A Thai Title Deed Search is Crucial Due Diligence
When buying property in Thailand, it is vital to perform a Title Deed Search. This title deed search will conclude if a property has any outstanding liens; if the seller has ownership rights and determine the type of property documentation.
What are the Thai land title deeds? What ownership rights do they confer?
There are broadly four types of Land Title Deeds in Thailand commonly used as evidence of land ownership, possession rights, and other interests in land.
Chanote (Title Deed)
A Chanote is a certificate for ownership of land. A person with their name shown on the deed has the legal right to the property and can use it as evidence to confirm the right to government authorities.
A Chanote title deed shows the official government land survey points using the very accurate GPS survey method to set the area and boundaries of the land. It is the long-term goal of the Land Department to cover all available property in Thailand under the Chanote title system. The Chanote is the most secure type of land title and comes with the highest recommendation for property buyers.
Nor Sor 3 Kor (also pronounced Nor Sor Sarm Kor) Confirmed Certificate of Use
This certifies that the person named on the corticated has the confirmed right to use the land implying that all requirements to issue the title deed have been met and that the issue of the title deed is pending. Land with a Nor Sor 3 Kor title deed may be sold, leased, used as mortgage collateral and so on. The holder of this certificate cannot leave the land unattended for more than 12 years.
The Chanote and Nor Sor 3 Kor are the only titles over which registerable right of ownership or lease can exist and are as such the only ones that a prudent foreigner should consider.
Nor Sor Sarm (Certificate of Use)
Similar to the above this is a Confirmed Certificate of Use except that not all of the formalities to certify the right to use have been performed. Before a transfer can be made, a notice of intent must be posted, and then 30 days public notice is necessary before any change of status over the land can be registered.
Sor Kor Nung (Certificate of Possession)
This recognizes that a person is in possession of the land, but the Certificate does not imply that there are any rights associated with the ownership. It is not transferable, but a person in possession may transfer physical ownership, and the new possessor may apply for an original Certificate of Possession. Not recommended for foreigners buying property, as you will have no rights to the property even if you pay for the certificate.
You should always ask your lawyer to check the front and back of the property title deed. A faithful translation of this will show you who the current owner is; if the property has any endorsements or liens; the shape, area, and orientation of the property and border to public property (such as a road, stream or the ocean). If the lawyer’s report is negative and there are problems with the deed certificate, you should not continue with the purchase.
What is a Tor Thor Sarm (3)
When you transfer money into Thailand to buy property you should instruct the bank here to issue a Foreign Currency Exchange Transaction Certificate (or Tor. Thor. 3 as it is commonly called) to show that you are importing funds to buy a condo, or as partial capital investment, or as a partial loan to establish a company to acquire land, or land and house.
A Tor Thor Sarm (3) is an official bank document issued by the receiving bank upon the receipt of foreign currency into your bank account in Thailand. You must request a Tor Thor Sarm from your bank when you are remitting funds to Thailand for the purpose of purchasing a condominium, and the Tor Thor Sarm must specify that the remittance is to be used solely for purchasing a property under Code 5.22.
Funds for setting up a corporation to acquire/buy property will be normally split into equity (registered capital) injection and debt arrangement (shareholder’s loan). This certificate will enable you to smoothly repatriate the brought in money out of Thailand in the future.
Things to keep in mind about Thai Land Title Deeds:
- The buyer is responsible for all liabilities once the title has been transferred to her name.
- A Thai Title Deed Search is the minimum due diligence you should perform if you wish to avoid legal problems later.
- Most people would never think of buying a house or condo in their own country without legal advice. Some, however, have done precisely this in a foreign country like Thailand and experienced problems. Mostly because in Thailand all laws and official documents are in the Thai language and people simply trusted what others told them. Better invest the extra time and money at the beginning when buying a property in Thailand to avoid an unpleasant awakening later. You would not be the first one.
