Freehold ownership of apartment units in Thailand
Not all apartments in Thailand are registered under the Condominium Act B.E. 2522, and therefore not all apartments offer freehold ownership over the units. Only registered condominiums under the Condominium Act have individual ownership unit title deeds (issued by the Land Department) and offer freehold ownership for foreigners (within the 49% foreign ownership quota).
A unit in a multi unit residential building not registered as a condominium under the Condominium Act is generally sold under a lease agreement or leasehold structure, including rules and regulations and maintenance/ management contracts. The owner of the land and building sells the possession of a unit in the building under a 30 year lease agreement. The lease of a unit exceeding 3-years must be in writing, in Thai script and registered at the Land Department as a lease over a part of the building. The unit leased will be indicated and specified in the plan of the building and will be administrated by the local Land Office (i.e. only the Land Department is the competent authority to register enforceable leases over immovable properties up to 30 years).
Besides the environmental and building laws and regulations, residential apartment buildings (opposite registered condominiums) are governed by general laws in the Civil and Commercial Code applicable since there is no specific law issued regulating apartment unit ownership. Only true registered condominiums under the Condominium Act offer individual unit ownership title deeds and co-ownership over the land and common areas by the foreigner and are regulated under the Thailand Condominium Acts.
It is possible for each apartment in an apartment building not registered under the Condominium Act to obtain a 'Ta Bian Baan' or house registration book, however, this is an administrative document which must not be confused with an ownership title or ownerhip document as it is not.
A unit (not being a true condominium unit registered under the Thailand Condominium Act) can be sold through co-ownership in the apartment building as a whole by all the purchasers (a foreign or Thai juristic entity owns the building on behalf of the purchasers). Foreigners or foreign juristic entities are allowed to own a buildings under Thai law, however not the land it stands on. Here lies another drawback of apartment structures as the purchasers cannot have ownership or co-ownership in the land on which the apartment building stands. In a registered condominium the unit is freehold owned (within the foreign ownership ratio) and the land is legally jointly owned by all the unit owners. In case of ownership of an apartment building ownership over the building is combined with a land lease agreement in favor of the foreign owner(s) of the building, which guarantees the use and possion of the land, however, the land lease and possession/ use over the land is only guaranteed for 30-years. The lease must be renewed after that period (at the descetion of the owner) or the building remains illegally upon land owned by someone else.
Both in case of a unit lease (lease of part of the apartment building) or ownership of the apartment building by all the purchasers the guaranteed term of possession (lease) and therefore ownership over the unit or the building is limited to 30-years (opposite to true condominium units which offer indefinite ownership rights).
Only in case of a true condominium there are separate unit title deeds issued by the Land Department. The unit title deed or a copy of the unit title deed is the first document to obtain in case of a true condominium. The Land Department is responsible for issuance of condominium unit title deeds and registration of transactions, including the transfer of ownership and mortgages of condominium units. In case of an unregistered apartment building the Land Department is responsible for the registration of the lease of the unit (as part of a building) or transfer of ownership of the building as a whole to the unit purchasers.
Both in case of an off-the-plan apartment development or existing building it is highly advised to conduct due diligence on the developer, the sales structure, compliance with the law, building and local regulations before handing over any money. Bare in mind, even with the best of intentions of the seller, or what your sale agreements suggest different, you buy possession of the unit for a term up to 30 years and not ownership. Then another warning, some leases are poorly drafted, meaning under Thai law these lease terms are not transferable by inheritance! Buyer beware.
The sales structure of apartment units needs close scrutiny by a legal professional familiar with apartment structures as purchasers do not find the same protection as provided in the Condominium Act and Consumer Protection Act, which protects off-plan condominium unit purchasers. An apartment complex is an allowed concept, however, has drawbacks and offers less protection compared to freehold ownership in a registered condominium. Transfer and registration of rights in an apartment unit, as opposed to registered condos, require always cooperation and approval of the owner of the building.
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