Foreigner’s Right to Value of Land in Thailand

| December 2, 2016 | Land, Property

An important principle of Thai law regarding foreign investment in land is that where the foreigner has purchased land, but is not able to legally register ownership of the land, he or she is entitled to the monetary value of the land. This principle is demonstrated in the following Land Department Advisory Opinion:

  • During litigation involving the sale and purchase of land between a foreign plaintiff and Thai defendant, the Court ruled in favor of the foreigner and ordered that the land be legally registered in the name of the foreign plaintiff’s Thai wife. The Court ruled that if the registration of ownership could not be legally effected, then the value of the land in the amount of 1,350,000 baht shall be returned to the plaintiff by the defendant.
  • The Thai spouse of the foreign plaintiff submitted an application to register the land at the Land Office and declared that the entire amount of funds used to purchase the land was the property of the foreign spouse.
  • The Land Department issued the following opinion: The applicant is a Thai national married to a foreign spouse and has made a statement that the money used to purchase the land is the separate property of the foreign spouse. Therefore, if the applicant were to be allowed to register ownership of the land, it would be an act of owning land as the agent of a foreigner. Therefore, the Land Officer cannot proceed with the registration of ownership in the name of the Thai spouse. However, the Land Department pointed out that the court order provides a solution in that the 1,350,000 baht shall be paid to the foreigner as compensation.

While most cases involving foreigners purchasing land through their Thai spouses involves criminal penalties due to unlawful acquisition of land. The case discussed above demonstrates that the act of a foreign purchasing land is not necessarily unlawful in and of itself. A foreigner who enters into a contract to purchase land has rights that are legally enforceable in Court and the contract itself is not void. What is unlawful however is the actual act of using a Thai person to act as an agent in order to register ownership of land in the title deed.

Real estate investment by foreigners in Thailand is a complex legal subject and it can often involve laws that carry criminal penalties. Therefore, it is advised that foreigners interested in investing in real estate, especially if they will do so with a Thai spouse, consult competent legal counsel before proceeding.

 

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Category: Land, Property

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