Siam Legal | What You Need to Know Before Buying Property in Bangkok

Bangkok’s real estate market offers a strong investment return with its high rental demand, rising property values, and location as a tourist hotspot.

However, Thailand’s property laws differ from those in other countries, and making a small mistake could put your investment at risk. From foreign ownership restrictions to contract loopholes, there are many legal details that could cause problems if handled improperly during the property-buying process. 

In this article, we will cover the importance of hiring a property lawyer, the legal restrictions on foreign ownership, and the key legal steps involved in buying property in Thailand, specifically in Bangkok.

Why You Need a Property Lawyer in Bangkok

To protect your interests, you must seek the services of a property lawyer in Bangkok, particularly in the location where you wish to buy property. These lawyers will have a deeper understanding of the market area and will help clear any confusion you may have related to Thailand’s laws and regulations. They will also ensure that the purchase is secure and compliant as they review contracts, verify title deeds, and personally oversee the transfer of ownership at the Land Department.

By partnering with a lawyer when buying property in Bangkok, you will not only minimize your risk of falling victim to fraudulent sellers and becoming responsible for hidden liabilities, but you will also benefit from expert guidance that helps you make informed decisions about safeguarding your investments.

Key Legal Steps in Property Transactions

The property-buying process in Thailand is complex and involves several steps, all of which your property lawyer will guide you through. However, their expertise is especially valuable in the following key legal stages:

• Legal Due Diligence: The property lawyer will conduct thorough due diligence, including a title search to verify the property’s ownership history and confirm that there are no outstanding debts or mortgages. This eliminates the risk of buying a property with hidden liabilities.
  
• Contract Review and Amendments: The property lawyer will perform a contract review of your Sales and Purchase Agreement and make any necessary amendments to clarify the payment conditions, handover dates, and special clauses. This ensures that the contract is fair and that your interests are secure. 
• Oversee Transfer of Ownership Process: The property lawyer will handle all the necessary paperwork to complete the transfer of ownership at the Land Department, as well as assist in the transfer of funds and ensure that the title deed is properly registered in your name to avoid future issues.

In addition to the list above, some property lawyers will also provide escrow services to securely hold your funds until all conditions of the sale are met. This reduces risks and promotes a safe transaction between both parties. 

Foreign Ownership Laws in Thailand

According to the law in Thailand, foreigners are not allowed to buy and own land under their name. You can jointly own land, but you would have to start a Thai company or marry a Thai citizen first. Fortunately, there are better alternatives.

Though you are not allowed to own land under your name, you can still buy property in Thailand. Depending on the type of property you choose to buy in Bangkok, you will have to adhere to different sets of laws:

• Condominium Units in Thailand: You can buy a condominium unit with freehold status outright or sign into a leasehold. However, foreign ownership in a condominium building is limited to 49%, with the remaining 51% reserved for Thai nationals. While it is not possible to own an entire building, you may still buy multiple individual units across the country, provided that the regulations are followed.
  
• Long-Term Leaseholds in Thailand: You can sign into a 30-year lease agreement with a Thai landlord or developer, which will also give you access to a wider range of real estate options to choose from, including villas, houses, and land. The 30-year lease agreement is the closest arrangement to gaining de facto control over a property and can be renewed twice for a total lease period of 90 years.

It is recommended to have a property lawyer by your side to help you navigate the nuances of these laws when buying property in Bangkok, as even minor misunderstandings or overlooked legal details could lead to disputes or complications in securing long-term ownership rights.

Title Deeds and Contracts

Title deed fraud is one of Thailand’s most common real estate scams. It is often targeted at foreigners, particularly those buying property in tourist hotspots like Bangkok, and can lead to significant losses in investment. The scam involves an illegal transfer of ownership or title of a property to the buyer without the knowledge or consent of the legal property owners.

To avoid becoming a victim of this kind of fraud, have a property lawyer confirm the legitimacy of the deed and that the property is suitable for purchase.

Thailand has several types of title deeds, with each offering different ownership rights. Below are three of the most common types:

• Chanote (Nor Sor 4 Jor): Also known as freehold ownership, this is the most secure type of land title deed, as it provides full ownership rights to the property.
• Nor Sor 3 Gor: This is a recognized land title deed with mapped boundaries that can be upgraded to a Chanote through filing a petition to the Land Department.
  
• Nor Sor 3: This is a weaker land title deed than Nor Sor 3 Gor and has no mapped boundaries but can be upgraded to Nor Sor 3 Gor and then to a Chanote through an application at the local land office.  

Alongside confirming that the property has a legitimate title deed free from legal disputes, it is important that you have a property lawyer review all contracts before signing them, including the Sales and Purchase Agreement. This will ensure that they contain fair terms and that you know exactly what you are getting into. Oftentimes, contracts drafted by sellers or developers are heavily biased in their favor, so a legal review is necessary to protect both your rights as a buyer and your investment.

Professional Assistance For Property Buyers in Bangkok

If you’re planning to buy property in Bangkok, reach out to Siam Legal International for professional guidance that helps you make informed decisions about your property purchases. With over 20 years of experience, our team of bilingual property lawyers has the knowledge and expertise to safeguard your investments and ensure a smooth transaction free from legal complications and fraud.

We will be by your side throughout the entire property-buying process, from conducting thorough due diligence on your selected property to reviewing every contract detail to finalizing the purchase at the Land Department. This will help you avoid issues with the government and fraudulent sellers. For added security, Siam Legal also provides escrow services during the transaction.

For a seamless and secure entry into the real estate market in Bangkok, do not hesitate to contact Siam Legal to book a consultation!

Category: Blog