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LEASE LAWS IN THAILAND:

Foreign businesses can feel relaxed now as the Act Governing the Lease of Immovable Property for Commercial & Industrial Purposes has increased from 30-50 years & allowed lease rights to be mortgaged as security. For investors this means: a longer lease can accommodate long term business planning & the right to mortgage the lease as security in order to receive finance. Financial institutions can benefit because they can take a lease right as security.

Regulations: 50 yrs now. Only applies to immovable property for commercial & industrial reasons. Only the owner can lease it. Lease must be in writing & registered.

 

The Government Gazette : says the business must have one of the following.

1/. Commercial business with at least 20m baht in investment

2/. Industrial businesses qualify for promotion under the Investment Promotion Act.

3/.Other commercial or industrial businesses beneficial to the economy. property leased must be located in industrial are as set out in the City Planning Act or the Industrial Estate Authority of Thailand. Land Dept must approve leases over 100 rai. Foreign leases must comply as well with the Foreign Business Act. Leases can be renewed after 50 years for another 50 years. If the lessee dies the inheritor can take over. The lessee can sub lease or transfer lease rights, either wholly or in part, to a third party.

MORTGAGE OF LEASE RIGHT:

Since a lease right can be mortgaged, if the debtor defaults on payments the lease may be seized & sold at a public auction. Mortgagee may claim: 1/. The debtor has failed to pay interest for 5 years; 2/. Mortgagor hasn't satisfied the court that the value of the property is greater than the amount due & 3/. There's no other registered mortgages or preferential rights on the same property.

 TO LEASE A  HOUSE & TO LEASE LAND:

 We firstly check the title Deed & check any liens on the said property. Then we take the lease to the Amphur together with the nor sor sam or Kanut and have it registered. It is then stamped & the land cannot then be sold unless the lease is cancelled. A lease without doing this is useless. The first lease should be done properly by a reliable lawyer. ( We charge 10,000 baht if straight forward and not no travel costs ). Most wives would agree to these procedures by explaining to them that if they died, they would not want their husbands thrown out!  You can also sell a lease.

DOING IT YOURSELF: You can register a 30 years lease at the land department yourself and amend it but most times you may be better to use a lawyer as the lease will be in Thai. If you cannot speak or read Thai then you may not even know what youre signing so play safe and use a lawyer for every contract for your own good. Your name will appear in the title and no one can cancel your lease.  

LEASING VIA A LOAN TO YOUR COMPANY:

This is an excellent way to lease if you have a company. An owner takes a lease out on a particular piece of land he wants to own with his own money? he loans his company money to buy the land and the lease in effect is owned by the company via the buyer. This then becomes an asset of the company and can be depreciated from his or her share registration & paid back at the buyer's pleasure.

On March 3rd 2000 the Thai Foreign Business Act of 1999 took effect. (FBA). This replaced the old Act of 1972.In a company you need 7 partners but you can according to the investment control 100% via B.O.I. (Board of Investment). However a normal 2m baht Thai Company foreigners can have 6 foreign shareholders & 1 Thai but the Thai holds 51% shares. We can however safeguard your interests but always its best to have 2 or even 3 Thai owners. We can help you form the company and take care of all steps for you plus search the Title Deeds & any other request like making sure their is no lien on the property. 

 

THAIS MARRIED TO FOREIGNERS - the answer to your land buying problems?

BOI allows foreign companies to own land, usually factories. Don't forget the Treaty of Amity, which virtually gives Americans the right to own 100% of a company doing business in Thailand. The Japanese use nominees a lot. There are people that buy in someone elses name and put a mortgage on the property for the purchase price to protect their interest. There are also concurrent land leases that can be set up, as there is no restriction on foreigners owning buildings (40% of a condo complex) and lastly theres those who trust their wife or friend & use their name. Laws are worthless without enforcement, & Thailand practices "selective" enforcement. Foreigners can buy property in Thailand & please use a lawyer as sometimes Title Deeds are false, or the building you buy is not on the deed or the land has encroached on other land.

Most farangs use their Thai wife and give property rights to them. But if not married to a Thai lady then you can have a 30 year rental. Rental total fee equals the purchasing price.  The rental-contract is written in English and acknowledged by a lawyer. This deal is a person-to-person basis. Problems may arise at expiry date between heirs of both parties.

1/. Be careful. Check utilities as sometimes theres no phone lines & never believe it until you have written proof of phone lines are going in.

2/. Learn which areas flood and which don't. A developer will not tell you. Don’t listen to pub talk. Rent before buying if you have time or ask the neighbours.

3/. A land lease NOT filed with the land department (and 1% fee paid) is only valid for 3 years regardless of the term of the lease. All lease for a period over 3 years MUST be registered at the Land Office and written in Thai. You have also to pay fees calculated on the TOTAL amount of rent agreed upon and for the full period (eg.: rent 1000 baht x 12 months x 30years = 360.000 baht)

4/. Check out the history of the area and talk to the neighbours where you want to buy.

5/. Ask the Land Dept if there are any proposed additional road works or projects in this area in the distant future.

6/.If buying any house/ land check out the title or "chanote". Never buy or pay a deposit down until you have a clear contract and there is indeed a title. Again never listen to a sales rep in a moo baan that the title is going thru or will be available after 3 months --- chances are there will never be one. They just want the commission.

7/. Most deposits are non refundable.

8/. If obtaining a loan make sure you have before you place a deposit or down payment.

9/. If you told that there is only one unit left in the Estate forget buying.

Those who want to sign a lease-contract and don't want to register it, should know that such a contract is automatically void at the death of one of the signatory (this means that such a contract is NOT transmissible without prior agreement of the other party.)

While a contract registered at the land office is transmissible & if one signatory dies, & the contract is not cancelled, the heirs of the estate have to respect it. This is Ok if the lease is transferable and every time a transfer is made, the Land Office must be notified.

If no record of your lease with the developer, then any private agreement between the 2 parties will not be legally binding. If the developer wants to play you out, he can. The Land Office uses only one language - Thai. Even your name in the contract has to be in Thai. The "fee" is actually government tax & you pay the Land Office equivalent to a little under 5% purchase price. A developer may want a "deposit" equivalent to 1 year's maintenance fees. They say you recover this amount from the person who buys the property from me. But ask your Thai neighbours if they pay it as you will find they don’t- its rubbish. Confusing-------- thats why you need our law office

WHAT WE ARRANGE:

Our company can setup your company using our Thai lawyer or formulate leases, agreements etc that suit your situation.  If wanting to purchase or lease land do not sign any forms until you talk to us, but please obtain a Title Deed and have it searched. We initiate an investigation of your Title Deed for you and we give you a full Court/lien & ownership report for your situation, in English.

. If you want a company or work permit we give you a step by step English translation guide on all the steps we take for you, ensuring full confidence in our services. There are no hidden costs. Remember you do not need a work permit if you are not going to work or are only coming to Thailand to retire in your house otherwise you need a 2 million baht company min and must show the 2m baht. You can now open a 1m baht company. Total costs for this is 35,000 baht including VAT for a standard 2m baht company. However you will need an "O" non immigrant visa or "B" non immigrant visa if working in Thailand which you can obtain after your company is formed. After one year in business we can then assist you to obtain a 1 year visa in Thailand. For further information on Visas go to [ THAILAND VISAS ]. Do not start a company if you cannot or do not think you will make a profit after 3 years.

We arrange a 30 year lease & assist with renewal and prenuptial agreements to cover you while you are alive. This is sometimes preferable then buying a house and condo using a company. Again we arrange with our Thai lawyer all the work for you.

Our law office below & any further information please send to us.To those who are affected let us know. Complete discretion assured.

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N.B. Complete law services via our NEW Thai Lawyer partner . (re: Alien Business Law: NEC Announcement 281 Cat A prohibited to foreigners). However under the terms of our  Company License Asia Trading Post (Co Ltd)  provide : 1. Cat 34 lawyer services  &2.  Cat 35.consultancy services.

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