to buy or not to buy

Legal issues related to buying land, houses, condos in the LOS. Anything about contracts. Finance related, such as getting a mortgage, buying property from the bank, etc.

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to buy or not to buy

Postby Nemo » Sun Aug 30, 2009 11:38 pm

Hiya everyone,

I did a little search on the site using words like "mortgage", "usufruct", "inheritance" etc..., and read a few old discussions about it all.

I lot of POVs were exchanged, but I wonder whether a consensus has been reached on this oft discussed topic?

Sounds like it's best to get a joint mortgage, with usufruct, and a lease, and form a company to make things so complex that you minimise the chances of getting shafted.

Having said all that, I can't really imagine selling a house in Thailand - who would buy it?! so I'm not sure I get what the point of throwing loads of money at it is. If you wanted to invest for a long term return, you may well be better off putting your money into many other things.

I realise this is site for builders, but even a builder has to acquire the land to start with, so I'm really plugging at what's the consensus of the best (i.e. most financially efficient) way to acquire the land?

We're young, and I've never had any money for her or her family to siphon off me! We probably have a pretty "textbook" and "normal" relationship (unsually lucky maybe? I dunno). I suppose I don't really have the same concerns over losing all my money in the same way others who've worked for years might.
Seems that the best bet, both for cashflow and investment type reasons, is to try and get a mortgage via HSBC or UOB (not up to date on the score at all) and drag it out as long as possible, and build up savings to put down on something back in the UK one day, when it becomes affordable.

I suppose it might be interesting maybe setting up a modest family business maybe eventually. It seems that people use company law to make their projects happen, but I wonder, how does doing a mortgage and setting up a company affect each other? In what way might it be useful to layer on usufruct and leases?
Would it be a case of:
step 1, set up a "company"
step 2, find some land, take a deposit to a bank and ask nicely for a mortgage (either in her name or jointly if allowed; or via the "holding company")
step 3, apply for a usufruct on the land (if it has to be bought as her property, rather than company property)
step 4, set up a lease from her to me [doesn't feel like the right way round]
step 5, start preparing to build...

...bit confused, really. Any experiences to share?
What's the consensus amongst you lot ( ...although I'm married to "one of 'em", and can bumble by in the language a bit, I've not actually spent that much time over there).

[This might be my intro?!]

My wife and I have been together nearly 8 years: married in our twenties in Thailand... we've got young children, and are turning our attention towards setting up home in her country after scraping by in mine for years, with me hopefully working at sea, and her perhaps working in a more normal job onshore to help make it happen.
We're aiming to build a home (rather than a house)... perhaps a farm/orchard/renewable energy place in the mountains in the south east, where she's from. We'd probably house her frail parents and some immediate family... they're a small, quiet, good-natured bunch (I meant small family, but come to think of it, they are all a bit on the munchkin side!).
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Re: to buy or not to buy

Postby geordie » Mon Aug 31, 2009 4:36 am

hi nemo welcome to the forum where we are self builders as oposed to contractors some of the guys have experience in the various trades some may also be contractors but the forum is a pool of knowledge shared by people genrally who have a Thai interest there have and will be lots of discusions regards protecting you interest investment semms a strange thing to suggest if you are in a normal relationship and especially where there are kids involved however s--t happens and it does tend to happen a lot in Thai relationships the main problem being she gets all you have worked for
Things coul be worse in the uk she gets half your property and a large proportion of your salary also
I profess to not being a gambler and do not even put on the lottery but on my second mariage now to prove i am a liar because being maried is probably the bigest gamble in life
Its your choice how well or badly you treat you wife or family but on my limited experience the Thais suffer from keeping up with the Jonses
This means she will expect a higher standard of living than if she had a thai husband
It also means a bigger and better house ect
I personally feel that my wife of 9 years deserves a house without a morgage and maybe even a small buisness to help support her if we do split which by the way i am not planning
At 53 i am not the youngest member or the oldest and we all have difernt veiws on what we want to acheive but a small caution a freind of mine who is very tight on money thought he was protecting his assets by having them in the name of a friend his very mutch younger wife eventually after a lot of pouting and sulking he had sone of the property singned over to her came to uk for two months and found she lost it in a card game so caution is advised but do not let her beleive you mistrust her a dificult balance ??
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Re: to buy or not to buy

Postby thaifly » Mon Aug 31, 2009 7:53 am

its a gidday to nemo...its the thai fly from mae rim..and welcome to C.T .H. .......you appear from your post ...to have a good pulse on the situation...the thai fly suggests that you take the necessary stratgery plan...that suit your needs..and that you feel comfortable with......the thai fly will leave you with a very true saying ..that he has used so many times.....HE WHO IS AFRAID TO ROLL THE DICE..WILL NEVER THROW SIX...its a unlucky ARSENAL..gidday to all...ITS THE THAI FLY FROM MAE RIM
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Re: to buy or not to buy

Postby dozer » Tue Sep 01, 2009 7:57 am

step 1, set up a "company"
step 2, find some land, take a deposit to a bank and ask nicely for a mortgage (either in her name or jointly if allowed; or via the "holding company")
.

It is very difficult to buy property via a company if there are any foreign shareholders. They have a big sign up at the land office about this, there are lots of regulations to confirm that the other shareholder/directors are not nominees, ergo this is no longer a very good option.
property singned over to her came to uk for two months and found she lost it in a card game so caution is advised
I also have heard of many cases where the spouse gets in some kind of financial difficulty and borrows money against the property, later to be foreclosed against...
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Re: to buy or not to buy

Postby Nemo » Wed Sep 02, 2009 12:09 am

I've read a fair few horror stories, and it's easy to get a distorted view of the way Thai birds are.
I'm fairly confident in my own "mia" (or "pun rye ah") for all sorts of reasons, not including the fact that our children are dual nationals (and more British than Thai); she's certainly not the kind to lose land in card games (probably the opposite) ...but I'm trying to avoid boring people with life story type stuff. We're both looking long term, aiming to have a place in each country... in fact, an obvious part of the incentive for me to stay in her country is to help fund a place in my own country.

As it stands, I don't mind stumping up for the land for her as a "prezzie", and perhaps getting a lease from her and then a mortgage (if that'll work?), on a place we can self-build for hopefully something reasonable (preferably within a B5m range including land).
The way I look at it, I'm guaranteed to be shelling out at least about £600 a month rent in the UK for a long while anyway (and probably a fair bit more), so B20k a month as an accommodation budget feels relatively painless as "dead money".

So, assuming I give her a rye (bear with me on my quirky romanisations - I like them!), with the intention of paying for a barn in my name by whatever mechanism, what are the options for requiring any and all usages of the land for collateral? Is that where the usufruct comes in?
Are you saying you could theoretically end up in a situation whereby you own the lease on some land that your Mrs lost in a game of poker?! Or refinanced/(re)mortgaged under family pressure?
I can imagine my Mrs putting on pressure for some extreme circs (i.e. to the same extent of a "normal" western Mrs); but she's far more thrifty than me. It's not a major worry, but no harm in covering as many risks.

Are there not risks associated with the usufruct being permanently on the land itself? What's the best "belt and braces" approach?
I'm not fussed about owning anything there permanently (I may well prefer to retire in my home country)... she can own it if she wants (and pass it on to our children if allowed); I'm just after (like anyone!) the best combination of property rights with most efficient monthly accommodation costs (i.e. effectively cheap rent with the rights you don't get with rent in Thailand), so I can put savings away outside the country.

I'd be grateful for any experiences anyone is willing to share.
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Re: to buy or not to buy

Postby Nemo » Wed Sep 02, 2009 12:58 am

geordie wrote:protecting you interest investment semms a strange thing to suggest if you are in a normal relationship and especially where there are kids involved however s--t happens and it does tend to happen a lot in Thai relationships the main problem being she gets all you have worked for
Things coul be worse in the uk she gets half your property and a large proportion of your salary also

Well that's it... people go on about what nutty Thai women have done to (arguably, slightly careless) farang, but forget how many nutty women there are in their own country who do equally unbelievable things when relationships break down - it's hardly going to be any better back in your own country... at least there's no Thai CSA!
I'm not really that interested in investment - other than in a token one, as a key to unlock other benefits. Our children are obviously fairly likely to want to benefit from the Scottish further education or university system, so, we're not in the "retirement in Thailand" game; though I appreciate that is a common one for self-builders in Thailand. We're looking at a decade in Thailand, and then a return to Scotland... and who knows maybe we will become reThairees like many others here! (once I've got my Scottish passport of course! :wink: )

geordie wrote:Thais suffer from keeping up with the Jonses
This means she will expect a higher standard of living than if she had a thai husband
It also means a bigger and better house ect

Dunno about that really... she's been in the UK 7 years and has become more worldly than any of the people she would have associated with back in Thailand, and from the start was clearly very different from (i.e.: doesn't identify with) the two other categories of Thai we encounter in the UK (the affluent sino-Thai post-grad student, and the moo-baan pidgin-english speaking working-class Thai). She's by default become a bit of pee-yai amongst the local farang punrayah, even the local hospital has rung her up for interpreting help because of her excellent English).
I don't think her family are remotely like that (Joneses) at all either... They'er poor subsistence farmers.. grafters not gamblers. Some of the neighbours gave 'em some grief, but soon shut up when one of her sisters (a Lt. in the Army) turned up in her new uniform (making squaddie dad beam with pride no doubt!).
None of them ever wear jewellery... I think that's a sign that her family are basically puritan commies!
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Re: to buy or not to buy

Postby geordie » Wed Sep 02, 2009 5:23 am

sounds like my misus other than she is 100-% devoted to her family who i do have issues with

The comment about the joneses ?? I personally would prefer to rent initially to see first if i like the area second what i will end up with as neighbours My wife is dead set against this as she has a farrang husband so I should buy a house and not worry about silly things like i do

I only worry because i used to love chilling at mum in laws house untill next door started to repair motorbikes in the front garden then opened a shop/bar kind of took away the relaxation aspect a bit Add to that being a farrang i come under entertainment they sit and look all day /night lack of planning can work against as well as for you

Regards trust i built no strings a new house for mum in law and had to pay her unemployed brothers to help???

The one full time employed member of the family is a teacher and always skint looking for a handout His wife likes cards so its not the farrang victims its life
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Re: to buy or not to buy

Postby dozer » Wed Sep 02, 2009 6:51 am

Are you saying you could theoretically end up in a situation whereby you own the lease on some land that your Mrs lost in a game of poker?! Or refinanced/(re)mortgaged under family pressure?
No, with a lease registered on the Chanote the bank/mortgage company would loan money on it (without your signature anyway), therefore you are protected. Also as far as the customary situation, the lease holder, mortgage holder will hold the physical deed (Chanote).
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Re: to buy or not to buy

Postby Nemo » Wed Sep 02, 2009 7:49 pm

So in conclusion, the best plan is:
- rent for a while
- look around for land
- gift some cash to your wife to buy it (I presume they are eagle-eyed over any possible nominee type practices, like paying your wife an allowance to pay it off)
- apply for a lease from your Mrs? or apply for usufruct? or both?!
- take a deposit and try and get a loan to build; or pay up front in phases to self build whilst still renting?

How long do you think it would take (factoring in rent and living costs) to build in stages with up front payments in the provinces, if you had B100k a month income? (we're weighing up the balance sheets of developed western Rayongshire versus more stunning yet out of the way places)
It must be cheaper & safer to buy and build up front compared with embroiling oneself in paperwork and mortgages, as you can hit the brakes and bail at any time, and live on or near site to completely supervise; but I suppose it could take a while to complete, if you had to keep the family comfortable whilst you wait.
I suppose for those who are older with savings, this is the normal way of doing it; am i right?

cheers.
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Re: to buy or not to buy

Postby dozer » Wed Sep 02, 2009 9:03 pm

gift some cash to your wife to buy it (I presume they are eagle-eyed over any possible nominee type practices, like paying your wife an allowance to pay it off)
They make you sign a statement saying you have no monetary interest in the land, despite the recent alarmest news about nominee practices and how they might be enforced nothing has changed her and nothing is likely to change IMHO.
apply for a lease from your Mrs? or apply for usufruct? or both?!
The lease is normally done right at the land office when the land is transferred. No lawyer needed, the land office has the forms and will record the 30 year lease on the back of the deed. For a usufruct is less used and less well know at the land office. This is a more complicated option and may require the use of a lawyer.
and get a loan to build
Just from what I've heard it is very difficult to get a loan when a foreigner or foreign income is involved.
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Re: to buy or not to buy

Postby Nemo » Wed Sep 02, 2009 9:56 pm

I s'pose with the first one, they just want a legally binding statement to negate the 50-50 spouse asset splitting laws.
I wonder if that can change if one manages to get permanent residency and the get on the list of 100 who get 1 rye; I suppose that might be the ultimate protection against reckless Thai spouses... but I also imagine that like other countries, both spouses can be liable for each others' debts?

Sounds like with a lease, you could do one for a token fee of 1 sadtaeng or 1 baat?
Does having a usufruct really offer anything more than a lease would (other than duration of stay)? I remember reading there were potential pitfalls with it.

I'd seen that HSBC of Britain and UOB of Singpore offered loans (obviously not helped by global events at the moment), but I'm beginning to wonder whether it's even worth the hassle if you can bring in a decent western income, assuming you could limit build costs to no more than you might have had to pay in rent back home anyway during the same period.
If it takes a year or two to build a decent place without any need for that, it might be OK; the only incentive might be to keep from sinking too much into a theoretical hole... seems to me that it's futile to look at any money you put into a build in Thailand as anything different from rent.... maybe the sums don't add up on that one, I dunno... if you're in for 30 years, I guess you want some kind of parachute.
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Re: to buy or not to buy

Postby dozer » Fri Sep 04, 2009 7:50 am

they just want a legally binding statement to negate the 50-50 spouse asset splitting laws.
Correct. The declaration, as signed by the foreign spouse, originated in the late 90's. At that time a Thai woman married to a foreigner could no longer purchase land. A Thai woman sued to the supreme court, under the concept that just because she married a foreigner she didn't relinquish her rights as a Thai citizen. She won the case and this procedure was therefore introduced as a method of allowing a Thai woman married to a foreigner to enter into a land transaction. As posted in other threads: things are easier to this day if the Thai woman has retained her maiden name and not changed to a foreign name during marriage.

Sounds like with a lease, you could do one for a token fee of 1 sadtaeng or 1 baat?
No I wouldn't recommend a lease with a ridiculously low lease terms. The lease could be negated later on the grounds that it was not a legitimate contract as too far below market terms.
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Re: to buy or not to buy

Postby jazzman » Fri Sep 04, 2009 3:24 pm

Nemo, you started this thread by asking for members' personal experience:

I have a usufruct and would not hesitate to recommend it as the solution.
Rationale:
- It is easy to obtain, needs no intervention by a lawyer, costs only 75 baht.
- It's valid for life whether you are young, middle-aged, or in your third-age.
- You have total control of the property as if your were the owner.
- You hold the chanote certificate, your name is entered on it.
- The land can't be used as collateral for a loan or a mortgage.
- If your marriage goes pear-shaped, you can't get turfed off the land (although you may not wish to consider continuing to live near you ex or your in-laws).
- You can let or lease the land to a third party if you don't want to continue living on it.
- You can personally own the house you build on the land (look at it like a kind of UK leasehold property where you buy the house but only get a 99 year lease on the land).

Beware:
- of western lawyers who will try to dissuade you from this solution.
- who charge exceptionally high fees for it (15,000 - 20,000 baht is common).
- some provinces pretend that the system does not exist (come back again another day and see another clerk).
- some rare province land offices just blatantly refuse to entertain a usufruct.
- some land office clerks might want more than a smile and 75 Baht to do it for you.

OTHER SOLUTIONS:

- Company setup: see Dozer's answers.
- Land in wife's name: It's incredible just how naïve some people can be. I personally know several farangs who have lost their land and the house they built on it to their wives. I even know one clot who has lost two houses/land to two former wives already because of wives' gambling debts. The very sad thing is that his third wife is doing the same thing (her sister came round to our house asking to borrow money last week) while he is back in Oz driving a fork-lift truck in a factory to make ends meet and finish the new building project in the village he started two years ago.
- Usufruct with lease: if you have a usufruct, you won't need a lease as well. Who would you be leasing the land to? Yourself?
- Lease: Unless the law has changed, a lease is valid for 30 years. That's fine if like me, you almost certainly won't be alive in 30 years time. A lease can be renewed for a further 30 years, but there's no legal requirement that forces the owner to extend the lease. So if you're only 30 now, you might be homeless by the time you're 60, and have to start all over again.
- Mortgage: My own personal view is that any one who needs to get a loan to buy or build a house/land in Thailand, can't afford the luxury in the first place, and they are in the same club as those who whine and whinge about visa fees, Thai culture, the cost of cheese, and do their drinking at concrete tables in front of neighbourhood stores.
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Re: to buy or not to buy

Postby geordie » Fri Sep 04, 2009 4:28 pm

would it be an option to surrender the lease/userfruct after say 15 years then renew . in effect i think 45 years would probably see out even some of the younger members of course then you have a couple of issues would you be happy living in the same place for 45 years??
Another majour issue is that i assume my wife is typycal thai and wants to settle near her family in the even of a marital break up would you be happy living near the ex and her family given the high farrang suicide rates in thailand i think i woul prefer new pastures

For suicide info i read pattaya news online ???
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Re: to buy or not to buy

Postby jazzman » Sat Sep 05, 2009 1:51 am

Repeat:
Usufruct is valid for life.
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