Legal Advice in Purchasing a Property in Thailand
by Anthony Justice
Buying property in Thailand can be an exciting investment, but it also involves important legal points to consider to protect your interests. Whether you’re a foreigner or a local buyer, conducting due diligence helps ensure a safe, transparent, and legally sound transaction. Property due diligence is a thorough process to confirm all legal, financial, and factual aspects of a property before purchase. It is advisable to begin the thorough, detailed due diligence before signing a binding contract. Here are the key points to consider in purchasing a property:
1. Title Deed The first thing to do is check the title deed. Make sure there are no registered liens or obligations on it. If there is a registered lien, like a mortgage with a bank, you can still purchase the house. You just need to make sure that the mortgage is removed at the same time the house is transferred to you.
2. Right-of-Way This is very important—you must be able to legally access the property. In some cases, you may find that a part of your land is being used by others. One common example is when your land inevitably becomes the only pathway or walkway of entrance and exit for your neighbors. You must ensure there’s legal access to get to the house. Normally, this would be through a public road or a private road with a servitude (legal right of access) registered against it.
3. Construction Permit Check if the house is legally built with a properly registered construction permit. Commencing any construction work without the proper permit is illegal. It must be built in accordance with the construction permit.
4. Housing Project vs. Stand-Alone Group Determine whether the property is a part of a registered housing project or just a group of stand-alone houses. A housing project has rules and regulations listed at the Land Office and a juristic person to manage it. If bills aren’t paid, sanctions can be imposed. A stand-alone group is simply a group of people who agree to pay shared costs. If one person doesn’t pay, the system can break down because there’s no legal enforcement. Therefore, it’s usually best to buy a property within a registered housing project.
5. Local Area Tax There’s a building tax that City Hall can claim retroactively for up to 10 years. This tax is against the building, not the owner. So even if you bought the house only 6 months ago, you could still be liable for unpaid tax from 10 years ago. It would be best to visit the City Hall to confirm that this tax has been paid.
6. Court Cases Check with the local courts to ensure there are no pending legal cases or disputes involving the property.
7. Sales Contract Check the contract terms for fairness and make sure that there are no hidden costs or obligations. Allow a Thai lawyer to thoroughly review the contract details. A lawyer will help to ensure that the sales contract is legally binding, transparent, and do not contain unfavorable terms that could put you at a disadvantage.
If you follow these steps and everything checks out, then you’ve likely found a good property to purchase. Failure to conduct the necessary safeguard usually results in terrible consequences, such as serious financial and legal distress on the part of the buyer. This is why buyers must remember that almost always, after completing the transfer, the seller will not hold responsibility for problems the buyer did not discover.Doing your due diligence before buying property in Thailand isn’t just a smart move—it’s essential. From verifying land titles to checking for hidden liabilities, these steps can save you from costly mistakes and legal trouble later on. Our legal team at Magna Carta Law Firm specializes in Thai property due diligence. We can help to check and confirm that the property is clean, the title is valid, and your rights are protected.
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