Building Real Estate Thailand

General introduction to building and construction. Building a house or holiday home in Thailand

Construction in Thailand is mainly regulated by the Building Control Act and the Town and City Planning Act, both of which have been extensively revised in 1992. While the former provides for governmental control of virtually all types of construction by means of various applications and punishment in case of violation, the latter deals with the permissible uses of land in different zones. I addition there are under both Acts Ministerial Regulations specifying regulations and zone restrictions.

Building and construction can also be restricted on environmental laws and before building the construction needs to obtain approval and a license.In rural areas people can build without an official building permit.

In addition to the zone regulations (12) issued under the City Planning Act for Koh Samui there are 4 general zone regulations issued under the Building Control Act, giving standard building requirements and restrictions depending on its distance from the beach. These restrictions relate to the maximum size, design and the height of the building. The ministerial regulations of the Building Control Act BE 2522 for Samui 'governing the construction of buildings in the area where the building is located contains the restrictions related to the maximum size of the building, the required distance from the coastline and the height. Coastline means a line specified at the highest level of a tide. In the second region it is prohibit to construct a building which height is more than 12 meters, this is measured from the ground level to the highest point of the building. Terraced homes can be built whose total height, bottom to utmost top does not exceeds this height. It is not possible to legally protest about your neighbour blocking your views if they comply with the codes. Considerations when planning to build in Thailand (Samui) and locating land General practical considerations when buying undeveloped land in Samui that are often overlooked or which are taken for granted are: * access to the land, dirt roads on hill sides could become inaccessible during the rainy season and even could disappear: * trash disposal, how will you get rid of it; * sewage disposal, telephone and cable, electricity is another necessity (how do you get electricity hooked up); * water availability is essential; * on hill sides, roads, utilities, water, sewer, and foundations, such as pilings, can add 25-50% to building costs. A 10-degree slope is acceptable for building on hillsides. Flat land is the most desired land for building and the least expensive to develop; * land with barren rock will also increase costs of development; * uncontrolled development and deforestation of the Samui island increased the risks of land slides and should be considered before choosing a location; * are there any problems with the local Thai residents, noise nuisance or other disturbances from surrounding land or drainage problems (flooding areas in the rainy season). General legal considerations when planning to build a house in Thailand: * as foreigners can't own land in Thailand, is there a solid legal structure for a long term interest in the land e.g. partly foreign owned company, registered land lease and superficies; * does the land have a title deed, i.e. at least a Nor Sor 3 Gor/ Khor or better a Chanote and is there NO doubt on the legal status and history of the title (read up on title deeds) as many land documents in Samui are illegally issued. Investigations showed that there were land-right documents issued covering an land area larger than the whole size of the island. * get a plot plan indicating the specific property location and determine present use in zoning, according to what planning and zoning tells you; * is the access from a public road to the land secured (is there a private servitude, public or municipality road conecting the land); * any mortgages or other encunbrances registered against the land and recorded on the title deed; * are there general building restrictions and is a building permit issued in the name of the person who will own the building. Is ownership over the building separated from ownership over the land (right of superficies, building permit, separate sale agreement for a house). Purchasers of raw and undeveloped land must be aware that because of corruption at the Koh Samui Land Office and mafia like activities fast areas of forests and hill side land on the island have been encroached and land ownership papers have been falsified or issued illegally. Forest land is classified as government property and as such under the Ministry of Natural Resources and Environment and cannot be owned by any private entity. Illegally Issued land titles may be corrected or revoked and illegally obtained land will be seized and returned to the State. In Samui encroached public land has been bought and sold several times before ending up with their current owners, however, it is the present and mostly foreign owners of the land who bear the risk of being charged either with illegal possession or encroachment into the reserved areas like public and forest land (see news in the homepage and read sample article). Zone regulations for Samui under the Building Control Act Building zones under the Thailand building Control Act Area 1: No building is allowed up to 10 meters from the beach. The coastline or beachline is a moving line and often at the discrition of the Or Bor Tor who can choose more or less where it starts. Area 2: Building of a single storey house not exceeding a hight of 6 meters with a total building area of up to 75 sq.m. is allowed up to 50 metres from the beach or coastline. Area 3: Building of a building with a height of 12 metres and a ground floor or total building area of not more than 2000 sq.m. Area 4: Any building of up to 12 metres can be built within an area of more than 200 metres from the beach. The above zoning are the zones under the Building Control Act, read building regulation issued under the Building Control Act B.E 2522 .for Samui in more detail. Different zones under the City Planning Act can be found here (city planning act map). This is for information purposes only, as regulations could change in detail the information may not be up to date. Property development in Samui Like elsewhere in Thailand also Samui has restrictions and the requirements for utilization of land. The main aim under the Town and City Planning Act for Samui is to set rules for sustainable development of Samui and protect Samui's environment. Under the new zoning regulations in the agriculture green area (zone 6), which covers large areas of the island, land subdivision of titled land is not permissible for residential development. * Flooding and Landslides imminent on Samui It is and has been common practice for land speculators in Koh Samui to subdivide a larger plot(s) of land into less than 10 plots (less than 10 to circumvent the Land Allocation Act and housing development licenses) and to offer the smaller saleable sized plots for sale to foreigners through nominee structured holding companies suggesting a licensed residential housing property development. Using this trick local and foreign land speculators have been able to subdivide land not suitable for development into more than 9 plots without having to apply for a land allocation permit or permission to develop the land. If necessary, for developments exceeding 9 plots, one or more of the larger plots within the project are registered under a different owner/ company to apply for a separate subdivision, again into less than 10 plots to avoid the Land Allocation Act or Environmental Control regulations. Investigations showed that the majority of the developers in Samui advertising property in magazines and on websites were not licensed to do business and had violated the Land Department's land allocation regulations (this practice is not isolated to Samui). As a result land titles are dodgy and the status of the land NOT protected by land allocation laws or general development regulations. Foreigners have been warned they risk losing all and may face legal problems later. Read warning in the Bangkok Post and Community Newspaper (Warning buyers samui land Articles about property development in Samui). Environmental protection To preserve natural resources the Minister for Natural Resources announced (December 2005) a consolidated campaign to crack down on illegal logging and environmental destruction in selected provinces, one of which is Suratthani and therefore includes Koh Samui. Companies and individuals that cut down trees or destroy the natural environment illegally will be punished, which in many cases mean the companies and individuals illegally clearing land for development. The Governor of Suratthani has expressed support for this campaign. August 2006; Following a series of inspection trips around the Samui Khun Tingchai Rochanaknan form the Department of Natural Resources and Environment recently said that because of continued uncontrolled development, Samui in once again in great danger of flash floods and landslides this year. March 2007; Solution to Samui flooding discussed 'Issue land title deeds and building permits according to the rules'. ( article) It is further expected that Samui mountain land will be protected by restricting all future construction of any type 80 meters above sea level. Phuket has the same rule. To protect the environment in Samui it would be likely that Samui will get similar restrictions soon. Often areas for current suggested 'developments' involve protected forest mountain land. If land is cleared for development in this area the government could say: you are not allowed to be there in the first place, building is not allowed and we want to replant the trees and the title deeds will be revoked. Samui Community March 15 2007: 'The DSI Secretary-General Mr. Sunai Manomai-udom, vowed to take back all land in forest and mountain areas that was illegally occupied by foreigners'. The Nation April 11 2007: Research by the Agency for Real Estate Affairs indicates the new city plan on Koh Samui will mandate that property projects cannot be constructed higher than 150 metres above sea level (see under News). Building and construction The image on the right is a house construction near Choeng Mon, northern Samui, with a contract price of 1,200,000 Thai baht (approx 25,000 Euros) all-in, not including the land. Building and construction in the resort areas of Thailand are generally pre-paid during the construction by the purchasers (instalments for the building are paid upfront). There is little control and regulations protecting consumers and building companies in Samui often deliver poor quality workmanship. Construction of building Samui Some of the builders in Samui are unreliable and it happens regularly that a contractor walks away during the construction with a substantial profit (the client's deposit and payments) leaving the client with the mess and a substantial loss, or the quality of the built is even compared to Thai standards extremely poor. In this situation you can try to sue the contractor but you will have little chance of success as this is a long and difficult court procedure with no guarantee of success. And if successful in the end the contractor will be long gone or disolved. In addition, the contractors often enjoys limited liability via his limited liability company. It could help to ask locals, check references, duration of the contractor's business, share capital (if any), Civil Court check, track record, have detailed drawings and specifications and a solid Thai English construction agreement without large payments upfront, etc. Building warranties may turn out to be worthless as construction companies in Samui come and go, or go bankrupt or are simply dissolved and the contractor continues under a new company without being liable for previous mistakes or faults. Building and development is a mess in Samui and many houses are not built according to the drawings and building permit that was issued (if any) and conflicting with the applicable construction rules and regulations and other relevant rules or constructed in a protected area, like nature/ watershed/ forest areas. Some of these house owners risk (or are already ordered) rectification of the incorrect part or demolition of the building (height, distance to the public road or beach, zoning, materials used, roof design). The building Control Act imposes heavy fines and imprisonment on violators. In addition, if any violation is found (often initiated by a Thai neighbour), the authority has the power to issue a stop-work order and demand rectification of the building or an incorrect part within a reasonable time. If the building or an incorrect part cannot be rectified, the authority has the power to order a demolition thereof. Koh Samui, nearby Koh Phangnan and Koh Taen within Surat Thani will be declared environmental protection zones (Environmental Protection Act), said Usa Kiatchaipipat, director of urban environment and area planning at the Office of Natural Resources and Environmental Policy and Planning (July 16 2006). Around 34,000 rai out of 150,000 rai of land on Koh Samui is in the process of being declared protected forest. The law in Samui is not always followed, but note that in Phuket a few years ago land deeds of 10,000 rai of agricultural and forest land were revoked and returned to the state because of illegal development. A property development scam where influential figures and high end officials transformed farm land and forest area into luxury resorts, hotels and marinas. Could this also happen in Samui.