"KAIFAK"
Sales with Rights to Redeem
Innovative Alternative Financing Solutions for your Growth
What is "KaiFak"?
"KaiFak" or Sale with Rights of redemption refer to the legal rights granted to a party who has sold their personal property. However, he or she has the option to repurchase or redeem it within a specified period. These rights provide a safety net for individuals or businesses who may have experienced temporary financial difficulties and wish to regain ownership of their assets.
EASY LOAN APPLICATIONS
01
How "KaiFak" differs most from a Traditional Mortgage?
In contrast to a traditional mortgage, the owner transfers ownership documents to the lender, who becomes the official owner but allows the original to use the property. This arrangement simplifies possession for the lender in case of default.
For instance, a businessperson with a THB 300,000,000 beachfront plot need quick cash to develop a luxury resort. Instead of a lengthy bank loan process, they can transfer ownership to the from the start, allowing for immediate funds while retaining the option to buy back the land after 18 months.
02
Why choose this finance option when a mortgage might be available?
The borrower may prefer the KaiFak option due to minimal documentation and an asset-based approval process rather than a credit assessment. Lenders, having a vested interest in the land, may benefit from potential development or resale. Borrowers enjoy less hassle with approvals and no installment worries for 18 months, allowing them to generate cash and invest in their business. Importantly, defaulting on a KaiFak won't affect credit ratings, as it isn't classified as financial debt and isn't reported to Thailand's National Credit Bureau.
03
For how long is "KaiFak" exercised?
If there is no defined period, you cannot exercise the right of redemption later than ten years after the time of the sale in case of immovable property and three years after the time of sale in case of movable property.
You can extend the period of redemption by showing a contract and registering it to the Land Department. If the contract provides a longer period, it shall be shortened to ten years and three years respectively.
04
The following may exercise the right of redemption
1.The original seller or his/her heirs; or
2.The transferee of the right; or
3.Any person expressly allowed to redeem by a contract
Who has the right to exercise the Right to Redemption?
05
If the parties did not fix the redemption price, you may redeem the property by reimbursing the price of the sale and the annual profit must not exceed the rate of 15% per annum.
What is the legal rate of redemption?
Understanding the implications of Sales with Rights of Redemption "KaiFak"
Sale with rights of redemption has several implications for both the seller and the buyer. It is crucial for all parties involved to be aware of these implications and their legal ramifications.
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1.Seller’s Perspective
From the perspective of the seller, selling personal property with rights of redemption allows them to obtain immediate financial relief while still maintaining the possibility of reclaiming their assets in the future. However, sellers must carefully consider the terms and conditions of the redemption rights, including the timeframe and any associated costs.
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2. Buyer’s Perspective
Buyers of personal property with rights of redemption may benefit from acquiring assets at a lower price. However, buyers must also consider the risks involved, as the seller may exercise their redemption rights. Ultimately leading to the loss of the purchased property. It is essential for buyers to conduct thorough due diligence and fully understand the terms.
Benefits & Risks
Safe class investments, like Sale with Rights of Redemption "Kaifak", offer stability and steady returns with reduced risk. Safe class investments typically yield lower returns than riskier alternatives. Balancing safety and risk is crucial for your portfolio.
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Flexibility
The seller retains the flexibility to regain possession of their property within the agreed timeframe.
Financial Relief
The seller can obtain immediate financial relief by selling their assets while still having the option to repurchase.
Lower Purchase Price
Buyers may have the opportunity to purchase personal property at a lower price compared to the market value.
Loss of Property
The Buyer may lose the purchased property if the seller exercises their redemption rights within the specified timeframe.
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Uncertain Future
Sellers may face uncertainty regarding their ability to repurchase the property within the redemption period.
Legal Complications
Failure to comply with legal requirements or properly document the transaction can lead to disputes & legal complications.
Advantages of 'KaiFak' Investment
01
Simplified Loan Application
Investing in 'KaiFak' offers a simplified loan application process based on the merit of the collateral, ensuring flexibility and choice for investors.
03
Loan Duration
Typically short-term, with the possibility of extension yearly for up to 10 years.
02
Title Transfer
The transfer of asset title to the lender occurs on the day of the loan, ensuring security and transparency.
04
Legal Simplicity
In the event of borrower default, the lender assumes rightful ownership without the need for prolonged legal processes.
Thai Alternative Lending Market poised to grow at a steady CAGR of 15.1%.
01
KEY BENEFITS
1. Investment typically amounts to 50 - 70% of the collateral value sold.
2. A one-time service fee of 5% is charged from seller, split between the company and agents.
3. Redemption offers an additional profit value of 15% per annum.
4. Protecting investments involves deducting specific amounts from the loan and offering flexible options for the seller in case of non-compliance.
02
1. Diversification of the investment portfolio within the safe asset class of 'KaiFak'.
2. Implementation of a trustee structure for asset management and oversight through a supervisory board.
3. Discussion on personal liability of the management for non-financial risks.
PROTECTING INVESTMENTS
