coolthaihouse.com blog

some thoughts from Dozer
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Lawyers and Real Estate

Lawyers and real estate. At one point I had a pretty good Thai lawyer, but now she is so busy, on the last transaction I was left dealing with the staff — who are paralegals. They finally got the job done, but it was a painful experience. After that I decided, the next go round it is on to a new lawyer.

I don’t want to give you the impression it is more complicated than it is. I do some various business things and now am considering doing a fairly big real estate project. For the simple home purchase, the legal setup is pretty painless.

Back to my scenario. I do use a Thai company as I think it is the best method of land ownership available to foreigners. Also, a side reason for me, is that I have some other business interests, so I need a Thai limited company anyway.

The recent lawyer interviews are just starting. It is relating to an upcoming 6 rai project I’ll hopefully be doing (if I can find the land). We started last Friday just going in cold and interviewing the lawyer. My wife goes also as she is an integral part of the whole show. I do find it a minor annoyance when I discuss issues with the lawyer in Thai and they respond I can track with them. When the wife goes, sometimes the lawyer will end up just talking to her and kind of leave me out of it. I can follow about 90% of it, she seems to be getting 100% of it. If it was me alone I would get clarification. Anyway, with her there sometimes I just nod along as she absorbs some points I don’t get. Come to find out, invariably there will be some things about what was said that are still a little unclear. That is the reason most of the time I do the lawyering myself. By the way, if you don’t speak Thai it is generally not a huge problem, most Thai offices will have some English speakers.

Anyway, this particular lawyer is located on Thepasit road. I in general like him but there are still some questions I have. I will be going around to a few different lawyers and comparing answers. My experience with Thai lawyers is that they are in general no all that great, but most of the things that you will have them doing are straightforward and they can get the job done. My one experience with a farang lawyer wasn’t good. He wanted over 100,000 to set up a company which I eventually had a Thai lawyer do for 10,000.

New information for me relates to the stipulation that land can only be split 9 times. At least according to this lawyer the 9 refers to the number of deeds you may have at one time in your name (or the name of a company). He is the procedure. You buy a piece of land which you want to subdivide into 30 parcels. You need to subdivide it into 9 parcels first. As soon as you sell one, the count currently in your name is reduced by 1. So you can again split — adding one more parcel.

Preallocated subdivision – or ‘offical’ housing projects (jatsan) — are costly to set up, there is a whole different set of inspection requirements, and you pretty much need to have all of the up front capital needed to finish off all of the infrastructure at the beginning. This compares with the split and sell as you go approach.

Company VAT tax. The information he laid down doesn’t agree with what my accountant told me. This lawyer said that the VAT is not applicable to a company doing house sales since the tax is collected at the time of property transfer. Also, he said that VAT was not applicable to property sales. The accountant had said that once company turn over is above 1.2 million, I would need to register for VAT. This needs clarification (maybe from the next lawyer).

Common areas. He advised the common areas could be set up and maintained as I decided up front I wanted to do it. In other words this is a pretty flexible area. I just talked to my friend doing the small apartment complex with a common pool and parking area. He is charging a yearly maintenance fee of 7000 bhat for upkeep.

All in all this lawyer seemed OK. I will be interviewing a couple of more and see which way I want to go. Basically, as far as the 6 rai project, it sounds like a pretty straightforward setup.

2 Comments

  1. Dozer,

    Great site! A lot of good information. You mentioned a friend that is doing a small apartment complex. Is that friend Thai or farang? My wife is Thai and we are interested in setting up a Thai company and either buying or building a small apartment complex on the outskirts of BKK. Any thoughts or comments would be very much appreciated.

    Thank you,

    Tr4ever

  2. The friend was a farang with a Thai spouse. Apartment complexes seem to be real good investments as long as the land isn’t too expensive to get the thing to pencil out. Thai apartments have good cash flow and low maintenance, but have heard some stories about tenant problems. Good luck on the project, post any updates to the forum if you are so inclined.

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