Title Deeds in Thailand. A title deed is a crucial legal document in Thailand that certifies ownership or usage rights over land or property. The type of title deed determines the level of legal protection and ownership rights associated with the property. Understanding these distinctions is critical for both Thai nationals and foreigners purchasing land, condominiums, or other real estate in Thailand.

1. Types of Title Deeds in Thailand

There are several types of title deeds in Thailand, each granting different levels of rights over the land:

a) Chanote (Nor Sor 4 Jor)

The Chanote, also known as the Nor Sor 4 Jor, is the most secure and precise title deed in Thailand. It is the only title deed that provides full ownership rights, backed by a detailed land survey using GPS technology. The boundaries of the land are clearly defined and measured, making it the most reliable title for property transactions.

• Rights Granted: Full ownership, transferable, and can be used as collateral for loans.
• Use Case: Best for high-value investments, foreign ownership of condominiums, or property development.

b) Nor Sor 3 Gor

This title deed provides possessory rights and offers a moderate level of security. It has undergone some level of survey but is not as precise as the Chanote. Nor Sor 3 Gor title holders can sell, transfer, or mortgage the property, and they can upgrade it to a Chanote by undergoing additional land surveying.

• Rights Granted: Transferable and mortgageable.
• Use Case: Suitable for mid-level investments or ownership in rural areas with the potential for future development.

c) Nor Sor 3

A Nor Sor 3 title grants possessory rights, but the land boundaries have not been fully surveyed and measured. This title can also be upgraded to a Nor Sor 3 Gor or Chanote if boundaries are established. However, it carries less security than the previous two types.

• Rights Granted: Limited possessory rights; cannot be used as collateral in most cases.
• Use Case: Common in undeveloped or agricultural areas; requires further legal steps for more secure ownership.

d) Sor Kor 1

This is the least secure of all the title deeds, representing a form of land use certification rather than outright ownership. Sor Kor 1 is essentially a land claim, where the holder has the right to occupy and use the land, but without the right to transfer, sell, or mortgage it.

• Rights Granted: Possessory rights only.
• Use Case: Typically found in rural and agricultural areas, suitable for small farmers or those holding long-term family land.

2. Key Considerations for Foreign Buyers

a) Foreign Ownership of Land

Under Thai law, foreigners are prohibited from owning land outright, but they can own condominiums under certain conditions, such as 49% foreign ownership within a building. For land purchases, foreigners must either enter into a long-term lease agreement (up to 30 years, with potential extensions) or establish a Thai-majority-owned company that can hold the land.

b) Land Title Verification

It is critical to verify the land title before making a property purchase in Thailand. A title search at the Land Department ensures that the land is free of any encumbrances, disputes, or ownership issues. Buyers should also confirm whether the property is correctly surveyed and the boundaries are well-defined.

3. Steps for Transferring Title Deeds

Once the buyer and seller agree on the terms of the property sale, the title deed transfer process is carried out at the Land Department:

1. Contract Signing: Both parties sign a sale and purchase agreement, outlining the price, terms, and conditions.
2. Tax and Fee Payments: Transfer fees, typically 2% of the government-assessed value of the property, and taxes, such as specific business tax or stamp duty, must be paid at the time of transfer.
3. Land Department Registration: The title deed is officially transferred at the Land Department in the presence of both parties. The new owner’s name is recorded on the title deed, and the transfer becomes legally binding.

4. Title Deeds and Mortgages

For those financing a property purchase in Thailand, title deeds play an important role in securing loans. Only certain types of title deeds, such as Chanote and Nor Sor 3 Gor, are eligible to be used as collateral for mortgages. The bank will place a lien on the property until the mortgage is fully repaid.

5. Common Issues and Disputes with Title Deeds

Disputes over land ownership in Thailand can arise due to unclear boundaries, unregistered property rights, or conflicting claims. It is not uncommon in rural areas, where land has been inherited or passed down through generations without proper documentation. To avoid legal complications, it is recommended to conduct due diligence, including hiring a lawyer and conducting thorough land title searches.

Conclusion

Understanding the different types of title deeds in Thailand is essential for both Thai nationals and foreigners engaging in property transactions. The Chanote title provides the highest level of security and is ideal for valuable properties, while titles like Nor Sor 3 and Nor Sor 3 Gor offer varying degrees of rights and potential risks. Conducting a proper title search and verifying the land status through the Land Department are critical steps to ensure a legally sound transaction.