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Further Reading:

Condos and Land Titles and Foreign Ownership

Last month I discussed the main types of land title existing in Phuket. I will now briefly cover Condominium Title and building ownership since they are very relevant to today’s main topic, - land rights allowed to aliens (that means you and me; unless of course you are a Thai national).

A condominium title (first established under the condominium act of 1979) is a title to a part of a building or buildings with multiple owners, and a fractional interest in the land (always a Chanott) and other common assets (such as a swimming pool) and common parts of the building (such as the stair well or lobby). The title will state the floor area of the private apartment, the ground area of the common land and the percentage interest which that apartment has in the common property. This then also represents the value of the voting interest in the condominium company or owners association.

Buildings other than condominiums do not have any form of title document, but their sale or long lease can be registered at the Ampher (district) land office. Proof of ownership, must be established either from proof of construction or document showing previous sale-purchase (do not confuse this with the House License document, which is only a register of the houses occupants). For the above reasons, transfer of a building as distinct from it’s land requires the posting of 30 days public notice (to see if anyone wishes to contest the ownership).

Foreign nationals (aliens) may own a building (as distinct from it’s land) and may register such transfer of ownership into their names at the local district office.

Subsequent to an amendment to the condominium act three years ago, aliens may also own (subject to certain important qualifications) up to 40%, by floor area, of the units in a registered condominium.

The qualification most likely to enable an alien to purchase a freehold condominium is providing evidence that the funds used for the purchase of the unit have come from abroad. Before making any large transfer relating to a condo purchase be sure to check with the vendor, your lawyer or a local bank the correct procedure for remitting funds or you may not qualify for foreign freehold.

Foreign nationals may not own freehold land of any type. There are no significant exceptions to this rule except for the fractional interest implicit in a condominium title.. Foreigners may however acquire long term lease rights to land and these rights can be registered for term of up to 30 years.

For any foreigner interested in acquiring property rights for any type of property other than a condominium (which subject to the 40% limitation may be purchased freehold) a long term lease is in most cases the best approach.

If you are thinking of starting a business in Thailand you might consider establishing a company in Thailand and acquiring the property in the companies name, but don’t be fooled into thinking this is an easy and painless way to navigate around the laws with respect to alien ownership of land.

While a lease may only be registered for 30 years and a simple standard lease agreement will default to the rather limited rights laid out in the land code, a well written lease can allow for multiple lease extensions, full transferability of lease rights, and within certain limitations the rights to be able to convert the lease rights to a freehold if the law should in the future allow alien ownership of land, or in the event that the lease rights were to be transferred to a Thai national. In short, a well written lease you may be able to have almost all the security and potential for capital appreciation of a freehold owner, yet stay within the bounds of the Thai land code.

A final caution - repeated from last month. The full details and interpretation of the land code and the drafting of a good lease agreement are complex matters, so before entering into any property acquisition please speak with either a local lawyer or an experienced real estate consultant and be sure that he fully understands you and your objectives and that he is able to clearly explain to you all aspect of the transaction in question.