UNDERSTANDING “TITLES DEEDS” IN THAILAND 

There is a great deal of confusion amongst foreigners regarding land ownership and other rights in land as well as the various forms and levels of ownership interests in Thailand.  Thai land law derives primarily from two root sources, the Thai Civil and Commercial Code and The Condominium Act of Thailand (as amended). Also, certain provisions of the Consumer Protection Act apply to contracts for Condominiums under development.   English translations of these source documents may be viewed at:

• Thai Civil and Commercial Code (Real Property Sections) 
• The Condominium Act 
  

In short, however, the following is a brief description of Titles, Deeds and other rights in real property in Thailand.

Land ownership

 Ownership of land or possessory rights may be evidenced in one of the following ways:

Title deeds

Thailand has a system of land titling similar to the Torrens system in Australia. An ownership deed, known in Thai as a Chanote, is issued in several copies, one copy for the owner, the mortgagee, etc., and one for the official records of the Land Department. The title deed contains the title number, a description of the land, including the area, boundaries and marking posts, details of the registered owner of the land and any mortgages or other encumbrances registered against the title, together with a history of all registered transactions concerning the land.

A title deed, or at least the Land Department copy, is the best evidence of ownership. The registered owner may transfer ownership or grant other rights by presenting his original title deed at the Land Department together with the appropriate contract (sale, lease, mortgage, etc.) The transaction can be registered immediately, and there is no waiting time required in order to effect registration. Title deeds are issued mainly for land in urban and other built-up areas.

Please note that all such documents are in the Thai language. As part of our property conveyancing services, all Thai language documents involved in your transaction will be translated to the English language.

Confirmed Certificate of Use

A Confirmed Certificate of Use or Ngor Sor Saam Gor is quite similar to a title deed and is, in fact the last interim step towards a property being issued a true title deed [Chanote]. A Confirmed Certificate of Use certifies that the person named in it has the right to use the land and that his right has been confirmed, that all requirements for the issue of a title deed have been met and the issue of the title deed is pending the issuance of title deeds in the area concerned. A transfer of this certificate is made at the Amphur (District Office) office rather than at the Land Department. Transfers of a Confirmed Certificate of Use may be made without the need to post a notice or for a waiting period to elapse.

Certificate of Use

A Certificate of Use or Ngor Sor Saam  is similar to the Confirmed Certificate of Use, except that not all the formalities to certify the right to use have been performed. In other words, it has not been “confirmed”.  The underlying rights are essentially the same.  The Certificate of Use may be transferred at the Amphur, but before a transfer can be made, it is necessary to post a notice of intent and then to wait for a period of 30 days to elapse to see if any person objects to the transfer.

Certificate of Possession

A Certificate of Possession or Sor Kor Neung  is a recognition that a person is in possession of land, but the certificate does not

imply that there are any specific legal rights associated with the possession. A Certificate of Possession cannot be transferred, but a person in possession may transfer physical possession and the new possessor may apply for a new Certificate of Possession. Certificates of Possession are common, mainly in rural areas. Their issuance must precede the issue of a Certificate of Use.

Tax Receipts

A person may pay local development land tax and use the tax receipt as evidence of possession. The tax receipt does not confer any rights but may be useful in applying for a Certificate of Possession.

Possession Only

A person may be in possession of land without any documentation at all. Depending on the nature of the land involved and other possible claimants, including the government, mere possession could possibly, step by step, evolve into documented possession and ultimately, to the issuance of a title deed. Mere possession can be transferred from one person to another by an agreement in writing. (Such an agreement cannot be registered.) The transferee does not obtain any right greater than the transferor had.

Ownership by Adverse Possession

Ownership of immovable property can be obtained by adverse possession for a period of ten years. Ownership so obtained is superior to the ownership shown on a title deed or other similar document. The court may order that a new title deed be issued to the adverse possessor, subject to adequate proof. However, ownership cannot be obtained to state property within the public domain, by adverse possession.

Executory Contracts of Sale

Contracts to transfer immovable property at some future date are specifically enforceable; however, these contracts generally cannot be registered, and so it is possible for the seller in the interim period to transfer good title to a third party. There is therefore little protection for would be buyers who enter into contracts to purchase immovable property in the event that the seller becomes insolvent or sells to someone else.

Transferring Ownership

Ownership is normally transferred by a contract in writing made before the appropriate official at the Land Department or Amphur. The transaction is recorded on the title deed or other document, and copies of the supporting documents such as the contract for sale, lease or mortgage are retained in official records.

With respect to land, the purchaser, if a natural person, must prove that he has the right to acquire it by proving his Thai nationality. For example, if the purchaser's father was not Thai, the purchaser may have to show documents to prove that he has completed his Thai military service. Thai women with foreign fathers may have to prove that they are not buying the land for use by their fathers.

Foreign Ownership

There is a common misconception that it is completely illegal under all circumstances and at all times for foreigners to own land in Thailand. There are, in fact, legal provisions which allow foreigners to own land, but only with permission of the Interior Ministry and other relevant agencies. Unfortunately, such permission is rarely given thereby creating a de facto prohibition, precluding foreigners in almost all circumstances from directly owning land.  Many Thai academics and business figures frequently argue that the restrictive Thai policy on foreign land ownership actually hurts Thailand economically and in terms of development of the agriculture sector. Those “voices crying in the wilderness” notwithstanding, the objections to foreign ownership of land are deeply ingrained in the psyche of the Thai public, right or wrong, and we see little chance of that changing in the near to mid term future. At best, extensions of the length of permissible leaseholds from the current 30 year period to 50, 60 or 90 years may, at some point, be politically possible, particularly for single residential use.

The law generally restricts the right of foreigners to buy or own land unless there is a treaty allowing such ownership, or the foreigner has received special permission. All previously extant treaties allowing foreigners to buy or own land have now been abrogated. Foreign ownership of land is currently possible in the following cases:

1. The Board of Investment has power to permit majority foreign owned promoted companies to own land in connection with a promoted business.
2. Majority foreign owned Thai companies may own land in industrial estates owned by the state-owned Industrial Estates Authority of Thailand.
3. Permission for land ownership may be granted to petroleum concessionaires under the Petroleum Act, for use in approved projects.
4. Banks and financial institutions that have become foreign owned with Bank of Thailand consent, may own land, or acquire land through debt restructuring proceedings, on the same basis as Thai-owned financial institutions.
5. A foreigner who invests at least 40 million Baht in authorized securities in Thailand, may be granted permission to purchase up to one rai (roughly 400 square meters) of land for residential purposes, subject to other requirements.
6. Property funds licensed by the Securities Exchange Commission, may have all their units owned by foreigners. Such property funds are subject to minimum investment and other requirements.

Anti-Nominee Provisions

Under the present law, a Thai company that is at least 51% Thai owned may purchase land. In the past, foreigners sometimes purchased land using companies that were 49% foreign owned and 51% of the shares were held by Thai nominees.

In May 2006, the Ministry of the Interior issued a letter to all Land Departments specifically citing foreign ownership of land through Thai corporate nominees and announced their intention to more strictly enforce the law with respect to anti-nominee provisions. It applies to all companies or partnerships where there are any foreign shareholders, directors or partners. In such cases, where it is reasonable to believe that a Thai is holding shares on behalf of a foreigner, then the Land Department is entitled to investigate the income, background, current employment and salary, and call for evidence regarding such matters in order to determine if they are in fact the real party in interest with respect to the company and land purchase or, if they are simply a nominee for a foreigner. If a loan was used in connection with the purchase, evidence of the loan can be called for.

If after investigation it appears that the transfer of land was intended to avoid the law, or a person is buying the land for the benefit of a foreigner, then Land Department officers are obligated to refer the case to the Land Department in Bangkok for further consideration.

There is no reference in the regulation to penalties. A directive could however be issued that the application to register the transfer should be refused.

Please note that the anti-nominee provisions of the law are primarily directed towards corporate nominees and are not intended to prevent the Thai spouse of a foreigner from legitimately holding title to land in Thailand. There are specific, transparent procedures by which Thai spouses of foreigners may register land in their names.

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THAICONDOLAW.COM, THAICONDOLAWYER.COM, BKKCONDOLAW.COM AND BKKCONDOLAWYER.COM are public information resources of White & Weber Ltd., Attorneys at Law. We are committed to making the confusing Thai property ownership system more understandable to, and more “user friendly” for, our clients and the general public. We are dedicated to protecting our client’s rights and promoting their understanding of those rights. Thailand is our home and we are happy to help you in making it your home as well.