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Thread: Leasing

  1. #1
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    Leasing

    I haven't found a thread on this specific subject, so will ask some questions and maybe one or more of you have dealt with long term leases.

    I am interested in a piece of property that I cannot own, but wish to secure it in a totally legal and above board manner for an extended period. There will be no Thais involved.

    What is the 'normal' lease period and can you write in an extension period that is guaranteed if codicils (sp?) are met, with an escalator clause if necessary?

    Does a lease of a property give you the right to change, ie. remove trees add ponds or other 'adjustments', the landscape?

    Do the lease holders have the right to improve the buildings located on the property at the time of the lease?

    What rights does the land owner have if the terms of the lease are totally complied with in terms of inspection, access or use?

    Assume that the use of the land will stay in the same category - agriculture and any additional buildings will be semi - permanent.

    Thanks for any ideas, problems you've encountered and advise.

    E. G.
    "If you can't stand the answer --
    Don't ask the question!"

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    keda's Avatar
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    Not a clue but I imagine everything is negotiable, including your right to dig the world's largest hole.

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    Civil and Commercial Code: Book III - Specific Contracts, Title IV: Hire of Property, Section 537 to 571 (inclusive)

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    Some highlights:

    S. 538: A hire of property is not enforceable unless it is made in writing

    S. 538: A hire of property for more than 3 years is not enforceable unless it is registered with the local land department

    S. 540: The lease term for a hire of property cannot exceed 30 years

    S. 540: A lease term may be renewed, but the renewal cannot exceed 30 years (NOTE: the Supreme Court has held that this is personal promise only enforceable against the person who makes it)

    S. 542: When several persons claim a right to property under a contract of hire, the hirer who first took possession of the property shall be preferred - unless the lease agreement is required to be registered, when the person who first registers the lease will be preferred (S. 543)

    S. 544: Unless otherwise provided for in the lease agreement, a leassee cannot sub-lease the property. Any sub-let in violation of this provision will nullify the agreement

    S. 546: Lessor is bound to deliver property in a good state of repair - failure to comply gives lessee right to terminate agreement (S.548)

    S. 547: Lessor is bound to reimburse lessee for any necessary and reasonable expenses incurred for the preservation of the property - except where such expenses are ordinary maintenance and petty repairs

    S. 550: Lessor remains liable for any maintenance, except where such is normally paid for (by custom) by the lessor

    S. 551: Lessee cannot use the property hired for any purposed other than those set out in the lease agreement

    S. 552: Lessee must take as much care of the property as an ordinary pruident person would be expected to take care of his own property

    S. 553: Failure to comply with S. 551 or 552 gives lessor right to terminate the agreement

    S.555: Lessee cannot prohibit the lessor (or his agent) from inspecting the property at reasonable times and intervals

    S. 558: Lessee cannot make any alteration to the property unless he has the permission of the lessor. If lessee makes any alternation without lessor's permission, he is duty bound to return the property to its original state upon a request to do such by the lessor

    S. 562: Lessee is liable for any loss or damage caused to the property by himself, any person living with him, or by any sub-lessee. Lessee is not liable for any damage resulting from the proper use of the property

    S. 563: No action can be taken by the lessor against the lessee in a court of law due to a breach of the lease agreement after the elapse of a period of 6 months from the date on which the property is returned to the lessor

    S. 564: Lease agreement terminates upon the end of its term

    S. 566: If no period is agreed, termination can occur each time payment of rent is due, provided that notice of one rental payment period is given

    S. 569: A hire of property contract is not extinguished as a result of the transfer of ownership in the property

    S. 570: If at the end of the agreed lease period the lessee remains on the property and the lessor does not object, the lease is deemed to have been renewed indefinitely

    NOTE: Section 541 stipulates that a lease agreement is made for the life of the lessee. It has been held that this means that a lease term cannot be bequeathed and that a lease agreement will terminate upon the death of the lessee
    Last edited by William; 29-03-2007 at 12:04 PM.

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    ^ in Thai I assume?

    E. G.

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    oops your quick .... thanks for the highlights

    E. G.

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    ^sorry, can you expand on what you mean by in Thai?

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    I posted that prior to seeing your post on the highlights.

    I assumed the legal document would be in Thai.

    You were too quick for me....

    E. G.

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    ^the legal document can be in English, but if it is in English you need a governing language provision which stipulates that the English language version of the agreement takes precedence - CCC Section 14

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    ^ a!a !! now THAT is very useful information... Thanks W.

    As I mentioned in another thread, the diversity of information on this forum is mind boggling at times.

    E. G.

    PS I am a pasimonious bastard with my greens but you got a couple coming after I spread things around.

  11. #11
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    If your lease is more than 3 years, you must register it. Now, I would be surprised if they register an English contract!!!! You also must pay taxes on a lease (contrary to a usufruct contract done for free - for example).
    One way that Thai people do it to avoid taxes is to make 10 separate contracts of 3 years... for a total of 30 years.

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    Quote Originally Posted by Sebastien View Post
    One way that Thai people do it to avoid taxes is to make 10 separate contracts of 3 years... for a total of 30 years.
    hmmm. I think you'll find this is contrary to Section 150 of the Civil and Commercial Code and, thus, unenforceable.

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    ^ I think you'll find that law in Thailand is a joke.

  14. #14
    ding ding ding
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    ^ and thats if your a Thai. farangs dont even get near to having any laws to back them up or help out

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    Quote Originally Posted by Marmite the Dog View Post
    ^ I think you'll find that law in Thailand is a joke.
    true, I laugh at the law in Thailand daily - but there are certain limitations

    BTW having a great time in Hua Hin, but the bloody internet charge is 214 Baht for 15 minutes, so I don't think I'll be spending all day on TeakDoor

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    I just can tell you that some people do it...

    Now, OBVIOUSLY TO ME, it's against the law. One very old law principle: "you can't do indirectly what you can't do directly." (more or less...sorry for the translation!).

  17. #17

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    Lets say the owner wants the lessor out after the first 3 years, the owner admits that the lease agreements were all pre-signed there fore invalid, would the owner win? would both be charged for fraud and the owner charged with tax evasion? I could imagine it becoming quite a mess

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    Great info were did it come from??

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    Quote Originally Posted by donmeurett
    Great info were did it come from??
    At a wild guess I would say....

    Quote Originally Posted by William
    Civil and Commercial Code: Book III - Specific Contracts, Title IV: Hire of Property, Section 537 to 571 (inclusive)

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    My info comes from Thai lawyers! But not working at my office !

    koratlawyers DOT com

  21. #21
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    Quote Originally Posted by dirtydog View Post
    Lets say the owner wants the lessor out after the first 3 years, the owner admits that the lease agreements were all pre-signed there fore invalid, would the owner win? would both be charged for fraud and the owner charged with tax evasion? I could imagine it becoming quite a mess
    This would be a difficult one dog.

    In English law there is no presumption to act in good faith - hence the old caveat emptor rule.

    However, in Thai law there is a presumption of law that one act in good faith - hence Section 150 of the CCC which, basically, states that if you don't your contract is null and void.

    On the flip side, Thai law does recognise the concept of a "sitting tennant", which is very much an English law concept and not really a European concept. Thus, to try and sell a place with a sitting tennant in Thailand is not easy.

    Also, one must keep in mind that because something is not enforceable, doesn't mean it is not valid. For example, I enter into a 5 year contract with you (as land owner). We don't register the contract at the land office. In itself this makes the contract unenforseable, but it does not make it invalid. A very moot point perhaps, but it shows that even as unenforceable, as valid, it can be subject to challenge, change in law...

  22. #22
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    I noticed this thread as I'm looking for a contract at the moment that I hope to sign on Saturday to cover my new home. At present I have this from a friend but it is only in English not in Thai. My proposed land lord is Thai so it would be better if I had a contract that was in both languages and is hopefully if not in my favor then at least fair.

    Does anyone have such a beast.
    Thanks
    Douglas

    LAND AND HOUSE LEASE CONTRACT
    LAND AND HOUSE LEASE CONTRACT


    Made at ...............................................
    Date: .................................................. .

    This contract is made between :

    - Mr/Mrs/Ms .............................., address……......................................... ............................................, phone: ………..........……, hereinafter called the "lessor", on one part,
    and
    - Mr/Mrs/Ms ............................., a citizen of:.........................., born in ……....................….., Date of birth ......................, passport number …....................… Expiry Date: ...................., hereinafter called together the "lessee", on the other part.


    OBJECT : land and house located at …...................……….........................…...................………........................... ...................... – Thailand, hereinafter called the "leased property".


    Both parties agree to enter into this contract in accordance with the conditions detailed in the following items:


    Item 1. The lease is granted for a period of: ......................... from ............................ to ............................., at a monthly rental fee of ................................ Thai Baht to be paid monthly in advance in the ten (10) first days of the month against receipt.
    A deposit of ............................. Thai Baht is paid now. It will be returned at the end of the contract.


    Item 2. During the tenure of the lease, the "lessee" is responsible for payment of fixed telephone, electricity and water, per individual meter, with the bills in his/her name. For this, the "lessor" undertakes to transfer as soon as possible the electricity, water and fixed telephone contracts to the name of the "lessee". A report of the counters will be done at the beginning of the lease.


    Item 3. The "lessor" can stop the lease contract if the "lessee" fails to pay the rental fees when due or if the “lessee” causes damage to the "leased property" which will adversely effect the value of the "leased property" or if the “lessee” uses the property to engage in illegal acts under Thai law. The "lessor" must give written notice of his wish to terminate the lease contract and give ten (10) days notice. The “lessor” must have made reasonable attempts to collect the rental fees before terminating the contract.


    Item 4. If both the “lessor” and “lessee” agree in writing the contract may be terminated at any time.


    Item 5. Without notice in writing from the “lessor” at least one month before the end of the contract, the contract will be automatically extended for a period of 1 month with the same conditions and will continue month by month until either the “lessor” or “lessee” terminate the contract giving a months notice in writing before hand.


    Item 6. The legal binding of this contract covers and engages the descendants, the estate and heir(s) of the "lessor" or to whoever the ownership of the land and/or the house may be transferred or sold. The legal binding of this contract covers and engages the descendants, the estate and heir(s) of the "lessee".
    In case of “lessor” would like to sell the “leased property”, he agrees to first inform the “lessee” of his intention to sell.


    Item 7. The "lessee" may if he/she requires make changes to the decorations and furnishings of the “leased property” and is not required to return the “leased property” to it's original state of furnishing and decoration on termination of the lease.


    Item 8. The "lessee" agrees to pay a security deposit (as mentioned in Item 1). The “lessor” shall return this amount of money in full when the contract is terminated, as long as no outstanding repair costs have been incurred by any damage to the “leased property” resulting from the “lessee's” negligence and/or if there are outstanding rental fees owed by the “lessee” on the “leased property”. In this case the cost of repairs arising from negligence and/or outstanding rental fees may be subtracted from the security deposit and the balance returned to the “lessee”.


    The contract is made in duplicate with identical contents. This English Language version of the contract takes precedence over all others. The parties have read and understood the entire substance of the contract. The parties acknowledge that the contract represents their intention in every way, so they hereunder sign and retain one signed copy each.

    The present lease contract contains one (3) pages,

    The “lessor” The “lessee”



    Date: Date:
    Mr/Mrs/Ms .......................................... Mr/Mrs/Ms ...............................................

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