Legal Land Ownership in Thailand

Koh Samui, Thailand - Land Ownership In Thailand

Thailand employs a land titling system whereby ownership of real property in the more developed areas of Thailand is evidenced by the issuance of a title deed or ¡°Chanote ti din¡±. Chanotes are issued by the Provincial offices of the Land Department and are surveyed using modern survey techniques, plotted in relation to a national survey grid and typically marked by numbered cement posts . Chanotes may be sold, leased, used as mortgage collateral, etc¡­

In less developed areas of Thailand ,www.vollmerwatches.cn ownership rights are evidenced by lower level possessor rights documents or testimonial deeds such as the Nor. Sor. Sam. or the newer Nor. Sor. Sam. Kor. In many respects the Nor Sor 3 Kor and Nor Sor Sam are similar to the Chanotes as they are issued and maintained by the District land office may also be sold, leased, used as mortgage collateral etc¡­

The Nor. Sor. Sam is less accurately surveyed than Chanote titles, as their boundaries are recorded in relation to the adjacent plots and survey errors in length of boundaries or total area of the plot are not unusual. It is also important to note that the Nor. Sor. Sam. requires that 30 days public notice be issued prior to the registration of the change in status (i.e. encumbrance, sale, servitude, etc¡­) of the relevant land. When purchasing Nor. Sor. Sam. land that lacks clearly defined boundaries, it is recommended to engage the services of a reputable surveyor to confirm location of boundaries and confirm the size of the plot. Please note that irrespective of the surveyors finding, the Land Department¡¯s survey will be deemed superior to that of a surveyor, but the surveyor¡¯s findings may expose potential issues related to the land purchase that may be resolved with further negotiation.

The Nor. Sor. Sam. Kor. is more accurately surveyed due to the Land Department applying newer survey techniques. Each plot is cross referenced to a master survey of the area with a corresponding aerial photograph. There is no public notice requirement for the registration of the change in status of land designated as Nor. Sor. Sam. Kor.

LAND MEASUREMENTS

The size of a parcel of land is denoted using 3 principal units of measurement: Rai, Ngarn, and Square Wah, which have the values provided below:

1 Rai = 4 Ngarn

1 Ngarn = 100 Square Wah

1 Square Wah = 4 Square Meters

1 Rai = 1600 Square Meters

1 Acre = 2.529 Rai

1 Square Meter = 10.764 Square Feet

DUE DILIGENCE

Due diligence is a recommended precursor to the acquisition of land in Thailand . The actual focus and steps of due diligence involved will greatly depend upon the facts surrounding the nature, location, and intended use of the land. We note that situations can exist or arise that warrant an increased level of scrutiny prior to making a decision to acquire land in Thailand . In practice, the actual scope of due diligence will develop through the due diligence process itself. However, due diligence for the acquisition of real property in Thailand should always consider the following:

(i) The legal description and details of the land as recorded with the Land Department (i.e. size, location,).

(ii) The Register of Records on the reverse side of the title document to the land should be reviewed. We note most official encumbrances will be registered on the title of the land including mortgages, leases, redemption rights, etc.

(iii) The source of the title being conveyed should be examined at the Land Department. Many title documents begin as land claim documents (i.e. Sor. Kor. Nueng . , Tor. Bor. Tor. Hoc. and the Tor. Bor. Tor. Ha.) which are essentially forms of squatter or settler claims filed with the district office. These land claims were eventually upgraded to a form of title that can be bought, sold and mortgaged (i.e. Nor. Sor. Sam., Nor Sor Sam Kor or Chanote).

(iv) A review of the record at the Land Department regarding any pending or potential legal actions involving the property should be conducted.

(v) An attempt should be made to verify whether any rights have been given to adjacent property owners with respect to access to property. The review of the Register of Records as set forth in (ii) above would evidence whether any such rights have been officially registered. However, due diligence should also consider whether such rights have been conveyed contractually.

(vi) Should the purchase of land be made in consideration of its location relative to a beach the due diligence process should consider the location of easements, servitude, or other points facilitating access to the beach.

(vii) The zoning map for the area where the property is located should be reviewed to ensure that there are no restrictions that would prevent the buyer from using the property for the desired purpose.

(viii) The Ministerial Regulations of the Building Control, Act B.E. 2522 governing the construction of buildings in the area where the property is located should be reviewed considered with bath Toys respect to the relevant property. The Ministerial Regulations will set forth restrictions related to the size of the any building located on the property, the minimum distance required from the beach, and height restrictions.

(ix) The master plan at the local government office should be examined to ensure that there are no approved plans to construct roads, piers or other infrastructure on or near the target property, which may not be reflected in the title documentation.

(x) Due diligence should include a physical inspection of the land, during which a buyer should look for evidence of squatters, such as foot paths or other makeshift structures. Evidence of prior use and related environmental impact should also be considered when conducting a walk through. The condition of access roads, location of utilities, water and sewage systems if any, should also be identified.

Generally, the foregoing matters can be verified independently through accessing records at the Land Department, local government offices and the Forestry Department. However, it may also be necessary to interview the seller as well as adjacent property owners.

RESTRICTION ON FOREIGN OWNERSHIP OF LAND AND OWNERSHIP STRUCTURES

Foreign ownership of land is expressly prohibited under Thai law except under a limited circumstances, which typically do not apply acquisition of land for residential or vacation purposes. Accordingly, foreign participation in the purchase of land is typically structured through the use of a majority Thai ¨C owned private limited company. A common structure, though not necessarily recommended, involves the issuance of 2 classes of shares, common and preferred, where the foreign beneficial owners holds preferred shares equaling 49% of the private limited company¡¯s equity and trusted Thai nominees hold the remainder on behalf of the foreigner. Furthermore, the control over the private limited company is maintained by the foreign beneficial owner through weighted voting and all economic benefits, costs and risks are allocated by means of a shareholders agreement and changes to the registered bylaws protecting the minority shareholders interests.

Please note that there a number of different replica handbags ways of structuring land holding vehicles and each structure will take into consideration the nature of the project, goals, as well as source funds and partnership structure. Accordingly, it is crucial at this stage to seek the advice of a professional so as to ensure that your vehicle compliments your undertaking.

ALTERNATIVE TO FREEHOLD STRUCTURES

As an alternative to the use of a private limited company facilitating freehold ownership, some foreign nationals may elect to enter into a long-term lease land for 30 years with 2 consecutive options to renew such lease for an additional 30 years each. Thai law provides that a lease of immovable property for any period greater than 3 years be registered with a competent official of the Provincial offices of the Land Department in the district that the property is located. In order for the renewal options to be enforceable under Thai law, the lessor is required to offer in advance to extend or renew the lease on the same terms of the original lease. Thereafter, the tenant needs to accept the lessor¡¯s offer in the form prescribed in the original lease agreement. Accordingly, if the original lease agreement is executed and enforceable, so is the option for the second lease term. Please note, however, any offer by the lessor for a second term must be sufficiently clear in the initial lease agreement with all essential terms and conditions specified clearly and not subject to further negotiation.

The above methods of securing a long term interest in real property requires legal knowledge and experience and it is important to approach any purchase with the same level of caution that one would have in their home country. By employing the services of a reputable professional who can explain matters in a familiar language, pitfalls can easily be avoided. If these aspects are considered thoroughly, the purchase of real property in Thailand can be a rewarding experience from both a lifestyle and financial point of view.