]

Wanderlust.
It's not so much, how many buyers have lost out by going down that route.
How many buyers have sold?
I know of a few people who bought properties through that scam, they have since died, as far as I know some of those properties are now occupied by Thais.
I know, their children/ next of kin have not received 1 baht!
Onlyme.

[Norseman]

I'll let you know when I loose my house OM.
I'm still paying my taxes and everything looks just fine at the moment.
The funny thing is that not one single official from either immigration, Tessabahn, Land office, Ministry of Home Affairs or anybody else has informed me that I'm not the owner of my house.
Only other farangs keep on telling me (us) that.
No sleepless nights yet!!

I think you need to spend some days here Chang.
Rent a car or Tuk Tuk and travel around in the area.
Talk with people and other house owners about their experiences before you make any decisions.

[splitlid]

agents are agents at the end of the day.some good some bad, there is however no governing body under which they are regulated. so go with a gut feeling, and recommendations. so sorry cant really help.

but i can help you with your other questions.

normally the seller will provide you with a contract in english and thai, which will then be checked by yourself and your lawyer, add things or take things out at your lawyers advice.

lawyers in HH will charge about 30-40k to sort out all your necessary paperwork to do the transaction and will goto the land department to do the change over with you or on your behalf, they will also perform a title search on the land to ensure that it is ok.

2 lawyers in HH i have used in the past are:

siam firm inter laws
www.siamfirm.com
hua hin soi 47/1

and

chavalit and finch
www.chavalitfinchlaw.com
hua hin soi 19

both are ok

[crazy88]

Wow onlyme

You certainly know a few horror stories .I agree with your 100% accurate statement that foreigners cannot own land .It is true .Also that a company setup must be done properly ie your shareholders must have the relevant funds and then the LEGITIMATE above board company can own land .Those who thought they would save a few quid by going to a back street accountant and having some rice farmers as shareholders are,of course breaking the law .

I have little experience with usufructs but please read this

http://www.isaanlawyers.com/Usufruct%20 ... ailand.pdf

I hope this is of help and would like to hear feedback from any legal people on this .

You have obviously had some bad experiences,as have people you know it would appear but I fail to see the need to lump ALL persons involved in real estate as cheats and crooks .If I were to suggest that ALL bar owners were alcoholics that cheated their customers, in such a manner ,would it not be considered abusive,untrue and probably against terms and conditions of the forum ?

Regarding people reselling an example .My friend and his Thai wife are picking up a cheque at the lawyers office today for the balance of their sold house .Cost 4.8m sold 8.9m after 4 years .I know of literally hundreds of other examples in Hua Hin alone .Whilst he was doing so I was in my swimming pool which is owned under a legitimate company (the land,not the pool).I had it fully checked at the land office a couple of weeks ago when the land title was changed to chanote and there was never any mention of any brown envelopes or tea money .Just 110bt stamp duty .

The OP should do the homework and use a lawyer before making a decision of course .I did, and advise all to do the same .

Crazy 88

[caller]

Regarding people reselling an example .My friend and his Thai wife are picking up a cheque at the lawyers office today for the balance of their sold house .Cost 4.8m sold 8.9m after 4 years .I know of literally hundreds of other examples in Hua Hin alone .

Crazy 88

This is where it gets so confusing for the rest of us. We hear that the market is stagnant, we hear the horror stories, some with clients and agents named (these can be found on the net and in some local publications). Then we hear of 'literally hundreds' that have happily sold for huge profits, as above.

Which is it?

The personal advice I received from someone who I regard as a reputable agents a few months back, was to sit tight and see how things pan out.

That still seems sound advice to me.

[STEVE G]

Obviously there is a huge difference between those who bought four years ago and the potential profit in the next four years, and I think that applies pretty much for buying property worldwide.
As Onlyme points out above:

There is a golden rule of investing in Thailand Do not bring any money to Thailand that you cannot afford to loose, this is especially true of money invested in property.

[Super Joe]

As for land ownership through a company this action violates both the spirit and the letter of the law as it is expressly forbidden to use Thai nominee shareholders

30 year leases on the land or lifetime Usufructs are used these days.

Even ownership of condominium units is risky where there are limits to the % of foreign ownership of the whole building (How are you ever going to know that the total % of foreigners does not exceed the limit).

Not risky, foreigners can buy direct freehold in a condominium but limited to 49% of the units (by area). You receive a certificate from the developer stating you are one of the 49% which the land office recognises when registering your title at the land office.
There are also condominium buildings that have the right under the law to sell 100% of the units to foreigners.

The only legal way to control land and hence a house in Thailand is through a lease or a Usufruct. The only truly legally way to do this is to give a Thai citizen the money to buy the house and then they lease it back to you.

What? You buy a property off a developer or resale, included in the overall sale price is the cost of leasing the land. You the foreigner own the house on the land 100% outright.

A usufruct is valid for the life of the leasee, and has a lower tax, but it is not wholly legal to use a usufruct to build a house Usufruct is essentially for leasing land for farming purposes

Extract from Thai law codes: Section 1417 An immovable property may be subjected to a usufruct by virtue of which the usufructuary is entitled to
the possession, use and enjoyment of the property. He has the right of management of the property.

It is a mess and I have a very good friend who has bought two houses this way. He bought the first, and then built the second intending to sell the first as soon as the second was complete. He cannot even get people to view the house he wants to sell.

Nonsense, you can sell your Limited Company house without even attending the land office by share transfer to the new owner. If new owner does not want the risk of Limited Company (nominee issue) and wishes to lease, then guess what ..... you go to land office and transfer land title deed from company to the Thai that the buyer wishes to take out his lease with, 100% legal and takes an hour.

While the government enforce the law (which was always the law but perhaps not enforced) thousands of expats are sitting on 'Investments' that are worth nothing

This will be confirmed on any barstool in town. But here's the Governments take on it, Quote from Thai Land Code:
Section 6. if an alien, who is granted permission to acquire such land, does not comply with the rules and conditions specified, he/she shall disposes of such land in the portion of his/her possession wit the period of time specified by the Director General of the Department of Lands which shall be not less than one hundred eighty days and not more than one year. If the time limit elapses, the Director General shall have the power to dispose of such land.
Furthermore, Supreme Court decisions have already held that in such cases, the proceeds of the disposal (by Government) belong to the alien.
If they bought this in it takes 1 hour at the land office to 'dispose' of your company land into a 100% legal land lease from a Thai.

Inheritance
If you have any children/grandchildren then you may very well want to leave them your house in Thailand, or the money from your house.
This is almost impossible, the only legal way to control the house is through a lease and the lease dies with you.

Jesus Christ. You make a will to leave whatever to whomever, like the shares in your company. The lease does not die with you. The law states the lease dies with you unless otherwise included for in the lease contract (Section 544 of Thai law codes). Lawyers insert this clause into the lease agreement. You can even list the names of the persons you wish to inherit your lease in the lease contract, then your heirs does not even need to attend the land office to register their names.

an Usufruct with a management clause that allows you to lease the house might (but by no means certainly) allow you to lease the house to your children for thirty years, there after its reverts back to the leasor

Agree not a certainty, but it has been tested and Supreme Court ruling 2297/1998 permitted it. Another judge may change that ruling ofcourse but they often assume the precedent.


OP, come over, rent for 6 months, see various lawyers to get best protection, then decide what you want to do.
Good Luck,

SJ

EDITED: Re: Land office not accepting Limited Company registrations.

[crazy88]

Well replied SJ but I must inform you that I obtained a chanote in a company name within the last 2 weeks .The Thai shareholders were not present and we supplied no information regarding financial status .If asked the shareholders could easily have provided income proof between them to cover the land value .All are Hua Hin residents .I am not sure which officer we dealt with but will PM you when I find out .

Crazy 88

[Super Joe]

Thanks Crazy, we had this conversation before, the new boss told my wife no more and you said you'd bet they will carry on with them. Good call.

SJ

[icebear]

agree with the comments 'come over and rent' and make your choice when you're very sure...

[CraigDunn]

Cheng,
Go out with some agents (rather than tuk-tuk drivers) and see some properties, get a feel for things. Then speak to a lawyer or two to further develope your understanding. There are few professionals on this board and a lot of info posted here is inaccurate and/or out of date.
SJ makes a lot of sense.
OM - your statement
"More Risky that Thai Law are the property developers and sales people who will quite frankly tell you a crock of shite in order to get you to buy.
" needs to be qualified ... there certainly are some charlitans in Hua Hin, but there are several good folks in this business too and it is at least unfair, probably libellous, to tar all with one stroke of a wide brush or a poisoned pen.