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Property Title Transfer in Thailand is a crucial step for investors, both local and foreign. It is a complex process that must be conducted properly to ensure compliance with Thai rules and regulations.
A lawyer familiar with Thai property law should be enlisted to conduct title due diligence, verify ownership, and facilitate the transaction. This step is crucial for legal, financial, and practical reasons.
When buying property in Thailand, it’s essential to verify that the seller is the legal owner of the land. This can be done by checking the title deed (also known as chanote) which is registered with the Land Department. Failure to do so can lead to a number of complications, including property fraud and future issues with selling the property.
There are different types of land titles in Thailand, each with varying levels of ownership rights. The most secure type of title is the Chanote, which provides incontrovertible proof of ownership and identifies the person or entity who owns the land. This title also includes a survey of the land’s boundaries, which are marked by concrete survey pegs and correlated to a national survey grid.
Other types of titles include the Sor Kor 1, which demonstrates possession but does not confer full ownership. This title can be upgraded to a Nor Sor 3 Gor or Nor Sor 3 Chanote through the Land Department, but it cannot be used for mortgages or the registration of usufructs or leases.
The Sor Kor 2, on the other hand, grants a right to use a specific plot of land but does not allow for full ownership. This title can be upgraded to Nor Sor 3 Gor or Nor Sor Chanote, but it cannot be used for mortgages, nor can it be sold or transferred.
The least favored title document, Sor Kor 1 or SK1 documents, merely establishes a claim by the occupant that they have occupied the land. It only confers minimal associated rights and only allows the holder to use the land for specific purposes such as agriculture. It does not allow the holder to register any legal acts or transfer their rights. These titles can only be transferred through inheritance.
These rudimentary deeds do not include any detailed map of the plot and can be easily disputed due to inconsistencies in the measurement of the land’s boundaries. Consequently, they cannot be sold or mortgaged and their holders often find themselves in disputes with neighboring land owners over the size of their plots.
Until recently, there were no title deeds available in the north and northeast of Thailand where Sor Kor 1 titles predominate. However, the government has started to address this issue and now title deeds are becoming more common in these regions.
The most favored of Thailand’s land title documents is the Chanote (which literally translates as ‘Title Deed’). These are registered with the Land Department and state the ownership, boundaries, area measurements and encumbrances in precise detail. They can be sold, leased and even mortgaged. They are also the only land title deeds that can be used to build a condominium.
The holder of this title has the right to occupy and use the land for a limited period. It can be transferred through inheritance but is not a full legal land title deed that can be sold or mortgaged.
These types of documents are best for long-term occupiers trying to legalize their rights. They are low on property rights and are not recommended for anyone looking to invest in Thailand real estate. Often the document is not accurately surveyed and can lead to boundary disputes when it comes time to sell or upgrade to another type of land title.
This title is similar to a Nor Sor but it has been surveyed by the government and has defined boundaries. It is possible to build a house on this type of title but the holder does not have full ownership rights and cannot be transferred or sold.
These titles are the highest form of land documentation in Thailand but still do not guarantee the holder full rights. They are issued after the occupant has been legally recognized as owner through land office registration. They can be sold or leased and can also be mortgaged. These documents are stamped with a red garuda and are the most valuable type of land title in Thailand.
This title is essentially the lowest level of possessory right document. It confirms a person’s rights to use the land but does not include full ownership rights, which can be obtained after occupying the land for 10 years. However, the holder of a Nor Sor 3 Gor can apply to upgrade it to a Chanote (or any other type of full title deed) once it is over 10 years old.
A Nor Sor Sam with the extension Gor or Khor has the same legal basis as a Nor Sor 3 but benefits from defined land boundaries which are accurately surveyed relative to neighbouring plots and the land area parcel points are set by aerial survey. It can be sold, transferred, leased, usufructed and mortgaged. Moreover, it can be easily subdivided into smaller plots. It does not require the publication of legal acts or 30-day notification to neighbors and can be changed to a Chanote (or any other full title deed) through a process with the district land office.
Foreigners are permitted to purchase condominium units under a freehold title deed and enjoy the same property rights as locals. The individual units are owned by individuals while the common areas and facilities are managed by a juristic entity. This is a popular option for those who are not looking to own a full plot of land.
