[I]t was announced that O-A Retirement visas are going to see the insurance coverage requirement go up to 100,000 US Dollars or self-insurance thereof, so roughly the equivalent of 3 million Baht basically shown in a Thai bank account in order to maintain O-A Retirement Visa status.

Meanwhile, insurance seems to be a rather nettlesome issue as a proposed “Tourism Fee” has proven difficult to implement while many question the need for such a measure especially as the tourism sector in Thailand is tenuously recovering. Although it now appears this initiative has been suspended. Another issue recently in the news, seemingly unconnected to immigration policy, pertains to Thai real estate law. It seems proposed “Long Term Residence Visas” (albeit something of a misnomer as these travel documents do not confer permanent residence in Thailand) may allow foreigners to own Thai real estate under limited restrictions. However, even this proposal seems to be under serious scrutiny. To quote directly from a recent article in the Bangkok Post:

A property executive who requested anonymity said many Thais might disagree with the government’s attempt to attract affluent foreigners by granting them full land ownership of one rai for residential use. “It’s good that the government wants to boost the economy by attracting foreign investment,” said the executive. “Thailand is very attractive among foreigners. They want to stay here as our medical services are good, the cost of living is low, the food is superb, and we have a lot of international schools for their children.” However, some locals think it is unfair to them, as many still cannot afford to buy property.

Clearly, the notion of foreign nationals being able to acquire residential real estate in Thailand is not a settled issue. Furthermore, based upon prior announcements from the Thai Land Office it seems that land ownership in Thailand associated with LTR visa status may never be a reality in Thailand.

SINGAPORE: Singapore will mark the 44th anniversary of the Association of South East Asian Nations (ASEAN) with a flag-raising ceremony at the Indonesian Embassy on 8 August. Indonesia is the current Chairman of ASEAN. Singapore’s Ministry of Foreign Affairs (MFA) said this year’s celebrations are particularly significant. It said this will be the first time that the ASEAN flag will be flown at all ASEAN member states’ diplomatic and consular missions in ASEAN countries and ASEAN’s dialogue partners and ASEAN Member States’ Missions where UN headquarters and offices are located…

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Frequent readers of this web log may recall that there have been significant discussions within ASEAN regarding issues such as a unified ASEAN visa, the exchange of University credits in an intra-ASEAN context, and a framework for dealing with issues pertaining to the South China Sea. As of yet, there has not been a full resolution regarding these issues, but the dialogue continues with many hopeful that ASEAN will be able to provide a strong platform for regional and global trade as well as business.

In news which is likely of more pertinence to those in Southeast Asia, it recently came to this blogger’s attention that there is further optimism regarding the Thai real estate markets. To quote directly from the official website of The Nation, NationMultimedia.com:

The property market will benefit from political stability and the government’s policy of boosting demand in the first-home market in the second half of this year, according to property experts. A survey of leading property firms by The Nation, seeking outlooks for the property market in the second half of 2011, found most believing that following the election, home-buyers will return to the market because of renewed confidence in political stability…

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Many foreign nationals in Thailand contemplate a Thailand property purchase either in the form of a Condo in Thailand or a house. In the case of a house in Thailand, it may be possible to enjoy the benefits of a Thai home notwithstanding restrictions placed upon foreign ownership of Thai land. In fact, through use of instruments such as Thai leases or Thai usufructs it may be possible to secure virtually total control over a home in Thailand. Some opt to secure their interest in a Thai house by bifurcating the title to the house from the title to the property (sometimes referred to as a Chanote). In any case, there may be ways in which a foreign national can enjoy the benefits of real estate in Thailand.

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The following is an example of how an escrow agent can be utilized in a situation where a foreign national wishes to purchase property in Thailand:

If a non-Thai national wishes to buy Thai property and hold the property freehold, then the options are limited. One of the most popular methods of purchasing Thai Real Estate is to buy a Thai Condo. Under the Thai Condominium Act, a foreigner can hold the Thai Chanote (or Title Deed) of a Condominium provided the Condominium Complex has 49% or less foreign ownership. Once the buyer and seller agree to a price the two parties can agree on an escrow agent and place the funds in the escrow agent’s care. The escrow agent will often agree not to disperse the funds until the parties agree to do so.

An escrow can be an effective way for buyers to be assured that there will be not fraud or misrepresentation in a property transaction. A common occurrence in Thailand involves property developers taking money for Real Estate construction and then failing to complete the project. Another, less common, tactic utilized by unscrupulous operators is to sell interests in property that the seller does not actually own. Using an escrow agent in tandem with a Thai property attorney to conduct due diligence can help ensure that a property buyer is getting what they pay for.

Until relatively recently, Escrow agents were not permitted to operate under Thai law. As Thailand does not have a common law tradition, the ideas of trusts and equitable title are not present within the provisions of the Thai Civil and Commercial Code. That being said, the government in Thailand understood the need to protect buyers and sellers from fraud. The need for “honest brokers,” to hold Thai property purchase payments was self-evident. The recognition of the need for escrows and escrow agents is a credit to the foresight of the Thai authorities. Hopefully, this marks the beginning of a trend toward more consumer protection laws to protect Thai property buyers.

One of the major problems that comes with purchasing Real Estate in Thailand is the de facto prohibition on foreign ownership of land in Thailand. Some people decide to use a Thai company to own land. This is possible although one needs to carefully construct the corporation so as not to violate the relevant laws regarding Thai “nominee shareholders.” Other less advisable methods are employed by foreigners to enjoy the benefits of property in Thailand. In some cases, a Thai spouse will put her name on the “Chanote” (Title Deed) while the foreign spouse actually pays for the property. This can be very disadvantageous because in transactions such as this the Thai Land Department will often require that the foreign spouse sign an affidavit explaining that the Thai property in question was not purchased with money provided by the foreign spouse and as a result the foreign spouse shall have no claim to the Thai property.

These type of disadvantageous scenarios create a situation where the foreigner’s interests must be protected while also remaining legal pursuant to the provisions of the Thai Civil and Commercial Code. In cases such as this, some foreign nationals opt to record a Thai lease. This instrument would provide property enjoyment rights for a maximum of 30 years. Another method that could be employed by a foreigner is the recording of a Thai Mortgage. This method would have the benefit of securing the foreigner’s monetary interest in the property. However, in many cases, the foreigner simply wants to have his interests in his home protected.  If this is the case then it may be best to bifurcate (split) the Title of the Real Estate.

Under Thailand Property Law there are ways of splitting the Thai Title Deed of a residential property. Basically, the foreign national could be designated as the Title holder of the physical residence (house) while the Title to the land remains in the name of a Thai national. By bifurcating the Title in such a way, the foreigner’s interests are better protected. That being said, it would probably be wise to contact a Thailand property lawyer to assist with creating the proper legal instruments as bifurcating Thai Title can be quite complicated and requires dealing with the Land Department of Thailand.

For more information please see property lawyer thailand or bangkok lawyer

(Please be aware: this piece is not legal advice. No lawyer-client relationship is formed by reading this blog post.)