Encumbered Property

Encumbered Property presents a challenge. When you buy a condo in Thailand you have to ensure that you are buying property or real estate that is not encumbered. This can be with a mortgage bond. Also, the property may have been attached for debt in a court case. 

Encumbered Property

There can also be a usufruct registered over the property or land may have a servitude registered over the property. These need to be investigated before you transfer money into Thailand and should be included in the property due diligence search.

Mortgage Bonds

If you are buying secondhand property, then there might be a mortgage bond registered over the property. The Bank would not also get involved and the transfer becomes a bit more complicated. There is now a buyer, seller, and also the bank. The transfer at the Land Department now has to be coordinated with all three parties.

There may also be an attachment over the property for other debt. Then again this needs to be well-coordinated as the attachment will not be lifted unless they get paid after the transfer of the property. You will need to speak to a property lawyer about this.

Usufruct

There may be a usufruct registered over the property. This can be a problem as the usufruct remains even when sold. The usufruct most times is to use the property and many times this occurs during a divorce agreement where one party is allowed to stay in the house.  It would be difficult to sell a house or condo with a usufruct registered over it. This as the occupants still hold all their rights as before the sale of the property.

Your property lawyer in Thailand would have to get a copy of the usufruct and contact the holder of the usufruct to negotiate an end to its existence if the owner has not. Normally this is done by the owner of the property.

Servitude

Servitudes are mainly going to be an issue if you are buying a house or land. The servitude is another right that is registered over the property. This could be a servitude with EGAT the Thai electricity generator who may have a servitude over the property for a high voltage power line or maybe your neighbor might have one as he needs to cross your property to get to the main road on the other side as there is no other way around your property.

These are the three main issues with property in Thailand. Firstly where the property is encumbered with one of these property liens. Take proper legal advice from your attorney in Thailand. Always allow the law firm in Thailand to search the property with a due diligence. When buying a property in Thailand then you have to consider the type of title deeds. Such as a Chanote as well as the property transfer fees in the country.

The information contained on our website is for general information purposes only and does not constitute legal advice. For further information, please contact us.

Encumbered Property FAQ

WHAT IS A LAND TITLE SEARCH THAILAND?

The land title search in Thailand is part of a due diligence check on your property. You want to ensure that the title deed is correct and that the seller is the holder of the title deed. This is what the title search is about.

WHAT IS A CHANOTE LAND TITLE THAILAND?

The Chanote title deed in Thailand is a freehold title deed certificate for ownership and which has the same characteristics as what you would have in your home country. These are the title deeds which foreigners are advised to buy after a due diligence report.

CAN FOREIGNERS LEASE LAND IN THAILAND?

Yes foreigners can lease land in Thailand with a leasehold agreement. Most would opt for a usufruct over a property rather than a leasehold agreement. Note that it is illegal in Thailand for a foreigner to be a farmer as it is a prohibited profession.

WHAT IS THE LAND TRANSFER PROCESS IN THAILAND?

The land transfer process normally starts with checking the property for a usufruct or servitude and other encumberments. Then there is signing of the sale agreement and transfer of funds from abroad. The property transfer is then complete when you get the Chanote. Foreigners generally cant own land in Thailand.

WHAT IS A SERVITUDE?

The servitude is another property right which is registered over the property.This is not uncommon in Thailand where as an example a high voltage wire is run over your property. These servitudes affect mainly land and not condominium units.