Buying a villa in Thailand: what to check

What a lease gives you

• The longest lease Thai law allows is 30 years.
• A lease longer than three years must be registered at the Land Office. Registered, it stays in force if the land is sold.
• Clauses promising renewal for further terms are promises by the landowner, not registered rights. Thai courts have refused to treat renewals agreed in advance as an extension of the 30 years.
• Value the purchase on the first registered term. Treat anything beyond it as something that may or may not happen.
• Ask what happens to the lease if you die or want to sell, and have both written into it.

Longer leases have been proposed more than once. At the time of writing none of the proposals is law.

Owning the house, and other registered rights

The house can be owned separately from the land. For a new villa this is usually done by having the building permit issued in your name, or by registering the transfer of the building to you. A right of superficies, registered on the land title, gives you the right to own buildings on someone else's land for up to 30 years or for life.

A usufruct gives the right to use and enjoy a property, also for up to 30 years or for life, and ends when its holder dies. Which of these fits depends on your situation, and the Land Office decides what it will register.

Buying through a Thai company

A Thai company can own land, and some villas are sold this way. It is lawful only where the Thai shareholders are real investors who have put in their own money. Thai nationals holding shares on a foreigner's behalf are nominees, which is illegal, and enforcement has become markedly stricter: the authorities check where shareholders' money came from, and land held through nominees can be ordered sold.

Title and land checks

• Title: insist on a Chanote, the full title deed with surveyed boundaries. Lesser land documents carry less certainty.
• Encumbrances: mortgages, leases and rights of way registered on the title.
• Access: the plot must reach a public road, either directly or over a right of way registered in its favour.
• Planning: zoning, height limits and building rules for the plot, which near the coast and on hillsides can be strict.
• Ground: drainage, flooding in the rainy season, slopes and retaining walls.
• Services: mains electricity and water, or a well and how reliable it is.

The estate

A project that divides land into ten or more plots for sale needs a land allocation licence. A licensed estate must build and maintain the roads, drainage and common facilities, and its owners can form a juristic person to take them over.

Smaller developments are often run privately, with the roads and facilities owned by the developer. There, check that your right of way is registered, what the common fees are, who sets them and what happens if the developer sells or closes.

The build

• Villa contracts are less standardised than condominium contracts. The specification, the drawings and the warranty terms are whatever your contract says.
• Tie payments to construction milestones and have an independent inspector confirm each one before you pay.
• Get the warranty periods in writing for the structure, the roof, the pool and the installations.
• Consider holding back a part of the last payment until the defects found at handover are repaired.

Running costs and letting

A villa has its own pool, garden, roof and systems to maintain, plus estate fees, insurance and the yearly land and building tax. Budget for them over the whole period you expect to own it.

Letting for periods shorter than a month is hotel business under Thai law. Small properties can operate under a lighter registration, but it has conditions of its own. Ask what applies to the villa before you count on holiday-rental income.