Buying Land & Property in Koh Chang

Buying property in Thailand for personal use or as an investment is a more complicated process than in many countries. Before proceeding, it would be best to obtain advice from a reputable real estate agent or from a lawyer. This will save you time and avoid frustration.

A good start would be to read a book called "Laws governing the Acquisition of Immovable Property by Aliens in Thailand". Yes, foreigners are called Aliens. This publication has been compiled by Sansiri Public Company Limited and is available for Baht 450 in most bookshops. If you cannot find it, call Sansiri PCL, Legal Department, at 201-3812 and ask how you can get a copy of it.

Since 1971, a foreigner (an alien) or a majority-owned foreign company cannot own land or land with buildings in Thailand. Foreigners can own condominiums. In May 2001, however, the Amendment Land Code Act came into force and does make an exception. The Act's relevant points translate as follows:

"Aliens wishing to acquire land in Thailand must bring foreign currency into Thailand for certain types of investments in an amount to be specified in ministerial regulations which shall in no event be less than 40 million Baht and obtain permission from the Minister of Interior. Any aliens meeting such requirements may be granted permission to own land in an area not exceeding one (1) rai for residential purposes."

Land Measurements in Thailand

Land in Thailand is measured in talang wah, ngarn and rai.

1 talang wah = 4 square meters

100 talang wah = 1 ngarn or 400 square meters

1 rai = 4 ngarn or 1,600 square meters

In other words:

1 acre = 2.529 rai

1 hectare = 6 rai and 1 ngarn

There are broadly 4 types of Land Title in Thailand, they being Title Deeds (Chanote), Confirmed Certificate of Use (Nor Sor Saam Kor), Certificate of Use (Ngor Sor Saam) and Certificate of Possession (Sor Kor Nung) are common evidence of land ownership, possessory rights and other interests in land. An explaination of each follows.

Chanote (Title Deeds)

Freehold title with the owner able to leave the land unattended. Title deeds are registered at the Land Department in the province in which the land is located, and there is no wating time required to transfer title. Chanote titles are accurately surveyed, plotted in relation to a national survey grid and also marked by unique numbered marker posts set in the ground. It is the long term goal of the Land Department, that all land in Thailand will be covered under the Chanote title system.

Nor Sor Saam Kor (Confirmed Certificate of Use)

This certifies that the person named on the certificate has the confirmed right to use the land, implying all requirements for the issuance of title deed have been met, and issuance of the title deed is pending. They may be sold, leased, used as mortgage collateral etc. The holder of this certificate cannot leave the land unattended for more than 12 years.

The Chanote and the Nor Sor Sam Kor are the only titles over which registerable right of ownership or lease can exist, and are as such the only ones that a prudent foreigner should consider.

Nor Sor Sam (Certificate of Use)

Similar to the above Confirmed Certificate of Use except that not all of the formalities to certify the right to use have been performed. Before a transfer can be made, a notice of intent must be posted and then 30 days public notice is necessary before any change of status over the land can be registered.

Sor Kor Nung (Certificate of Possession)

This recognises that a person is in possession of land but the Certificate does not imply that there are any rights associated which the possession. It is not transferable, but a person in possession may transfer physical possession and the new possessor may apply for a new Certificate of Possession.

Look Before You Leap

After reading through the different types of title to land, buildings and condominiums and the methods by which a foreigner may acquire ownership or lease rights in these properties. you may feel that you now know all that you need to take the plunge and commit to the purchase of your "Dream Home".

Start your search by all means, but before you set pen to paper, take a short pause to consider what you are doing. While most developers and private vendors are ethical, there are, as everywhere, a number who may not meet your expectations.

The following steps will help minimize any risk.

Ask to see a copy of the front and back of the land or condo title deed. A faithful translation of this will show you who the current owner is; if the property has any endorsements or liens; the shape, area and orientation of the property and border to a public property (such as a road, stream or the ocean). Use a measuring tape and compass (or a steady pace and the location of the sun) to ascertain if the title appears to accurately represent the offered property and be sure you are dealing with the owner of the property or his appointed representative.

In the case of a building under construction or land undergoing subdivision look carefully at the provisions for issuing a title, and easement rights. Also look out for a clause providing for the sale price to be adjusted pro-rata with the final titled area. There have been instances in which vendors deliberately understate the area of a property.

Verify the access to the property

If the property in question is not adjacent to a public road it is essential that there is evidence of a registered easement for vehicle access and all utility connections. It has been known for vendors to grant an easement for vehicular access and then later when the property is developed refuse to allow the connection of electrical cables until further payments are made.

Read the sales contract

This may sound obvious, but it is truly astonishing how many people sign first and ask questions afterwards. Unlike most of the Western world, Thailand has no Consumer Protection Act (or the equivalent). "Caveat Emptor" is the order of the day. If the contract is not in English or a language that you understand, insist upon a translation by a competent, independent professional.

If you see a clause which you don't understand seek professional advice. If you see a clause as patently unsavory as, for example, "During the period of this contract the Buyer may not take legal action against the Seller" (which amazingly more than a few people have signed) stop! Just because you are in contact with a seemingly "friendly" vendor don't overlook the precautions you would take at home.

Koh Chang Specific

Prices of land on Koh Chang started rising around 2-3 years ago with the advent of the new airport in Trat. Add the current Prime Minister’s enthusiasm about developing Koh Chang Island along the lines of Phuket and real estate and land deals on Koh Chang aren’t quite the bargain they once were. Development on Koh Chang hasn’t advanced that far yet however and there are still some good Koh Chang real estate deals to be found on forgotten pieces of land accumulated over the years by local families and informed businesspersons.

Land prices on Koh Chang are highest on the popular west coast and there is not much land available for sale in this area of Koh Chang so if you want to find a bargain in Koh Chang real estate you should check other beaches perhaps on the East or South Coast. However with 3 new roads in the planning or already under construction getting around Koh Chang will become much easier and selling rates for land on Koh Chang even in these more remote areas are expected to increase

Some plots of land for sale on Koh Chang have proper land titles such as Nor Sor Sam or Chanote. Real estate on Koh Chang with proper land titles is obviously more expensive - but much easier to purchase - and as long as you don’t build too close to the shore (currently no nearer than 30 metres – may be subject to change) putting up new buildings, your own private home or a small business shouldn’t pose too many obstacles. Best to check with the local land department office/planning officer first to see if there are any local laws that may affect your project.

Of course the most attractively priced bits of real estate on Koh Chang are the plots of unused farm land which have no papers at all or a land deed sometimes referred to as a “Por Bor Tor”. Officially you are not permitted to build on such land. But as you can see in the case of Koh Phi Phi there are ways around legal issues governing buying land in Thailand if you have the right approach and know the right people. If you want to buy farm land in Koh Chang you should direct your self to the locally elected Phu Yai Barn in charge of the area where you want to buy the land on Koh Chang. In some cases you may even be able to upgrade the land deed to a better title if you can get the signed consent of the landowners with the adjoining land - but it can be a time consuming task to track them down and needless to say they will need to be properly thanked for their help.

It is essential then when purchasing real estate or land in Koh Chang - or anywhere in Thailand - to know the land title of the land or property you are buying. Honest landowners and agents will be more than willing to produce the land papers. It is recommended to avoid buying land on Koh Chang from any seller vague on this point. If you haven’t been in Thailand very long then you’d be well advised to follow the legal route and the recommendations of a good lawyer when considering buying land on Koh Chang. It may be more costly but at least you’ll be sure that the land on Koh Chang you are buying won’t turn out to be a hollow investment.