Integrity Legal

Thailand Real Estate law is a complex area of jurisprudence. Many people, particularly foreigners, have misconceptions regarding what type of property rights can be accrued by non-Thais living in Thailand. First there is the mistaken belief that foreigners cannot own land. In reality, there is merely a de facto prohibition regarding foreign land ownership. A foreigner can own land in Thailand, but he or she must obtain approval from the Thai Minister of the Interior which can be a difficult proposition.

Another slightly incorrect idea circulating in the Thailand expat community is that one cannot obtain a lifetime right of use in any type of Thai real estate. However, it may be possible to acquire a usufruct which would give the person holding the usufruct the right to use the land or the structures thereon for their lifetime.

A 30 year Thai lease can also be acquired for Thai property, but it must be properly registered with the local land office. Another common misconception is the idea that one can have a 3 year “automatically renewing” lease in Thailand. This mistake would seem to stem from the fact that an unregistered Thai lease is enforceable for up to 3 years, but one needs to continually get a new lease from the land owner in order for the lease to rollover.

Recording a Thai mortgage is one method often employed by foreigners resident in Thailand who finance the purchase of property in a spouse or loved one’s name. If the foreign national ever wishes to retrieve their interest in the equity of the property, then all they need to do is foreclose on the property in order to re-acquire their funds.

There are some issues when it comes to recording these types of property interests where a third party has encumbered the Thai property by recording a mortgage at the land office. Thai banks often provide mortgages on Thai property and in order to obtain some sort of property interest in the encumered real estate one must first obtain permission from the bank. Therefore if one wishes to obtain a 30 year lease or a lifetime usufruct on the encumbered real estate owned by another, then it may be wise to contact the bank which holds the mortgage and inquire as to their position on recording leases on property they have an interest in. Sometimes, retaining the services of a competent Thailand property lawyer can be beneficial in such matters particularly as an experienced Thai real estate attorney can predict the likelihood of bank acquiesence.

Tags: Thai Lease, Thai Mortgage, Thailand Property Law, Thailand Property lawyer, Thailand Real Estate Law, usufruct
Posted in Thailand Property, Thailand Real Estate | No Comments »