Domestic / cross cultural issues - Thai / Foreigner concerns

Land purchase through Thai spouse forbidden: Land Dept

By Suttisan, Created on: 28/05/2009, Last updated on: 02/10/2016

» -- Land purchase through Thai spouse forbidden: Land Dept The director general of the Land Department has reiterated that foreigners using Thai nominees to buy land anywhere in the country will have their land title deeds revoked if caught – even if the nominee in question is a lawfully wedded...

• Krumm commented : The form that needs to be signed by Thais and their foreign spouses for Thais who want to buy land "Letter of Confirmation" states that the money used to purchase the land is the property of the Thai spouse who is either lawfully married or not lawfully married and that the land will not form part of the conjugal property. The Thai phrase “registered/unregistered spouses” on the form, “koo somrot doy chorp rue mi chorp duay kotmai” also appears in The Nationality Act and ministerial regulations relating to that Act but does not appear in the Civil and Commercial Code. Essentially this appears to mean that, while common law marriage is not recognized in the Civil and Commercial Code for purposes of divorce, inheritance etc, it is recognized for issues relating to nationality and by the Land Dept. The Land Dept’s website further gives an example (in Thai) of a Thai woman they successfully prosecuted for failing to disclose when she purchased land that she was the common law wife of a foreigner. The Land Dept claims they forced the sale of the land, in accordance with the Land Code, since she was deemed to have acted as a nominee for a foreigner. The explanatory notes in Thai that accompanied the form when it was first issued explained that, since there were now very many cases of Thai citizens with foreign spouses applying to transfer land to their names, the work of the Land Department in checking that the Thai spouses were using their own financial resources to purchase the land had become extremely burdensome. The Department had therefore decided to issue the form to simplify the work of officials and create uniformity of treatment in those cases that Thais with foreign spouses applied to transfer land to themselves. The effect seemed to be that by signing the form with the effect that the foreign spouse gave up any rights to the land or the proceeds from selling it even in the event of divorce, the Land Dept would not investigate the sources of funds and that giving money to a Thai lawfully married spouse or cohabitee to buy land would be thus “whitewashed”, as it no longer mattered what the source of funds was. Do the director general’s comments mean: 1) That the Land Dept has rescinded the ministerial order that created the “Letter of Confirmation” form and new regulations will follow? 2) That the Land Dept still accepts that the “Letter of Confirmation” confirms that the money used to purchase the land and the land itself after transfer is the Thai spouse’s property without need for further investigation but that couples who have failed to sign the form are in going to be in trouble? 3) Was he just shooting off his mouth to score brownie points for being nasty to foreigners for appearing without knowing what he was talking about? If no. 1 is correct I think the Land Dept will creating a lot of trouble for itself in establishing that the only people in Thailand who cannot lawfully accept gifts are Thais married to foreigners, in spite of the sections of the Civil and Commercial Code dealing with dowries. There will also be an outcry in defence of Thai women’s rights, as most Thai-foreign couples are Thai women and foreign men. The “Letter of Confirmation” was clearly designed to avoid all this trouble. So it would be counterintuitive to rescind it but we are in Thailand where logic doesn’t always prevail in governement decisions.

• Krumm commented : Several posters have suggested that land could be confiscated, if acquired through nominees, whether lawfully married Thai wives or others and Anuwat, himself, said title deeds would be revoked. The procedure under the Land Code is actually as follows: [i:3f04qsjo][b:3f04qsjo]Section 94[/b:3f04qsjo]. All the land which as alien has acquired unlawfully or without permission shall be disposed of by such alien within the time limit prescribed by the Director-General which shall not be less than one hundred eighty days nor more than one year. If the land is not disposed of within the time prescribed the Director-General shall have the power to dispose of it. The provisions on the forced sale of land in CHAPTER 3 shall apply mutatis mutandis. [/i:3f04qsjo] However, criminal penalties also apply to the foreign owner and the Thai nominee. Other posters suggested that having their wife leave the landed property to them in her will will enable them to inherit the property and sell it within 12 months, in the event that she predeceased him. This is true to a certain extent but must be legally married to have a prior claim over relatives. Even then, as in the French laws that Thailand borrowed its Civil and Commercial Code from, it is not possible to cut close blood relatives out of a will completely. Living children, parents and siblings would still be entitled to a share, whatever it says in the will.

• Krumm commented : Charlie, "Now, the question is: may a foreigner buy an house and/or land through a Thai registered company with a 49% company shares owned by a foreigner? If the answer is no, most of Real Estates in Thailand selling to foreigners land and/or house with that option are totally wrong and foreigners may be in trouble sooner or later." The answer to your question is no, unless the majority Thai shareholders can establish that they have enough assets and income to have made the investment in the company's shares themselves. If debt was used to purchase the property, teh company show loan agreements. According the latest ministerial regulation of January 2009, the Land officer must investigate if there is a foreign shareholder holding even one share, a foreign director or a foreigner appears to have been involved in setting up a company with no foreign shareholders or directors. Up until 2006 they only had to investigate if foreigners held 40% or more and it didn't matter if there was a foreign director, even if a foreign director was the sole authorized signatory. Since then things have been progressively tightened up for new applications to transfer land. I believe some farang developers are still using the company route to sell houses and condos in buildings where foreigners already own 49%. They have to set up a 100% Thai owned company with no foreign directors and hope that the Land Dept will agree to a transfer to a company that has no business and was obviously set up as a vehicle to buy a home. This done, the buyers have to try to transfer shares to themselves and get appointed as directors. It is probably still possible to transfer the shares because there is little cooperation between the Commerce Ministry and the Land Dept as yet but it is not always possible to transfer the land to a new shell company with no business operations.

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