Investing in legal services pertaining to property purchases, lease or rents in Thailand is a good proposition. These services help a buyer or lessee become more secure with the property he is purchasing or securing through a lease.
These services may entail additional expenditure but practical, and may even prove to be more economical approaches in property acquisition.
One of the most basic things to do when acquiring a property is conducting due diligence. Through this process, the potential buyer knows more about the property and the developer if it is a development, its financial ability to finish the project or its reputation among the real estate sector. These can be done through three processes:
- Physical Inspection – this will help establish accessibility of the property and if the property actually adheres to the applicable zoning ordinance of the area.
- Permit Inspection – any development requires the developer to secure necessary permits such as to permit to construct or the Initial Environmental Examination (IEE). A check on these provides the buyer with a view of how the developer adheres to the laws.
- Developer or Seller Credential Review – the decision to purchase a property should not be solely based on glossy publications and word of mouth of property agents. Due diligence can involve examination of court documents which may reveal cases involving the seller or developer or if it has no capacity to finish the project at all.
A title search shall reveal the true type of title the property has. Any potential buyer must be reminded that there are properties in Thailand, with a certain type of deed, may not be sold to anyone.
Thailand has four types of title deeds that a buyer should have knowledge of:
- Chanote or the Nor Sor 4 – it is known in the other countries as the “freehold” title deed. A land with a Chanote title deed means it has been fully surveyed with boundaries well established thus it can be transferred, mortgaged or sold.
- Nor Sor Gor 3 – the difference between a Nor Sor Gor 3 and the Chanote is that a freehold title deed while the Nor Sor Gor 3 only has a certificate of use. Nonetheless, it can still be purchased, mortgaged or transferred provided that it is ripe to be converted to a Chanote.
- Nor Sor 3 – here, the title is already established yet the boundaries are not yet fully determined.
- Sor Kor 1, Por Tor Bor 5, and Bai Jong – these are claim certificates for properties and these cannot be sold or even leased.
This is a crucial process in acquiring a property in Thailand is a contract is what binds two or more parties as it contains their benefits and obligations on one another.
The sales contract details the basic items such as how much the property costs, its terms of payment, other terms and conditions as well as who pays for the applicable taxes.
After all, safeguards have been done, the method of payment and the assignment in paying the applicable taxes has been adequately settled, the final process in securing a property is through a Title Transfer.
Upon closing the deal, the transfer of title should be registered at the applicable Thai government agency.
A title transfer also requires parties to settle the following duties:
- Transfer Taxes
- Withholding Tax
- Special Business Tax
- Stamp Duty
Foreigners Buying Properties in Thailand
Generally speaking, a foreigner is not allowed to own land in Thailand. With this, many of them settle with long term leases in order to secure the property for a great deal of time. Some others opted to lease the land and buy the structure securely built on such land.
Legal Property Services
There are numerous law firms in Thailand with a reputable reputation in conducting real estate reviews and the like. Potential buyers or lessees should not view these legal consult and guidance to be additional costs on securing the property.