Years ago I saw an English language posting on Linked-In advertising the “sale” of land on Koh Chang (a Thai island) through the use of three consecutive 30 year “registered” leases for a total of 90 years. The advertisement went so far as to highlight the land’s location in a national park. When I posted a question – a simple question rather than a claim – asking how land in a national park could be “sold” and questioned the lease arrangement, I was met with a defamation threat by the foreign property agent who also threatened to tell my “boss”, the U.S. Ambassador, about my post. Very strange.
I explained that I chaired the Legal Committee of the American Chamber of Commerce in Thailand (AMCHAM), that AMCHAM was not a U.S. government agency (it’s a chamber of commerce) and I was flattered that he thought I represented and reported to the U.S. Ambassador, but, alas, this was not case. The property agent was not amused. But others on Linked-In who apparently knew this person were.
Unfortunately, real estate fraud is not rare in Thailand, particularly outside of Bangkok. About ten years ago I recall meeting young foreign real estate salespersons on Koh Sami – backpackers who ran out of money? – telling me: “yes, foreigners can buy property in Koh Samui!”. When I expressed curiosity because I knew it was a scam, they became even more persistent.
A tropical villa in the beach resorts of Thailand or even a nice condo in Bangkok can seem enticing and many foreigners throw caution to the wind when they find a dream property in Thailand, but all too often these “deals” end in tragedy where the foreigner loses substantial amounts, sometimes all of his savings, in a deal that never stood a chance of closing from the outset.
I saw this first hand when the U.K. based managing director of one of our institutional clients lost GBP700,000 on an investment in a dream villa in Koh Samui. The deal had no chance of completing because of environmental restrictions. This would have been apparent from a quick due diligence, but he was so enamored of the property that he never bothered checking. Instead, he used his local Koh Samui based lawyer. His local lawyer represented the owner of the underlying property, other buyers, the developer and anyone else that was willing to pay him money to participate in this deal. He was apparently also unfamiliar with conflicts of interest or feigned to be. Our instructions were to help the developer somehow evade inconvenient local zoning restrictions. We declined to take these instructions.