Leasehold in Thailand

[Anthony Paul Moorhouse]

In Thailand in a condominium situation 49% of the units are freehold to foreigners meaning that 51% cannot be unless they are sold to Thais and in Phuket that is not the case, all or virtually all are sold to foreigners. As a result you end up with two different ownership situations in the same development, which is not a situation that is conducive to harmony of the owners. This is not unique at all as there are many countries in the world where foreigners cannot own freehold and landed property except in certain circumstances and these countries include Singapore, Malaysia, Hong Kong, Australia, India, Switzerland, Vietnam, Korea, Japan etc. etc

As a consequence in our situation we are NOT a condominium but are classed as an APARTMENT complex [REMOVED] and [REMOVED] (a different meaning in law) and as such we only do Leasehold but as previously explained we then give the Land Ownership Company to the owners themselves so they are leasing from themselves and become both the Lessor and Lessee, nothing could be safer! We set this situation up over 10 years ago and it has been signed off by Baker Mackenzie, Johnson Mathey and Stokes and Tilleke and Gibbins, 3 of the biggest and most influential regional law firms in Asia and now virtually every apartment development in Phuket, Samui and Hua Hin have copied our lead as being the most secure method of investment in property. The added benefit is that you not only own the strata title of the apartment (which you would only own under a freehold agreement) but you also own (together with the other owners) all the common areas, roads and land and facilities in fact everything within the land boundaries, to do with what you as a group of owners decide as you are the owners and landlords of everything not just your own apartment, this is not the case with a freehold condominium.

When you enter into a lease in Thailand it is registered at the land office and no one can take this away from you. A foreigner with a lease has exactly the same rights in law as a Thai citizen. If and when Freehold becomes available for all foreigners on all developments and/or the lease period is extended to 99 or 199 or 999 years as will definately happen in the not too distant future then it clearly states in the contract that each owner can move to the new situation at no extra cost except the additional registration costs if they so desire. This is my 5th development here in Phuket in the last 10 years and all are structured the same way and all owners (over 200) are delighted with their effectiveness and ease of operation.

There is no chance of the Lease holding company 'disapearing down the road at some point in the future' as this will be owned 100% and managed by ourselves (the 40 owners only) and I am sure that you will not throw it away, why would you when you all are in it for the same reason namely to enjoy your lifestyle and maximise your investment? I own 4 of the apartments in the complex myself and my partner owns 4 also and all under the same terms and conditions as every other owner and believe me if there was a better and more secure or beneficial way then we would be doing it! I can guarantee you that it is 100% safe and secure otherwise I would not have bought 4 for myself and neither would my partner, we would have sold them and taken the money instead but we believe they are a far better investment than money in the bank and so far we have been proved absolutely right.

Hope this gives some hindsight into leasing in the land of smiles