Foreigners buy real estate in Thailand

Foreigners can purchase real estate in Thailand, but they must adhere to certain regulations. Direct land acquisition is restricted, but foreigners can legally own condominiums and invest in real estate through leases or corporate structures. However, recent real estate controversies, such as the Phetchaburi Park housing project and the Peaks Resilience Kata Noi Phuket legal disputes, highlight the importance of thoroughly understanding local laws and potential risks. Expert advice is therefore essential for a smooth and secure property purchase in Thailand.

Phetchaburi Park residential project

The president of the "Stop Global Warming" association, Srisuwan Janya, and two foreigners filed a complaint with the Special Investigation Bureau seeking damages in connection with this allegedly fraudulent housing project. The foreigners, Russian Rusan Ataev and Briton Marcos Hurst, are among approximately 100 foreigners who purchased illegal land titles outright from the developer. These land titles were Nor-Sor-3 documents advertised on websites targeting foreign buyers.

Approximately 99% of the plots were located within the protected area of ​​the Payang Hak-Khao Pum National Forest Reserve, which had been designated as such prior to the issuance of the title deeds. Officials from the Phetchaburi 10th Forestry Department investigated the housing project on July 17th of last year and reported the violation to the Director-General of the Royal Forestry Administration. The land deeds were subsequently revoked, according to a spokesperson. Local officials confirmed the fraud and annulled the title deeds. The claimed damages amounted to two billion baht.

British plaintiff Hurst stated that after paying the full amount of three million baht, he learned that foreigners like himself could not purchase land in Thailand. The property development company was insolvent, and Hurst received no refund.

The resilience of the peaks: Kata Noi Phuket

On December 21 of last year, the Supreme Administrative Court ordered the demolition of the Peak Residences complex in Kata Noi, Phuket, due to the unlawful occupation of state property. The owners were given 90 days to vacate the premises. The court determined that the land deed they presented (Nor Sor 3 Kor) had been unlawfully issued by the municipality of Karon, which was the defendant in a separate case. The project could have been worth 30 billion baht. The owners deposited 3 billion baht with the Special Investigation Bureau in case the building permit was found to be unlawful. This case, along with the other legal violations, has not yet been heard.

Attacks on state land

A similar case of illegal land occupation, lasting twelve years, resulted in a ten-year prison sentence for Anek Lipracha, who had unlawfully taken possession of 93 rai of Khao Ruak Khao Muang Park in Phuket, located within Srinath Park, a national forest. The illegal occupation caused the state approximately 800 million baht in damages through the use of falsified documents. However, the court reduced his sentence to one-third due to his cooperation.

Previous cases of land occupation by four Thai nationals in June 2016 resulted in prison sentences of eight to 14 years for using illegal title deeds to occupy protected state land in Phuket. The illegal occupation caused an estimated 15 billion baht in damages to the public.

The importance of due diligence and as a preventive measure

Careful research primarily means gathering comprehensive and thorough information about what you intend to do or buy. The situation in Thailand differs from that in other countries, as it is generally not possible for them to acquire real estate within the Kingdom. Thai law makes purchasing property difficult for them. The reason for this is that they are not permitted to own land.

Thorough due diligence is a sensible security measure that foreigners in particular should undertake before any purchase or investment. It simply requires common sense to gather comprehensive information about all details, the background of a property or investment, the relevant documents, and the developer or seller before entering into formal negotiations. This involves not only a visual inspection of the property but also a thorough examination. This process includes the following steps, which protect the buyer or investor:

  • Physical inspection. The accessibility of the property or investment in terms of amenities such as public transportation, offices, and other areas important to the buyer or investor. He or she should also check the property boundaries, the names of previous owners, and zoning regulations.
  • Document review. The buyer should verify that the developer possesses the necessary and legally valid building permit, the initial environmental impact assessment, and all other relevant documents. These documents must be consistent and validly issued. The buyer should also be informed of the minimum number of parking spaces on the property. Only a careful review of the documents will provide this information.
  • Information about the seller or project developer. The due diligence process will reveal whether the property is likely to be handed over to the buyer or investor at the agreed time.

    • The previously discussed violations and similar ones can be avoided if the buyer or investor consults reputable lawyers in Thailand as part of the due diligence process before entering into serious negotiations with a seller or investment partner.

    Legal acquisition of ownership through marriage and contract

    However, a foreign man can marry a Thai woman to make this possible, as many foreign men already do. In this case, ownership is transferred to the Thai wife through a purchase using her husband's money.

    Another popular method involves foreigners acquiring real estate in Thailand, establishing a company, and then purchasing properties through that company. However, this requires that the company be at least 51% Thai-owned. Thai law permits foreigners to hold a maximum of 49% of company shares.