|
How to lease real estate
on Koh Chang
Useful Information
Contract specifics
Contract specifics
As
mentioned briefly above, a 3 year contract is the longest that can be signed
without being notorised by the Land Office. Remember this.
Any
contracts for, say 15 years, aren't legal after the initial 3 year period unless
they have been stamped and registered by the Land Office. The landlord and
yourself will go to the Land Office in Trat and, in a very simple & quick
procedure, stamps are purchased which are then stuck on the contract. The value
of the stamps is based on the value of the lease over its lifetime - 1 baht per
1,000 baht contract value. An official then puts the official stamp on the
contract and you have a legally binding 15-year contract.
Tha’t
all that’s required to make it legal.
It’s
simple and entirely painless, however many landlords are reluctant to do this,
for whatever reason. They often offer 'take it or leave it' deals, have an
unstamped lease or look for other land. The choice is yours. Get on well with
your landlord and you'll be fine, but what happens, for example, in a few years
time when he gets an sky high offer for his land and you have a contract which
won’t stand up in court?
How to
have a long contract but without it being registered? This is a predicament for
many lessees.
9-year
contracts are the most common when it comes to leasing land. Thai lawyers aren't
unanimous in their interpretations of the best way to go about having a legally
binding 9-year contract without it being registered.
The
minority opinion is that three separate 3 year contracts can be signed initially
with two of the contracts being post dated. (The obvious potential glitch is,
what would happen if the landlord died, towards the end of the sixth year and
his kin want to sell the land. You have a contract for the following 3 years,
signed by the deceased . . . but dated after his death. A situation lawyers
describe as “being a bit dodgy”.)
The
majority go for a single contract for 3 years but with additional comments
written by the landlord that it is to be renewed for two subsequent 3 year
terms. At the end of the initial 3 year term a new contract is signed, comments
on this contract will note that it will be renewed for one additional 3 year
term.
Points worth noting:
The price
will be negotiable, despite what the landlord may initially say. Be persistent,
polite and smile and you'll get the price lower. Most landlords use a standard
contract, in Thai, which can be bought over the counter from most mini-marts on
the island. Therefore, it is very general and not all the points mentioned on
it are applicable in all situations. Have a trusted Thai translate the contract
for you. Any points that you do not feel are fair should be discussed and
deleted or amended.
It is
feasible, and perfectly legal, to draw up your own contract providing the
landlord is happy with this.
If
possible, have the landlord sign a copy of an English version of the contract.
You’ll be responsible for getting a translation done.
The
generic contract specifies the initial yearly rent payable but unless you add
comments or clause on the contract, subsequent years rent won't be indicated.
Ideally, have the rent for subsequent years also indicated, or at least the
landlord should specify the maximum annual increase. Entering into a contract
without knowing how much rent you'll be paying in subsequent years isn't wise as
your definition of a reasonable amount and your landlord’s are bound to differ.
Some
landlords will ask you to pay yearly tax on the land. This isn't your
responsibility, it is the landlord’s as they must pay tax on the income they
earn on their land and property. Don't agree to it, unless you really are
desperate to lease the particular plot.
If you're
renting land, have you remembered to check the situation regarding utilities?
Where does the water come from? Is it free? Who owns the bore? If it isn't
your landlord, make sure you meet the bore’s owner before signing the contract.
Is electricity already hooked up, or will you have to pay for this? Will the
landlord chip in at all or offer a reduction as you have to pay for a meter
etc? Does the land already have an address, if not you'll need to apply for
this.
Access to
the land is also a major consideration. Just who is the owner of the dirt track
that leads to the plot with sunset views? Is it a public track? Does the track
pass through privately held land? What are the chances of a neighbour blocking
access?
Finally, if you're planning on building on the land, which you will be unless
life as a farmer is what you're looking for, make sure you double check the land
titles for the land you are renting. When it comes to obtaining planning
permission you’ll find yourself requesting additional copies of signed land
titles and the landlord’s ID card. Therefore, it pays to conduct negotiations
relating to the lease of land in a friendly manner as you’ll definitely require
your landlord‘s co-operation in the near future.
|
