Land Law In Thailand

Land Law in Thailand: A Foreign National’s Guide to Property Investment 🇹🇭🏡

Many expats wish to invest in Thai real estate which is governed by Land Law in Thailand. While Thai law generally restricts foreign nationals from owning land, the Thai Civil and Commercial Code (CCC) provides robust legal mechanisms to secure property investments. Understanding these mechanisms is the foundation of secure investment.

Our legal experts at Anglo Siam Legal specialize in providing solutions to secure a real estate investment through legal arrangements like a lease, superficies, usufruct, Sap Ing Sith, or Thai company structure. We’ve been looking after the Property Law in Thailand interests of overseas and expat clients since 2006, advising on all aspects of land and property and how best to protect the assets involved.

Overview of Land Law in Thailand

Thai Land Law is governed primarily by the Land Code Act B.E. 2497 (1954) and Book IV of the Civil and Commercial Code (CCC), which defines the different types of property rights.

Whilst land will be owned by either a Thai National or in some cases by a Thai limited company (though this comes with high scrutiny and risk), the vast majority of foreign nationals will not be eligible for direct land ownership (condominiums follow different rules). However, the CCC outlines several registerable rights that allow foreigners secure, long-term use and control over property.

Areas Covered by Property Law in Thailand (Book IV of the CCC)

The CCC establishes and governs the various “real rights” (rights in rem) over immovable property, which are legally registered on the land title deed (Chanote) itself, making them enforceable against the world, including any future owner of the land.

The key registerable rights for securing property interests include:

Leases (Hire of Property): Governs rental agreements, specifying terms and registration requirements.
Usufruct: Grants rights to possession, use, enjoyment, and management of a property.
Superficies: Grants the right to own buildings, structures, and plantations upon or under the land of another person.
Servitudes: Provides a limited right over the land of another, such as a right of way.
Mortgage: Allows land to be used as security for a loan.

Secure Investment Options for Foreign Nationals

Foreign nationals can protect their assets in the following legally secure ways:

1. Leases (Hire of Property)

CCC Sections 537 onwards.
A popular way for foreigners to guarantee that they will be allowed to stay on a property is to make a lease agreement (or rental contract). The Commercial and Civil Code of Thailand use the term ‘hire of property’ at sections 537.
Under Thai law, the hire of immovable property must be made in writing and if the lease or contract is for more than 3 years, it must be registered at the local Land Department.
The maximum term for a lease is 30 years (Section 540 of CCCT) and it can be renewed.
The lease can only be registered on title deeds such as Nor Sor Sam, Nor Sor Sam Kor or higher (like a Chanotte). When a foreign national registers any lease at the land department, his name will be written in Thai on the title deed, with the length of the agreement, and the date of registration. A small land tax (currently 1% of the entire rental value) is payable upon registration.
Expert Drafting is Key: It’s important that your lease agreement is well drafted as there are many clauses that can be added to protect your interests. For example, will you be permitted to sublease the property to a third party? What about the renewal? Would you like this contract to be transferred to your heirs?

**2. Usufruct (Sidhi Kep Kin)**

Property Law in Thailand Section 1417 onwards.
This section states that immovable property may be subject to a Usufruct by virtue of which the usufructuary (the foreigner) is entitled to the possession and use and enjoyment of the property and has the right of management of the property. This right can be created for a period of time or for the life of the usufructuary. This can be used for land and where there is a house upon the land.
The right is registered on the title deed itself and is authenticated by and kept updated by the local land office where the property is located.
Limitation: The Usufruct ends with the death of the Usufructuary and cannot be left to heirs within a last will.

**3. The Right of Superficies (Sidhi Nuea Peun Din)**

Property Law in Thailand Sections 1410 onwards.
It’s a real right, meaning it’s attached to an immovable property, a thing, and not a person. So, the owner of the land can change, but this right will stay until it’s extinguished by the contract made between the parties.
By giving the right of superficies, the owner of a piece of land creates in favor of another person, the superficiary (a Foreigner or a Thai national), the right to own upon or under the land, buildings, structures and plantations (Section 1410).
Key Advantage: Unless otherwise provided, this right is transmissible to your heirs by way of inheritance (section 1411).
Generally, the right of superficies will be added to a lease agreement on the land and both contracts will have the same length of time (maximum 30 years). Renewals are possible.
Like a usufruct agreement, superficies must be registered on the title deed to be valid. There is a tax of about 1.1% to pay directly to the land department for the full agreement, if given for consideration (money).

Additional Supporting Legal Documents

Memorandum of Understanding, MOU

An MOU is a personal document or contract that can be drafted to cover a wide range of agreements. For Land and Property, the MOU is vital as it can:

Accurately cover where the finances came from to buy land or property, whose money it was, and what it was for. This is particularly important as the Land Office can ask the Thai national owning land and granting one of the agreements above to sign documentation to the effect that the money used to purchase the land was the money of the Thai and not the foreign national being granted a right. An MOU can document the actual circumstances accurately.
Cover division of assets upon separation of a relationship.
Restrict the sale of the asset by any parties and document both parties’ clear intentions and agreements should any future problems arise.

Last Wills

We advise all parties subject to land purchases and agreements with regards to property law in Thailand to have a Last Will governing Inheritance drafted. Thai Inheritance without a Last Will follows the line of succession and is a long, drawn-out process. A professionally drafted Will streamlines the process and ensures your assets and long-term rights are transferred to your intended beneficiaries.

The Crucial Need for Expert Legal Representation

As a foreign national, securing real estate interests under Land Law in Thailand is complex. Relying solely on verbal agreements or improperly drafted documents exposes you to significant risk, including loss of investment.

Expert legal representation from Anglo Siam Legal is vital because:

Security and Validity: We ensure that leases, Usufruct, and Superficies agreements are correctly drafted, meet all requirements of the Civil and Commercial Code, and are legally registered at the Land Department, making your rights enforceable against third parties.
Mitigating Risks: We help you avoid illegal nominee structures and protect your financial contributions through robust MOUs, clarifying the true financial nature of the investment.
Succession Planning: We ensure your Last Will is correctly prepared under Thai law to maximize the transferability of your assets and protect your heirs from complicated probate proceedings.

The above documents are important and must be drafted professionally to accurately reflect the position, intentions, and agreements between parties. We would be happy to draft any legal documents required to assist you in any purchase or agreement you are looking to enter into.

Contact Anglo Siam Legal Today

We hope that the above information assists. Should you have any further questions, please do not hesitate to get in touch.

Email Us: info@anglosiamlegal.com

Visit our Website: https://anglosiamlegal.com

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Land Law In Thailand