“Condominium Freehold” Ownership

There is a general perception that Thai property law is complicated. Actually, the opposite is true: the laws relating to foreign property ownership in Thailand are quite clear. Foreigners can buy and own freehold condominiums. Foreigners can buy and own buildings and structures (distinct from the land on which they sit), and foreigners can take leases on land or property. Foreigners cannot own land."Condominium Freehold" Title Ownership Phuket

“Condominium Freehold” Ownership
One special type of freehold title does exist for foreigners. The Condominium Act, where non-Thai nationals can directly and legally own in Thailand, just as they would own a freehold property in their own country. It’s called a “Condominium Freehold” title, and The Condominium Act has helped stimulate foreign property investment in Thailand.

Under the Condominium Act, a foreigner can buy one or more condominium units, but foreigners can’t own more than 49% of the units in a condominium building. The Act also provides a degree of “consumer protection” for buyers.

Buying “condominium freehold” ownership is therefore one of the easiest ways for foreigners to acquire direct property ownership in Thailand, and it is the most clear, straightforward and unambiguous ownership type. For these reasons, “condominium freehold” units tend to sell out first.

“Leasehold”
Leasehold is not just a contractual agreement; it is also a registrable legal interest against the title. Once registered, the lease becomes a lien against the title deed. In Thailand, the maximum legal period stipulated for a lease is 30 years. However, land offices in Thailand do allow private agreements to contain lease “renewals”. A common “leasehold” structure to come across in Thailand is a 30+30+30-year leasehold structure.

“Leasehold with a share of Freehold”
This falls under the category of protective leasehold structures and is commonly used by off-plan developers sitting on one piece of freehold land owned by a Thai company. This gives leaseholders additional security and a greater degree of control over their investment.

“Leasehold with option to purchase Freehold”
Should Thai law change in the future to allow foreigners to own land directly, this gives the leaseholder the right to transfer legal ownership to freehold.

Whether or not these laws will change over time is another matter. The only thing that can be said with certainty is that these legal structures have been used in various forms for many years. Although a “Condominium Freehold” title holds distinct advantages, a leasehold bears no specific disadvantages if structured correctly. It is worth noting that while condominium ownership is more certain and regulated, this does not remove the need to engage a lawyer to act on your behalf.

Email us at: sales@allphuketcondos.com

Sources: “Buying Property in Thailand” by Rodney Waller.

G.Carlson

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