Real Estate Law in Thailand
Generally, foreign individuals are prohibited from acquiring land in Thailand. However, there are some exceptions. Under the investment promotion law, for instance, foreigners may acquire land for business purposes.
Moreover, they can purchase condominium units as long as they retain records of their money being sent from overseas. Similarly, they can purchase a house by using a Thai company structure.
Ownership of land
Ownership of land in Thailand is regulated by the Real Estate Act. It covers the property fixed to or forming a component part of the land, as well as rights and obligations over that property. It is also governed by the Civil and Commercial Code. Generally, foreign nationals are prohibited from owning land in Thailand. However, there are some exceptions to this rule.
For example, a foreigner who is married to a Thai citizen can own their own land. In order to acquire this type of ownership, they must submit a letter of confirmation. This confirms that the money expended on the land is personal property of the spouse and not a joint marital asset.
In addition, a foreigner can lease land or houses in Thailand. However, the term of the lease is limited to 30 years if it is not recorded at the land office. This period can be renewed but it is not automatic.
A lease, or long term tenancy agreement, is a popular option for foreigners buying property in Thailand as direct property ownership outside of a condominium is prohibited. However, the nature of a lease is somewhat complicated and it is important to understand the legal implications of entering into one before purchasing any kind of landed property.
According to the Thai Civil & Commercial Code, a lease can last for up to 30 years. In order to extend it beyond that, a specific clause has to be inserted into the contract. A service or easement, on the other hand, cannot exceed three years and requires a written agreement between both parties and registration with the local land office.
There are many misconceptions surrounding the law of leasehold property in Thailand. Nevertheless, the most common is that it is a permanent property right. This is not true, and it is important to view a lease as a thirty year rental.
Right of superficies
A right of superficies is a real property right in Thailand. It legally separates ownership over the land and anything built on it. It can only be created over titled land administrated by the Land Department and is enforceable against third parties. It is often combined with a lease agreement and can be transferred to other people.
Foreigners can use a right of superficies to purchase condos in Thailand. It is an attractive option because it is not as restrictive as a freehold condominium. However, it is important to consult with a lawyer before buying a property in Thailand.
A right of superficies in Thailand is similar to a usufruct contract, which grants the rights of enjoyment and possession of property for a specific time. It can be registered for a period of up to 30 years, or for the life of the person who holds it. The right of superficies cannot be transferred to others, however.
Mortgages are a common way to finance property in Thailand. In the event that a mortgagee is unable to fully repay the debt, he or she keeps the property that was financed as collateral. However, mortgages are only available for Thai residents and foreigners who are married to a Thai citizen. Moreover, they must have an attorney like Silk Legal review their loan or financing agreement.
According to Thai law, a mortgage is a document that is created when movable property (such as shares) is delivered by the pledgor to the mortgagee in order to secure the performance of an obligation. This document is extinguished when the movable property returns into the pledgor’s possession.