Doing Business in Thailand

In Thailand claims on land may be divided in two categories: The major and the minor claims. In this post we will introduce the highest claims on land that are the Nor Sor Sam or Certificate of Use (NS-3), the Nor Sor Sam Gor or Confirmed Certificate of Use (NS-3K) and the Chanote (NS-4) claims.

What are the rights evidenced by the major claims on land?

The NS-3 and NS-3K evidence possession and the NS-4 shows full ownership rights. In 2005, there were 1.66 million NS-3 claims representing 14.79 million rai; 6.03 million NS-3K claims representing 32.42 million rai; and 22.11 million NS-4 claims representing 78.20 million rai.

NS-3 and NS-3K are “a document from a competent official certifying that land has already been put to use”. They are recognizable by the Green Garuda symbols on the top of the front page. The NS-4, also known as Chanote, is a full title deed i.e. “the document showing ownership of the land and including the land title deed with map, pre-emption title deed and pre-emption certificate stamped “Already put to use”. The NS-4 is recognizable by the red Garuda symbol on the top of the front page.

The front page of an NS-3, NS-3K or an NS-4 shows the legal information pertaining to the document, such as the document number, land number, survey number, book page, etc. It also includes a diagram of the parcel, the size of the parcel and the name and address of the first holder of the document with the signatures of the officers and official seals. The back page of the document shows the details of all the dealing pertaining to the land represented by the document (liens, charges, mortgages, leases). NS-3 and NS-3K records are kept at the local District Land Departments and NS-4 records are kept at the Provincial Land Departments. The original is always kept at the Land Department and one duplicate given to the holder. In case of discrepancies between the original at the Land Department and the duplicate, the original of the Land Department prevails. If many transactions have been registered on a land, then several leafs will be bound together. All those documents also have in common that they are fully negotiable subject to the Land Code and can be used as a surety for a commercial loan.

Are Property Rights Absolute?

As in most countries, private property rights are not absolute and land rights may be lost to the State under certain circumstances. In addition, the owner of an NS-3, NS-3K or NS-4 may also lose his rights to another private party through the mechanism of hostile possession. Hostile possession is the claim of a person settled upon the landowner’s absence from the landowner plot. If the owner does not act and allows the squatter to settle peacefully upon the land for an uninterrupted period, the squatter may have a valid claim on the land after a certain period.

If a Chanote represents the land plot, the landowner will have 10 years to remove the unlawful settler. If an NS-3 or NS-3K represents the land, the owner of the certificate will only have one year to take action and file an action for the removal of the disturbance with the local competent court in order to remove the unlawful settler. If the landowner does not act within the legal period, the landowner will lose his land to the settler.

How are rights on land transfered?

The transfer of land rights, mortgaging of land and registration of any liens or charges are carried out at the Land Department Office in Thailand. All transactions on NS-3 and NS-3K titles are done at the district Land Department, while transactions on NS-4 are done at the provincial land office.

The transaction is quite straightforward (if you are Thai) and may be accomplished in only a few hours. The parties to the transaction may either attend in person or be represented by power of attorney. The parties will be required to fill out the appropriate government forms and pay the required fees and taxes. In order for the transaction to take place, the owner of the land must bring his duplicate copy of the document to the Land Department on the day of the transaction and the Land Department officer will amend both the original title and the duplicate immediately. On average, the transfer of a title takes less than a day. In terms of payment, the buyer will generally have paid a deposit on the date of reservation. The payment of the balance due by the buyer will be made by cashier’s check or bank draft. The buyer will purchase the cashier’s check or bank draft one day in advance and provide copies to the seller the affirm the authenticity of the check. On the day of the transaction, the buyer will show the cashier’s checks to the seller who will then file the documents for the amendment of the title. The officer will process the amendment and inform the parties when the amendment is complete. The buyer will then give the check to the seller and collect the amended title.

In tomorrow post we will review the differences between the three highest land claims

Note: This post is an excerpt of Rene Philippe Dubout first book: “How to Purchase Real Estate Offshore Safely: The Case of Thailand” published in february 2009. Second edition to be published in October 2009 under the title “How to Safely Purchase Real Estate in Thailand”

Note: This post is an excerpt of Rene Philippe Dubout first book: “How to Purchase Real Estate Offshore Safely: The Case of Thailand” published in february 2009. Second edition to be published in October 2009 under the title “How to Safely Purchase Real Estate in Thailand”

About the Author:

The author Rene-Philippe DUBOUT is a lawyer since 1990 when he was admitted to Geneva bar (Switzerland). He practiced as a litigator there for 10 years until he moved to Thailand in 1999. In 2002 he founded with a group of Thai lawyers Rene Philippe & Partners Ltd a local law firm that specialized in Cross Borders Investments and Real Estate. He has been lecturing in several Thai Universities and a speaker to numerous conferences and seminars. He is the author of a must read book:”How to Purchase Real Estate Offshore Safely: The Case of Thailand”.

http//:www.renephilippe.com

© Copyrights 2009 – Rene Philippe Dubout – This article may be reprinted if information about the author, the websites, and the URLs remain intact.

Originally posted 2009-09-14 02:59:08.

Related posts:

1. Thailand Property: Land Rights Classification: Major Claims
2. Thailand Property: Land Rights Classification: Minor Claims
3. Thailand Property: How are rights on buildings evidenced?
4. Buying Property: Two issues to consider before buying a land
5. Buying Property: Comparing Foreign Land Ownership in Asia
6. Thailand Property: Difference between condos and apartments
7. Buying Land: The Thai spouse right to own land freehold
8. Thailand Property: How to check who owns a building?