Property and Real Estate Disputes in Thailand

Property and Real Estate Disputes in Thailand. Thailand’s property market is vibrant, with high demand from both domestic and foreign investors. But where there is value, there is also conflict. Property and real estate disputes in Thailand arise from title ambiguities, contractual breaches, boundary disagreements, inheritance claims, and foreign ownership restrictions. Because land law is a sensitive matter in Thailand, the legal framework is highly specific and disputes can be complex.

This article provides an in-depth look at the law, courts, procedures, and real-world cases surrounding property disputes in Thailand.

1. Legal Framework Governing Property Disputes

1.1 Land Code (1954)

The Land Code establishes ownership rights, registration requirements, and the authority of the Land Department. It strictly regulates foreign ownership and defines which land documents carry full ownership rights.

1.2 Civil and Commercial Code (CCC)

The CCC governs transactions such as sales, leases, mortgages, superficies, and usufructs. Many disputes arise from contractual breaches under these provisions.

1.3 Land Title Deeds

The strength of a claim often depends on the type of title deed (Chanote, Nor Sor 3 Gor, Nor Sor 3, etc.), with disputes commonly involving upgrades, overlapping surveys, or fraudulent transfers.

1.4 Procedural Rules

Disputes are generally handled by the Civil Court or its specialized divisions. The Civil Procedure Code and Consumer Case Procedure Act (for consumer property cases like housing developments) provide litigation frameworks.

2. Common Types of Property and Real Estate Disputes

2.1 Boundary Disputes

Cause: Unclear surveys under Nor Sor 3 titles.
Typical Case: Neighbors accuse each other of encroaching beyond rightful boundaries.
Resolution: Requires Land Department surveys and, in contested cases, court-appointed surveyors.

2.2 Title Fraud and Forgery

Cause: Forged powers of attorney or fraudulent use of identity cards.
Case Example: A forged land transfer registered at the Land Office. Courts can cancel fraudulent transfers, but disputes may hinge on whether the buyer acted in good faith.

2.3 Foreign Ownership Structures

Cause: Foreigners using Thai nominees to circumvent the Land Code.
Outcome: The Land Office may nullify the transaction, with potential criminal liability for nominee arrangements.

2.4 Breach of Contract (Sale or Lease)

Cause: Developers failing to deliver projects on time, or sellers backing out after deposit payments.
Law: CCC Sections on contracts, deposits, and remedies (e.g., damages, rescission).

2.5 Inheritance and Family Disputes

Cause: Disagreements among heirs regarding succession.
Law: CCC inheritance provisions; cases often require probate proceedings in Thai courts.

2.6 Mortgage and Foreclosure Disputes

Cause: Default on loans secured by land or condominiums.
Process: Banks file for foreclosure, the court orders auction, and disputes may arise over valuation or priority of claims.

3. Litigation Process in Property Disputes

3.1 Filing a Claim

Plaintiffs must submit a complaint to the Civil Court or Provincial Court, depending on jurisdiction.
Evidence often includes the title deed, contracts, and Land Department records.

3.2 Court Procedure

The court may appoint surveyors or experts for technical disputes.
Mediation is common, especially in boundary and inheritance disputes.

3.3 Appeals

Judgments may be appealed to the Court of Appeal and, in some cases, to the Supreme Court.

4. Real-World Examples

Case 1: Boundary Dispute Between Neighbors

Two households with Nor Sor 3 Gor titles disagreed on a small strip of land. The Land Office survey revealed both deeds overlapped due to historical surveying errors. The court ultimately ordered one title adjusted and damages for encroachment.

Case 2: Developer Fails to Deliver Condominium

A condominium developer promised completion within three years but failed due to financial problems. Buyers sued under the CCC for breach of contract. The court ordered the return of deposits plus interest and damages.

Case 3: Foreclosure on Mortgaged Land

A Thai borrower defaulted on a bank loan secured by a Chanote title. The bank sought foreclosure. The court ordered auction, and proceeds were applied to the loan. The borrower attempted to contest valuation but the court upheld the process.

Case 4: Inheritance Dispute Among Siblings

Siblings disputed their late father’s farmland. One sibling claimed sole ownership based on informal documents. The court ruled that the land was part of the estate under the CCC and divided shares equally among heirs.

5. Alternative Dispute Resolution (ADR)

Thai courts encourage mediation and arbitration, especially for commercial property disputes.

Mediation: Used in boundary, lease, and inheritance conflicts.
Arbitration: Common in disputes involving foreign investors, often under the Thai Arbitration Institute or international rules (ICC, SIAC).

6. Preventive Measures

Many disputes stem from inadequate due diligence. Common safeguards include:

Title Search: Verify encumbrances, mortgages, and liens at the Land Office.
Survey Check: Confirm accurate boundary demarcation.
Clear Contracts: Draft enforceable agreements with clear remedies.
Avoid Nominees: Foreigners should use legal alternatives (condo ownership, long-term lease, BOI approval).

7. Key Considerations for Foreigners

Foreigners often encounter disputes because of:

Misunderstanding restrictions on land ownership.
Entering into nominee agreements that are later invalidated.
Failing to register lease agreements properly (leases over three years must be registered).

8. Lessons from Thai Case Law

Thai courts consistently emphasize:

Registration principle: Rights in immovable property are enforceable only when registered at the Land Office.
Good faith purchasers: Buyers who acquire property in good faith may be protected even if prior fraud occurred.
Strict foreign ownership rules: Courts uphold the Land Code strictly, striking down nominee arrangements.

Conclusion

Property and real estate disputes in Thailand stem from the complexity of land documentation, restrictions on foreign ownership, and contractual breaches. The Land Code and Civil and Commercial Code provide the legal backbone, but real-world cases often turn on title deed type, registration, and factual evidence.

For buyers, investors, and heirs, the key lesson is clear: registration and due diligence determine the strength of rights. Whether in court or through alternative dispute resolution, Thai law provides mechanisms to settle disputes, but prevention through careful planning remains the most effective strategy.