Registering ownership of your house

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When a foreigner buys a house on a plot of land in Thailand the house and land are often registered as separate transactions.

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Why is this?

Because under Thai law a house can be owned by a foreigner and under most situations the land can't. So the house is put in the name of the foreigner using a procedure we'll talk about in later columns. Then a 30-year lease to the foreigner is registered on the title deed.

Can this procedure be done everywhere in Thailand ? In theory yes, but it is at the government officials' discretion. Therefore before you do this you have to check with your lawyer and make sure it's possible where you're buying the house. If you can't do this where you're buying you can always just register a lease on both the land and house.

So what's the advantage of having ownership of the house in a foreigner's name?

It's the difference between a lease and ownership.

If you just rent a house for 30 years, ownership reverts to the landlord after that period. But if you own the house, you continue on as owner, even if the land on which it sits reverts back to the landlord.

So why is this such a big advantage? Remember how many leases are structured in Thailand, particularly in developments where foreigners buy.

The foreigner signs three leases with the landlord _ one for the first 30 years, a second lease for the second 30 years and a third for the third 30 years. As we've discussed earlier, only the first lease may be registered at first because of the 30 year limit.

Please note that in some areas the land office will allow the filed 30-year lease to include a provision that the lessor agrees that when the first lease expires he or she must enter into another lease for 30 years with the tenant. This promise is enforceable under the law but must be acted upon by the tenant before the end of the first lease term. It's also important to remember that not all land offices will allow such a provision.

So if you get to the end of the first 30 years and the lease expires, what if the landlord or his heirs won't cooperate to register the second one? Well, if the landlord or her heirs own both land and house when the lease runs out, they have a real incentive not to cooperate in registering the second lease, because the land and house together may be valuable.

But if you own the house, you have the right and obligation to demolish or move it before the lease expires. And if the lease is only for a small plot of land, without the house it isn't worth much. The landlord or her heirs will be best off just entering into the next 30-year lease with you for the land.

So, in short, registering the house in the name of the foreign purchaser is a tool to help ensure that the foreigner keeps his or her home in Thailand beyond just the first 30-year lease.

Registering ownership of your house



A number of readers have asked us to explain the mechanism for a foreigner to register title to a house in Thailand in his or her name.

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Remember, a foreigner may register title to a house in Thailand. Because of the Thai land laws, a foreigner normally can't put the land on which the house sits in his or her name.

The foreigner can have title to the house put in his or her name and a 30-year land lease to the foreigner is later registered on the title deed to the land.

As we explained last week, if the house is in the name of the foreigner, the foreigner has the right and obligation to move or destroy it before the end of the lease. Since it's unlikely that the plot of land under the house is worth much without the house, it's likely that the landlord or the landlord's heirs will renew the lease, because the landlord will at least receive the rent for the new 30-year term. Of course, if the landlord forces the tenant to destroy the house, it is unlikely that the landlord will receive any payment at all.

But what's the procedure to put the house in the foreigner's name? Well, the basic way to do this is called the 30 day notice under Ministerial Regulation No7 (AD 1954) issued under the Land Code of the same year. Under this regulation, when the building's purchase will be conducted without the transfer of ownership of the land on which the building is constructed, the buyer and seller have to post notices at:

- The district office;

- the village chief's house, if there is one in the area;

- the location of the land; and

- the municipality office.

The notices must be posted more than 30 days before the transfer. The idea is that this gives notice to any other interested person who may have a claim on the house.

If there is some objection from the public, a land officer may attempt to get the parties to agree through compromise. If the parties can't reach an agreement, they can file a lawsuit.

If there is no objection to the 30-day notice, the land office will record the registration of the house along with the contract of sale of the house. Though there is no title deed for this, these recorded documents are official proof of ownership.

There's another way that title to a house may be placed in a foreigner's name. If the buyer is a foreigner and the house is not yet built, the building permit can be put in the foreigner's name. Then the application for the blue book is put in the foreigner's name, too.

Having a blue book, by the way, means only that the address is registered with the local authorities and is not evidence of ownership by anybody.

But we'll talk about this in a later column.

If both the building permit and the application for the blue book (tor ror 900) are in the foreigner's name, some land offices accept this as ownership of title to the house. To get the documentation from the land office that the title to the house is in the name of the foreigner, the 30 day notice mentioned above must also be given.

With either of the above registration procedures, after the registration of the house, the registration of the lease on the land takes place separately and is recorded on the title deed to the land.
 
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