Property and Real Estate Disputes in Thailand

Thailand’s dynamic property market attracts not only Thai nationals but also foreigners who invest in condominiums, lease land, or enter into joint ventures with Thai partners. While the law provides clear structures for property ownership, restrictions on foreign ownership, and contractual rights, disputes often arise.

Property and real estate conflicts in Thailand can involve ownership claims, boundary disputes, contractual breaches, inheritance issues, or fraud. Understanding the legal framework, common causes, court procedures, and dispute resolution mechanisms is essential for anyone involved in real estate transactions.

1. Legal Framework

Property and real estate in Thailand are governed by several key laws:

Civil and Commercial Code (CCC) – Governs contracts, leases, rights of superficies, usufructs, mortgages, and succession.
Land Code Act B.E. 2497 (1954) – Regulates land ownership, title deeds, and foreign restrictions.
Condominium Act B.E. 2522 (1979) – Governs condominium ownership, including the 49% foreign quota.
Land Development Act B.E. 2543 (2000) – Regulates subdivisions and land development projects.
Civil Procedure Code – Governs court proceedings for property disputes.

2. Common Causes of Property and Real Estate Disputes

A. Ownership Disputes

Forgery or fraud: Fake or altered land title deeds.
Inheritance conflicts: Multiple heirs claiming rights over family land.
Foreign ownership restrictions: Disputes where foreigners improperly attempt to own land through Thai nominees.

B. Boundary and Encroachment Issues

Disagreements over land boundaries, particularly where survey markers are missing or unclear.
Encroachment by neighboring landowners or squatters.

C. Contractual Breaches

Breach of sale and purchase agreements.
Developers failing to deliver property on schedule.
Sellers failing to transfer ownership despite payment.

D. Condominium Disputes

Disputes over common area management.
Failure to pay common area maintenance fees.
Foreign ownership exceeding the legal quota.

E. Lease and Superficies Issues

Landlords refusing to honor renewal clauses in leases.
Conflicts over building ownership where superficies agreements exist.
Termination of leases and eviction proceedings.

F. Construction and Development Disputes

Contractors failing to complete projects to specification.
Breach of construction contracts.
Defects in new developments.

G. Mortgage and Foreclosure

Banks foreclosing on property when borrowers default.
Disputes over enforcement of mortgages.

3. Land Ownership and Title Deeds

Land title deeds are central to ownership disputes:

Chanote (Nor Sor 4 Jor): Full ownership title with precise boundaries.
Nor Sor 3 and Nor Sor 3 Gor: Certificates of utilization, upgradeable to Chanote.
Possessory rights (Sor Kor 1, Por Bor Tor 5): Do not grant ownership; often a source of dispute when mistaken for title deeds.

Fraudulent sales or double sales sometimes involve forged or improperly issued titles. Due diligence at the Land Office is critical before any transaction.

4. Foreign Ownership Restrictions and Nominee Structures

Under the Land Code, foreigners generally cannot own land. Attempts to bypass restrictions through “nominee” ownership (using Thai nationals as proxies) can result in disputes, as such arrangements are often unenforceable and expose foreigners to legal risk.

Foreigners may, however, own:

Condominiums (up to 49% of the total sellable area in a building).
Structures on leased land (through superficies).
Long-term leases (up to 30 years, with possible renewals).

Disputes often arise when foreign buyers misunderstand these restrictions or when nominee agreements collapse.

5. Dispute Resolution Mechanisms

A. Negotiation and Settlement

Most property disputes begin with negotiation. Many contracts in Thailand include dispute resolution clauses encouraging amicable settlement.

B. Mediation

Courts in Thailand often encourage mediation before proceeding with trial. Mediation can save time and preserve relationships.

C. Arbitration

Certain contracts, particularly involving foreign investors and large developments, include arbitration clauses (e.g., under the Thai Arbitration Institute). Arbitration can be faster than litigation but requires both parties’ consent.

D. Litigation in Thai Courts

Property disputes are typically handled by the Civil Court or the Provincial Court.
The Central Intellectual Property and International Trade Court may have jurisdiction in cases involving cross-border property contracts.
Proceedings are conducted in Thai, and foreign parties must use licensed Thai lawyers.

6. Litigation Process in Property Disputes

Filing of complaint: Plaintiff files with the court of jurisdiction.
Defense and counterclaim: Defendant responds; counterclaims may be filed.
Pre-trial conference/mediation: Court may direct parties to mediate.
Trial: Witness examination, expert testimony, documentary evidence.
Judgment: Court issues ruling.
Appeals: Parties may appeal to the Court of Appeal and ultimately the Supreme Court.

Property disputes can take months to several years, depending on complexity and appeals.

7. Remedies and Court Orders

Depending on the dispute, Thai courts may grant:

Specific performance: Compelling a party to transfer property or fulfill contractual obligations.
Damages: Compensation for financial loss.
Cancellation of contract: Voiding fraudulent or breached agreements.
Eviction orders: Removing unlawful occupants or tenants.
Rectification of title deeds: Correcting fraudulent or erroneous land records.

8. Special Issues in Property Disputes

Statute of limitations: Property claims may be time-barred if not brought within specified periods (generally 10 years for contractual disputes involving immovable property).
Inheritance conflicts: Thai intestacy laws divide assets among statutory heirs, often leading to disputes where wills are absent or unclear.
Developer insolvency: Buyers may face difficulty recovering payments when developers go bankrupt.
Cross-border aspects: When one party is foreign, enforcement of judgments abroad or recognition of foreign judgments in Thailand may be an issue.

9. Preventing Property Disputes

Due diligence: Verify land titles at the Land Office, check encumbrances (mortgages, liens).
Clear contracts: Well-drafted agreements, bilingual if necessary, reduce misunderstandings.
Proper registration: Ensure leases, superficies, mortgages, and transfers are registered with the Land Office.
Use of escrow: Safeguards buyer payments in property transactions.
Legal advice: Engage qualified Thai lawyers before entering into significant real estate deals.

10. Case Example

A foreign investor leases land in Phuket from a Thai partner for 30 years to build a villa. The lease includes a renewal clause, but it is not registered at the Land Office. After 30 years, the Thai partner’s heirs refuse to renew, claiming ownership of the villa. The court rules that while the lease was valid for 30 years, the renewal was only contractual and not enforceable against the heirs. However, because the investor also registered a superficies, ownership of the villa remains with him, even though the land reverts to the heirs.

This example illustrates the importance of registration and combining leasehold with other rights like superficies to prevent disputes.

Conclusion

Property and real estate disputes in Thailand arise from ownership conflicts, inheritance issues, contractual breaches, and misunderstandings about foreign ownership restrictions. The legal framework provides remedies through negotiation, mediation, arbitration, and litigation.

For both Thais and foreigners, the key to avoiding costly disputes lies in due diligence, properly drafted contracts, registration of rights, and professional legal advice. Once disputes arise, timely legal action and understanding of Thai court procedures are essential for protecting property rights.

Disclaimer: This article provides general information about property and real estate disputes in Thailand. It does not constitute legal advice. For case-specific guidance, consult a licensed Thai property lawyer.