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Buying property in Thailand: culture shock!

Life Before Thailand

I first came into contact with Thailand many years ago, when I was a young man in the US Navy. I had the opportunity to spend several months in Bangkok on each assignment and I did the usual things a young sailor would do on short leave. At the end of each trip, I would always leave Thailand with a lasting impression of its friendly people, pleasant climate and excellent food.

After I finished my military service, I got married and started a family. From time to time, I reminisced about the good times in Thailand and the wonderful feelings for the country and everything that it encompassed.

About five years ago, my wife passed on. I was not at my emotional best after my wife’s death. My mental health hit an all-time low as I was still grieving over her death two years on. This, along with my impending retirement, caused me to re-evaluate my priorities in life.

My children were all grown up and independent; they had set up their own families. I wasn’t keen on the dating scene for seniors as it wasn’t my style, and most importantly, I didn’t feel like a senior citizen. The youth-oriented Western culture, however, didn’t make it easier for me as I felt discriminated against because of my age.

Retiring in the Land of Smiles

I began travelling again in 1999. There was a work-related conference and exhibition at the Sirikit Centre in Bangkok, and I took advantage of that to combine work with pleasure. Subsequently, I returned to Thailand on holiday on many occasions. I visited almost every well-known province such as Koh Samet, Koh Samui, Koh Chang, Phuket and Chiang Mai.

On those trips to Thailand, I met my future wife, Nopdara. She was then working for an international company and her ability to speak fluent English helped us to communicate and build a relationship.

Finding my soul mate at this stage of my life was totally unexpected. We made plans to marry after an abbreviated courtship, but there was a question of choosing a place where we would both be comfortable settling down in.

Nopdara didn’t want to leave Thailand and be away from her family, but more importantly, I was tired of my life in the US, the high cost of living, and the unforgiving anti-geriatric society. With all this in mind, I made the choice to retire in Thailand and married Nopdara. Once the decision was made, I began attending Thai language classes and did my research on property.

Seeking Legal Representation in Thailand

Needless to say, retiring in Thailand would mean that I needed a home. I have always preferred buying to renting, and retiring in Thailand didn’t change my view. My wife and I had been looking around for months and we finally found a piece of land near my wife’s home town in Northern Thailand where we could build our new home.

For me, it was never a question of whether legal representation was necessary to complete the transaction. Back in the US, as in the UK, I would never complete a property deal, or any important matter, without a lawyer. So it was with the search for some legal representation that first shed light on some basic cultural differences between Nopdara and myself.

Nopdara believes that you never hire any professional unless it is a life-and-death situation. She has never hired a lawyer in her entire life and certainly didn’t see the need to for our land and property purchase, especially when we could seek the help of her brother-in-law. She argued that her brother-in-law was a police officer and he knew the law better than lawyers, so we should purchase the house and land with his help. She added that he would not even ask a fee from us.

I was not comfortable with this approach, to say the least; buying land and property in Thailand without a legal representative would be inconceivable. Besides, it would leave us indebted to another Thai relative, and who knew what favours he would ask from us in the future?

After some lengthy and sometimes heated negotiations, I finally managed to out-talk Nopdara over the merits of hiring a lawyer. So we began making calls and doing our search for Thailand lawyer websites. I began searching Internet fora and message boards in Thailand for information on land and property, as well as issues relating to a foreigner retiring in Thailand.

Many people had the same questions as I had – how to buy land or property in Thailand; getting married with prenuptial agreements; long-term visas; and settling down in Thailand. The problem was that the answers to these questions were sorely lacking and the information provided was vague and, often, contradictory. So much for trying to get important information from amateur web-boards; it’s akin to asking the first person you meet on the street which stocks to invest in.

US/UK property versus Thai property

Back in the US, I have done quite well by investing in and then re-selling residential properties such as apartments and houses. I have focused only on property in high-demand areas, even if the current price seemed high.

I have always believed that it was better to overpay for a property which was more likely to appreciate, than to get a good deal on a property in a less desirable area. This is not to say, however, that I overpaid for any of those apartments or houses that I purchased.

I used to research quite intensively on real estate and attended numerous foreclosure auctions. I discovered that by persevering and spending ample time to follow through on the auction and the purchase, I was able to purchase property at below-market value. This was because many people whom I was competing with often decided not to follow through or lost interest as a result of the long process.

With my real estate experience from the US, I tried to use the same methods to buy land and property in Thailand. I discovered that things were very different in Thailand in terms of land or property purchase. First of all, I wasn’t allowed to buy land. Real estate agents in Thailand seemed mostlyto represent the sellers, or worse, these agents were actually the sellers themselves. The foreclosure process that I had had so much success with in the US was completely unusable here. The language barrier, the red tape and the bureaucracy was proving to be too much of a challenge.

In search of Thai law firms

I began contacting law firms in Thailand but I ran into language problems. These law firms often had Thai lawyers who were not fluent in English, and they were mainly geared towards Thai clients. There were a few Thai lawyers whose English was passable, but they just didn’t inspire confidence.

As a foreigner, I knew that there would be special issues involved in buying property or land in Thailand. I had a lot at stake and I needed a law firm which I could trust and build a long-term relationship with. I also contacted many real estate companies in Thailand. Many of the companies offered me the option of purchasing land or property through a Thai company. [Editor’s note, June 2006 – this option exploits a loophole in Thai law and is becoming increasingly difficult as the authorities tighten up on enforcement.]

However, when I asked for details on these Thai company shareholders and how I would be protected legally, their answers were not reassuring. For me, it seemed like a conflict of interest for the real estate company to sell me the land and still own 51% of my “company”. Not to mention the fact that I had no knowledge of anyone in my “company”. One real estate company even told me that the Thai shareholders would be names picked straight out of the phonebook.

Thailand Lawyers

I started contacting law firms with non-Thai partners. I found that there were actually many lawyers from the USA, UK, Australia and other Western countries working in Bangkok. The larger law firms, however, seemed primarily interested in having big companies with huge investments as their clients. I was worried that my legal matters would be treated as trivial and secondary to these high net-worth clients.

My criteria for selecting a law firm were simple: a reasonable fee structure (I wasn’t looking for the cheapest law firm, but one that would deliver results at a reasonable price); English-speaking staff; credibility; and a good knowledge of Thai laws as they apply to foreigners.

After doing research on Thailand Law Forum, a non-profit website on Thailand legal matters, and gathering enough general referral information, I decided to go with a Thai law firm in Bangkok, managed by an American lawyer.

Joe Leeds of Siam Global Associates impressed me for a number of reasons. First, he’s a licensed American lawyer who has 10 years of US law practice and an additional 15 years in Thailand. He is also fluent in Thai and his firm specialises in the kind of work that I needed.

Many of the foreign consultants working in Thailand did not seem to have any background or qualification as a lawyer. They seemed to have just woken up one morning and decided that opening a law office would be a good way to make money. Unlike many of the “foreign consultants” working in Thailand, Joe is a real lawyer, licensed and accredited (he even looks lawyerly). His wife, Chaninat Leeds, is a Thai lawyer and a professor of law at one of the biggest universities in Bangkok. She is also a principal in the firm.

One thing that irked me was the inability of many foreign lawyers at large, international firms to speak a decent level of Thai. They seemed to be totally reliant on the views of their Thai associates and subordinates; how could they manage a case if they were totally reliant on their subordinates? This was never a problem with Joe, who spoke excellent Thai.

I took Nopdara to Joe’s law firm for our first legal consultation. Being a typical female who couldn’t get her way, she sulked and complained the whole way. Now it was not just a difference of opinion; she had felt that by using an independent lawyer, it was somewhat an affront to her police officer brother-in-law. Keeping in line with the universal palliative in Thailand, I would have to buy her brother-in-law a bottle of whisky to make up.

Building Our Home – The Local Way

After all the legal work had been finalised, it was time to start the home-building project. I couldn’t deny Nopdara’s request to hire her nephew and his construction crew after having refused to engage the help of her brother-in-law, the cop.

Hiring lawyers is one thing that I feel I have to be selective about, but when it comes to hiring unskilled construction workers, I was happy to let my wife reign over me.

When her nephew and his crew arrived at the site, I knew I was in for an experience. They seemed to have brought their village along with wood scraps that I would soon find out more about. Before I could see any groundwork laid on the site, I was greeted with the sight of their ramshackle housing made out of tin and used wood.

I questioned my wife what this was all about. She explained that her nephew and his crew had to live on-site to keep guard on the materials. This seemed somewhat reasonable and I accepted this explanation. When I noticed that they also built a small pen and brought chickens, I looked to my wife for some answers and seeing my baffled face, she said, “Well, they do have to eat, don’t they?”

So, I made another concession. I had tin shacks in our yard and chickens running around. Cockerels crowing at the top of their voices and waking me up in the wee hours of the morning. Our yard also turned into a drunken party venue inundated with Isaan folk music every night. Finally, after a year of construction, our house was completed. Now, I’m enjoying my retirement in Thailand, in the company of Nopdara, kind friends and a trustworthy lawyer.

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