Real Estate in Phuket Legal tips for property purchaser in Thailand
Sometimes it’s difficult for foreigner to understand Thai legal norms and rules that govern the search and purchase of real estate in Thailand. Let’s try to understand together.
In Thailand, there is a strict rule that land can not belong to foreign person on the right of ownership. Similar rules exist in China, Vietnam, Switzerland, the Czech Republic, in Bulgaria and other countries.
What is the way out there, if you wanted to buy some Thai land or house together with the land? The easiest and most legal way – long-term lease of land. The maximum term lease in Thailand – 30 years, with the agreement usually provides two renewal term up to 30 years each. Total – 90 years. Quite simple and safe. Pay attention only to lease renewal conditions set forth in the contract. There should be clearly stated and understood that the landlord has the right not to renew the lease for a further period if the tenant does not violate the terms of the contract.
According to the established practice of selling on the island you can offer other ways of registration of land, of which there may be many. Here are the two main ones:
1. The opening of your participation, which will be issued land. Thai law does not prohibit the Thai companies to own land, but you should know that in such a company must have at least 51% of the shares beneficially owned by the Thai citizens who are actually involved in the company. In the case of nominal stock ownership in order to obtain a foreigner 100% control over land, the transaction may be considered fictitious and therefore null and void, and the participants will incur administrative and / or criminal liability.
2. Buying shares of an offshore company, which in turn is a shareholder of the Thai company, which owns the land. In this method, the same drawbacks as the previous. Moreover, in this case, you will not have any documents on hand on the ground, other than an instrument of buying shares of an offshore company.
It should also be noted that the right to own land in Thailand, there are different statuses (Titles) – Chanote, Nor Sor 3 Gor, Nor Sor 3 and others. The most complete status of ownership and disposition of the land – is Chanote, it also allows you to have the most accurate determination of location of the site. The rest of the statuses listed above also allow you to purchase the land, but with some restrictions, and without reference to the exact location. Operations with land plots have to register with the Land Department of the relevant area. Transfer of the right of ownership for a period of not more than 3 years is not subject to registration.
Due to the fact that the land in Thailand have moved into the public domain for a long time, it is important to check the history of the acquired land for litigation, bank deposits and succession. The land, located near the sea and in the nature reserves are not subject to alienation.
Villas in Thailand can be owned by foreign private person and by foreign or Thai company. In Thailand, there are no restrictions on the number or total size of homes purchased by foreigners. Since you purchased villa is inextricably linked with the land, which can not be your property, it is important to properly secure their legal rights to the house and provide for the lease of land in the relevant provision governing the status of the house in the event of early termination or non-renewal of the lease for a new term.
If the house is transferred together with the furniture, before the conclusion of the contract of sale is desirable to agree to sign and make an integral part of the contract a list of all the furniture, which are passed along to the house. When selling a villa at the time of registration of the transaction or at the time of invasion in the house (depending on which of these events happened before) the seller must provide the buyer with a certificate that it has no debt to pay for utilities and maintenance of common areas, as well as transfer architectural plan of the house.
The document confirming the right of the house is a contract of sale concluded in the Thai language on the approved form and a certified red seal of the Land Board. Together with the documents home seller must give the buyer the house register (Blue Book or Tabien Baan), which should include all persons living in the house. Do not be alarmed if, after the registration of the transaction in the book stated no one living – by the rules of filling this document it includes only information on living in the house of Thai.