Title Deed in Thailand. In Thailand, title deeds are critical legal documents that define land ownership and usage rights. The Land Department of Thailand is responsible for issuing and maintaining these documents. There are different types of title deeds, each providing varying degrees of ownership security and rights. These include the Chanote (Nor Sor 4 Jor), which provides full ownership, and other titles like Nor Sor 3 Gor and Nor Sor 3, which grant possession but lack precise land boundaries and ownership clarity.
1. Types of Title Deeds in Thailand
Understanding the different types of title deeds is crucial for anyone interested in property in Thailand. The main types include:
a) Chanote (Nor Sor 4 Jor)
The Chanote is the highest level of land title in Thailand, offering full freehold ownership with precise boundaries that are surveyed using GPS technology. Land under Chanote can be sold, transferred, mortgaged, or used as collateral. This type of title is highly secure and preferred for real estate transactions due to its accuracy and clarity.
- Ownership Rights: Full, unencumbered ownership.
- Use: Best for high-value transactions and investment.
b) Nor Sor 3 Gor
This title provides possessory rights, similar to the Chanote, but with less precision in the land’s survey. It can still be used for selling or transferring land but is less secure than a Chanote. Owners can apply to upgrade this title to a Chanote for full ownership.
- Ownership Rights: Possessory rights with the ability to transfer or sell.
- Use: Suitable for transactions, but requires caution due to potential boundary issues.
c) Nor Sor 3
The Nor Sor 3 title indicates possessory rights but lacks a clear survey. The land has not been fully measured, leading to potential disputes. While still legally recognized, this title offers less security compared to Chanote or Nor Sor 3 Gor. Buyers often try to upgrade it to a higher title.
- Ownership Rights: Possessory rights but with unclear boundaries.
- Use: Should be approached with caution, particularly for high-value land.
d) Sor Kor 1
This is a possessory right to land but does not offer ownership in the legal sense. It is more commonly found in rural areas and is typically not recommended for investment. This type of title can eventually be upgraded to Nor Sor 3 or Nor Sor 3 Gor.
- Ownership Rights: No legal ownership, only possessory rights.
- Use: Common in rural land holdings but requires significant effort to upgrade for long-term use or sale.
2. Foreign Ownership and Title Deeds
Foreigners are restricted from owning land directly in Thailand, but they can legally own condominium units. Foreign ownership is regulated under the Condominium Act, which limits foreign ownership to 49% of the total floor area of the building. For foreigners purchasing a condominium, the title deed is known as a Condominium Title (Or Chor 2), which outlines ownership of the unit and the corresponding proportion of common areas.
- Proof of Foreign Ownership: Foreign buyers must transfer funds from abroad, which are verified by the Foreign Exchange Transaction Form (FET). This form is essential for registering the foreign ownership with the Land Department.
Foreigners looking to control land can explore options such as:
- Leasing land for up to 30 years, with possible extensions.
- Establishing a Thai majority-owned company, which holds the land.
3. Verification and Transfer of Title Deeds
Before purchasing any land or condominium, it is crucial to conduct a title deed search at the Land Department. This process involves verifying that the title is legitimate, free of encumbrances (such as mortgages or liens), and accurately reflects the property’s legal boundaries.
a) Title Deed Search
A title search helps identify the legal owner of the land and whether the land is subject to any encumbrances. Buyers can obtain a copy of the title deed from the Land Department and should check for any outstanding debts or claims against the property.
b) Surveying and Boundary Verification
For land purchases, especially those with Nor Sor 3 or Nor Sor 3 Gor titles, it is advisable to conduct a new land survey to avoid disputes over boundaries with neighboring properties. Title deeds that lack precise GPS surveys may lead to boundary disputes in the future.
c) Transfer of Ownership
Once verified, the sale and transfer of property must take place at the Land Department. Both parties, or their representatives with proper power of attorney, must be present for the transfer process. A transfer fee, typically 2% of the appraised value, is payable at the time of transfer.
4. Encumbrances and Legal Risks
When dealing with title deeds in Thailand, buyers must be aware of potential risks, including fraudulent deeds, undisclosed encumbrances, and disputed land boundaries. Legal due diligence, including a comprehensive title search and a new land survey, can help mitigate these risks. Additionally, buyers must check for the following:
a) Mortgages and Liens
Mortgages and other liens must be clearly registered on the title deed. These financial obligations must be cleared by the seller before the property can be transferred to the buyer.
b) Servitudes and Easements
Some land may have servitudes or easements, giving third parties rights to use part of the land for specific purposes, such as access roads. These rights are typically recorded on the back of the title deed and can affect the usability of the land.
c) Zoning Restrictions
Certain lands are subject to zoning restrictions or government regulations that limit development. For instance, coastal land or areas near national parks may have restrictions that prohibit certain types of construction or commercial use.
Conclusion
Understanding the intricacies of title deeds in Thailand is critical for both foreign and local buyers. The Chanote title provides the highest level of security and ownership, while other titles like Nor Sor 3 and Nor Sor 3 Gor offer varying degrees of rights and should be approached with caution. Buyers, especially foreigners, should conduct a comprehensive title search, ensure the land is free of encumbrances, and verify that all legal requirements, such as foreign exchange laws, are met before finalizing a property transaction in Thailand.
