Purchasing a property in Thailand is a bit complicated especially for non-Thai nationals. The laws of the Kingdom prohibit the foreigner to own a land in Thailand except for condominiums or property in leasehold basis. Yet it may still be difficult and a risky venture to do so.
But if it is your intent to purchase a property, you need to know basic facts in property ownership in Thailand.
You need to secure the services of a property agent who is an expert in Thai real estate, laws, language (Thai and English) and local knowledge. The agent will be the one who will search for properties in certain areas basing on your wish list. They will also act as your representative to the seller of the property and negotiate the price for you. The property agent can also determine if the 49% maximum foreign ownership of condominiums in one building is not yet fully consumed by the time you purchased your unit.
Being a foreigner, no matter how much hard work you give in doing research about the geographical area, the developer of the units and the current property market, your knowledge of the property you want is still lacking.
You do not know the area, you do not know the language and you do not know the community. All of these make you like an easy wandering prey for fraudulent individuals and companies.
Legal Planning and Support
It is very difficult for a foreign buyer to deal in and register the purchase of a property in Thailand without the services of a reputable lawyer. In fact, a lawyer is the key element in your ownership process of the property. You need to know the legal facts before agreeing with the seller, signing any contract or paying anything to secure your hold on the property like deposits. As a reminder, a property purchase of any scale is a big investment and it has the potential to affect a person’s life in a greater scale.
The laws in your home country may be the same in some aspects with that of Thailand’s but can also be hugely different at the same time. Your knowledge of the language, the methods and processes in property ownership in Thailand is probably quite different in any case.
Even if you are very familiar with the language and laws of the Kingdom, still, you need the services of a lawyer or solicitor to review and interpret the contents of the contracts and agreements you are about to enter. After all, they have the requisite knowledge in the legal processes.
Method of Ownership
As a foreigner, you are allowed to register a property under your name if such property is a condominium. If you are interested to own a land, you are prohibited to do so. Only you can register a land in your name through a long term lease of the land. With lease agreement, you are still not the owner of the land but you are the registered owner of the building built above it. You can transfer the ownership of the building through a sale, to sublease or have the first option to buy the land in freehold ownership should the government allow foreigners to own land in the future.
Another essential element is the title investigation. This involves a tedious effort in examining the title deed of the property through the records at the Land Department and courts. The title search reveals if the seller is the actual and registered owner of the property. It also reveals the previous owners (even up to the first owner) of the property, the right to access, residential zoning (there are areas in Thailand wherein condominiums are not allowed to be constructed upon), environmental and planning codes as well registered mortgage or liens attached to it. It is important to make sure that you can build structures on it otherwise you will be forced to make use of what is already there because you are not allowed to do extensions that suits your needs.
As a sign of good faith, you are asked to make a deposit. This acknowledges your satisfaction of the said property. The seller then reserves the property for you and starts making drafts for the contracts. To make sure that you will be refunded of your deposit in case of non-compliance of the seller to the agreement in the future, you can write the “get-out” clause in the contract.
Now that all are in place and both parties are ready to enter into a contract, the seller will prepare a contract for you. A lawyer or solicitor who is an expert in Thai real estate and is good at both Thai and English will be of great help for you in this process, therefore, it is highly recommended that you will hire his services.
The lawyer or solicitor will review the terms and conditions if they serve your best interest. He will also interpret certain clauses and terms you are not familiar with and explain them to you.
You will need to emphasize certain conditions to preserve your interest like: protection in case of delay, penalties in case of late payments in your part and third, practical payment schedule. Remedies for these issues should be properly stated in the contract.