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Thai property law

Thai property law

Thai property law

Thai property law

 

1.1 – Foreigners cannot own land in Thailand but (in theory) individual foreigners can own land up to 1 rai (1600 square meters) in specified areas for residential purposes through a Board of Investment regulation which requires in addition to the land purchase a 40 million baht investment into Thailand in specified assets or government bonds beneficial to the Thai economy.

IF granted (unlikely) it is under strict conditions and the land must be located in specified areas and requires approval of the Minister of Interior. Moreover this ownership is not transferable by inheritance, therefore limited to the life of the person granted the right to own the land for residential purposes under this exception. In practice, even if you would be very rich, this is not a viable option. Besides this one exception land ownership in Thailand is strictly prohibited for foreign individuals.

1.2 – Foreign companies with substantial investments benefiting the Thai economy may have special privileges and exemptions for land ownership granted under section 27 of the under section 44 of the Industrial Estate Authority of Thailand Act or section 65 of the Petroleum Act (only for the duration of their business in Thailand)

1.3 – The foreign controlled Thai company with a majority Thai shareholding (in number of shareholders and percentage of shares) is through preference shares the only vehicle available for foreigners to control their investment in land in Thailand. Even though land ownership by a partly (up to 49%) foreign owned Thai company is as such not illegal under Thai land laws, the legality and land ownership by most of these partly foreign owned companies is controversial if not illegal. The Thai government is since 2006 restricting and discouraging the misuse of Thai companies to circumvent foreign property ownership restrictions in Thailand.

1.4 – According to section 93 of the Land Code Act, a foreigner who acquires land by inheritance can have ownership in such land upon a permission of the Minister of Interior.

Note that section 93 applies only to ownership of land by foreigners under a treaty and NOT to foreigners receiving land as a statutory heir from a Thai spouse. There is currently no treaty in place allowing foreigners to own land in Thailand, therefore no foreigner will be given permission by the Minister of Interior.

They can inherit the land as a statutory heir, but cannot register ownership and must sell the land within one year from the date of acquisition.
Land rights and land documents in Thailand,

A LAND TITLE DEED shows a person’s rights to land (ownership if it is a Chanote title deed) and registered encumbrances such as mortgages, leases, etc. on a property. Foreigners are not allowed to own land and cannot be named as the owner of land in Thailand but can be registered as the holder certain rights like lease, usufruct, habitation, superficial, mortgage

Chanote from the land title documents issued by the Thailand Land Department only the the Nor. Sor. 4 Jor (N.S.4 J.) or Chanote is a true land ownership title deed.

The 6 main title documents issued by the Land Department for individual use relate to temporary occupation, use and occupation, confirmed right of possession or notification of possession of land (i.e. the Sor Kor 1). In fact all the land documents issued by the Land Department, except the chanote, are still officially government land.

The Nor Sor 3 title deeds are rights of confirmed possession similar to ownership rights, however are not true ownership documents.
Overview of the main land titles issued by the Thailand Land Department:

NOTE: it is basically ONLY possible to register rights (sale, lease, superficial, etc.) with the Land Department and obtain official building approval over land with a confirmed right of possession (the Nor.Sor.3 land titles) or full ownership title

(Nor.Sor.4.Jor/ Chanote title deed). The modern land title deeds Nor Sor 3 and the Chanote issued by the Land Department should look as the document image above, but, depending on the period the document was issued the land ownership documents could vary in design, garuda color and even size.

The rights associated with land titles are in more detail described further down in this page. The most secure land title offering full individual ownership in Thailand is the Chanote (officially identified as Nor.Sor.4.Jor), followed by the Nor Sor Saam Gor/ Khor which offer confirmed right of possession. The Nor.Sor.3 without extension is less interesting, mainly because of the lesser rights and survey status associated with this title.

Sor Kor Nung (1)
The S.K.1 land document is a notification form of possession of land and has little real rights associated with it.

It entitles the holder to occupy and use the land (generally for farming). The person who actually occupies the land may have a better right than the person who has just a notification form.

This land may be sold and transferred by inheritance. Legally the transfer process is not more than handing over the notification form and possession or use of the land from one person to another.

It is not possible to register rights (sale, lease, mortgage, etc.) over this type of land. Depending on the land’s location, this document may be upgraded to a title deed Nor. Sor. 3, Nor. Sor. 3 Gor or Nor. Sor. 4 Jor (Chanote).
The Land Department has not issued any new Sor Kor Nung documents since 1972. It is currently NOT possible any more to upgrade a Nor Sor 1 to a full title deed with the Land Department

Nor Sor Song (2)
The N.S.2 is a consent letter issued by the land department to the holder. This document entitles the holder to occupy and use the land for a temporary period of time. The holder has to commence occupation and using the N.S. 2 land within 6 months and has to complete the utilization of the land within 3 years from the receipt of N.S.2. This land may not be sold or transferred except by inheritance. Depending on the land’s location, this document may be upgraded to Nor.Sor. 3,

Nor.Sor. 3 Gor or Nor. Sor. 4 Jor (Chanote), however, after the upgrade the prohibition for sale or transfer is still effective and in full force.

Nor Sor Saam (3)
The N.S.3 is a title deed which shows a person’s right to possess a certain plot of land, but the land borders must be confirmed with neighboring plots. There are no so called parcel points or numbered concrete posts which are hammered into the ground to mark the boundaries of the land.

The name showing on the title is the person who has the right to the land and has the legal right to possess the land and use the benefit of the land as an owner (it is not actual full ownership). This right will be recognized by the law and can be used as evidence in any dispute with an ordinary person or the government.

It is possible to register a sale or lease and apply and obtain approval to build on this land if building complies with relevant building regulations, zoning and or other laws (e.g. environmental protection). The owner may burden the land (mortgage, lease, etc.) and register this with the Land Department. The land may be sold subject to a 30-day public notice period.

A problem with the Nor Sor Saam title (as opposed to a Chanote or Nor Sor Saam Gor title) is that it is not true land ownership or confirmed right of possession but a right of possession over a land area without an accurate surveyed boundary which often lead to boundary disputes when transferring/selling or upgrading such land during the notice 30-day period and possible hostile possession over such land under the Civil and Commercial Code – i.e. claims over the land by someone else not registered as the person who has the registered rights to the land.

Nor Sor Saam (3) Gor
The N.S.3.G has the same legal basis as the Nor. Sor Saam however the boundaries of the land are defined and the land is accurately surveyed in relation to neighboring land areas (the land area parcel points are set by using an aerial survey), the right of use has been confirmed and legal acts concerning the land, such as sale, do not need to be published and it is possible to register rights against the land and subdivide the land in smaller plots.

Nor Sor Saam (3) Khor
The N.S.3.K is similar to the N.S.3 Gor however is surveyed and issued in an area which has no parcel points set by using an aerial survey. This document issued by land officer. There are no restriction for the use of the land and there is no need to publicize any legal acts, and it is possible to subdivide the land into smaller plots.

Nor Sor Si (4) Jor (Chanote)
The N.S.4.J or Chanote is a certificate of true ownership for land and the only true ownership land title deed. Land held under Chanotes are accurately surveyed and GPS plotted in relation to a national survey grid and marked by unique numbered marker posts set in the ground. Chanote titles are found in the more developed areas of Thailand. Legal acts (sale) do not have to be published. There are no general restrictions on the use and the land can be sub-divided.

NOTE: The land area as stated in the Chanote should be accurate, however, with the right connections it could have been manipulated. E.g. a Chanote states 3 Rai but the actual size after a private survey turns out to be 2 Rai. Land prices are usually expressed in Thai baht per Rai or for smaller plots Thai baht per Wah.

The sale and purchase agreement will (when it is upgraded between the sale and transfer) include something like ‘the size of the land appearing on the Chanote shall be final and the purchase price shall be adjusted pro-rata with the area appearing on the Chanote’. You simply pay for more land than you get.

Irregularities in the issuing of land-right documents showed there were land-right documents for about 200,000 rai where the Samui island only has 150,000 rai (July 19 2006).
NOTE If a squatter is in possession of land for an uninterrupted period of 10 years in case of a Chanote and have peacefully and openly possessed the property belonging to another, with the intention to be its owner he acquires ownership of it’), they can apply to the Land Office for a deed of ownership.

So, if you hold land under Chanote but a squatter takes possession and you do nothing to remove that squatter from the land for 10 years, then you could lose that land to the squatter. As this is only one year in case of possession it is not uncommon for someone else to claim possession over (part of) such land.

Nor Sor Ha (5)
The N.S. 5 is a document that verifies the right of the holder in the N.S. 5 land. If the holder has a N.S. 5 land document along with a utilization certificate it indicates that the district officer has confirmed the utilization on the land, so this NS. 5 land with the utilization certificate can be sold or transferred by registration at the land office. Without the supporting evidence in the form of a utilization certificate it indicates that the district officer has not yet confirmed the utilization of such and in this case may not be sold or transferred except by inheritance.

 

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