Anyone intending to purchase or enter into a long-term lease of a completed house or villa in Thailand should carry out careful due diligence before making a payment or signing any document.

Unlike the purchase of a condominium, the transaction does not concern only a single residential unit. Several legal layers often need to be examined separately: the land, the building, the owner, legal access, existing encumbrances, rights of use and the rights that can be registered at the responsible Land Office.

This distinction is particularly important for foreign buyers. As a general rule, foreigners cannot own land in Thailand. Only a limited number of exceptions exist.

For this reason, houses and villas are frequently offered to foreign buyers through alternative structures, including long-term tenancies, leasehold arrangements, usufructs, rights of superficies or other rights of use. These structures can be practical, but they must be examined carefully.

Scope: this article concerns completed houses and villas

This article addresses the purchase or long-term lease of existing houses and villas in Thailand.

It applies in particular to:

• completed houses,
• completed villas,
• the purchase of a house combined with a separate right to use the land,
• villa leasehold arrangements,
• long-term tenancies,
• registrable rights of use,
• separate rights relating to the land and building,
• purchases of existing properties.

Traditional condominium purchases and off-plan projects are not the primary focus. Separate checklists should be used for those transactions.

The central question: what is actually being acquired?

When dealing with houses and villas in Thailand, the first step is to determine precisely what is included in the transaction.

• Is the land being purchased?
• Is only the building being purchased?
• Is the land being leased on a long-term basis?
• Will a right of use be registered?
• Is an existing lease being transferred or assumed?
• Is the house situated on land owned by another person?
• Which rights can the buyer register at the Land Office?

The purchase agreement alone does not provide a complete answer to these questions. The decisive issue is which rights are registered, or can be registered, on the land title.

Due Diligence Checklist for completed houses and villas

1. examine the land title

The land title is the starting point for every review. Buyers should not rely solely on copies, photographs or statements made by the seller. The original title should be verified at the responsible Land Office.The type of land title is particularly important. The different types of land titles are discussed in a separate blog article.

The following should be checked:

• the type of title,
• the plot number,
• the location and area,
• the registered owner,
• the front and back of the title,
• registered rights and encumbrances,
• transferability,
• boundaries,
• whether the registered information matches the actual use of the land.

The title review should be especially thorough for villas situated in rural areas, on slopes, near beaches or on islands.

2. verify the owner and authority to sell

The person registered on the land title must correspond to the seller or lessor. If another person signs, the validity of the power of attorney must be examined.

For individuals, the passport or identity card, marital status and legal authority to dispose of the property should be checked. For Thai companies, the review should include at least the company affidavit, directors, signing authority, shareholder structure and, where possible, financial documents. The Department of Business Development provides services for reviewing legal entities and corporate financial information.

The following should be checked:

• Who is registered as the owner?
• Is the seller legally entitled to dispose of the property?
• Are there multiple owners?
• Is the consent of a spouse required?
• Is there a power of attorney?
• Is the power of attorney current and formally valid?
• For companies, is the signing authority clear?
• Are there indications of insolvency, liquidation or legal disputes?

3. examine the building and the land separately

When purchasing a house or villa, buyers should not automatically assume that the land and building belong to the same person or are treated as a single legal asset.

Under certain circumstances in Thailand, the land and the building may be structured separately. This is particularly relevant where a foreign buyer intends to use or finance a house or villa without owning the underlying land.

The following should be checked:

• Who owns the land?
• Who constructed the building?
• Who holds the documents relating to the building?
• Is there a building permit?
• Does the existing building comply with the approved plans?
• Have there been extensions, alterations or unauthorised structures?
• Can the property legally be used as a residence?
• Are there insurance policies, maintenance records or warranties?

Existing properties should also be subject to a technical inspection. Legal due diligence does not replace a structural inspection by qualified professionals.

4. check encumbrances and third-party rights

Important registrations may appear on the back of the title. They can significantly affect the value and usability of the property.

The following should be checked:

• mortgages,
• registered tenancies or leasehold rights,
• servitudes,
• usufruct rights,
• rights of superficies,
• court orders preventing transfer,
• notices or annotations,
• security interests,
• rights of way,
• rights held by neighbours or other third parties.

A villa may appear to be unencumbered even though third-party rights have already been legally registered. Examining the back of the title is therefore essential.

5. verify legal access

A house or villa without legally secured access can lose a substantial part of its economic value. A road that is used in practice may not necessarily provide a legally enforceable right of access.

The following should be checked:

• Is there access from a public road?
• Is a right of way registered?
• Does access cross privately owned land?
• Is access merely tolerated verbally or in practice?
• Can vehicles, emergency services and utility providers reach the property?
• Are there disputes with neighbours?
• Will access remain protected if neighbouring land is sold?

Access should not be underestimated, especially for villas on slopes, near beaches, in rural areas or within resort developments.

6. check infrastructure and practical usability

In addition to legal access, the practical usability of the property should be examined.

Important points include:

• water supply,
• electricity supply,
• wastewater arrangements,
• internet and telecommunications,
• vehicle access,
• parking,
• drainage,
• waste disposal,
• security,
• property management,
• maintenance costs.

For villas within managed developments, it should also be established who is responsible for maintaining roads, common areas, security, swimming pools, gardens, wastewater systems and management services.

7. Check Zoning, Building Regulations and Permitted Use

Even for completed houses and villas, buyers should verify that the existing and intended use is legally permitted. This is especially relevant if the property is to be rented out, renovated, used commercially or operated as holiday accommodation.

The following should be checked:

• Is residential use permitted?
• Are there zoning restrictions?
• Do environmental requirements apply?
• Are there restrictions relating to coastal protection, slopes or national park boundaries?
• Are alterations or extensions permitted?
• Is tourist accommodation permitted?
• Are there local restrictions?
• Were previous alterations properly approved?

A property may have been built and occupied but still be unsuitable for the buyer’s intended use.

Leasehold and long-term tenancy

8. examine the leasehold structure

Many houses and villas are offered to foreign buyers through long-term leasehold structures rather than through the purchase of land. These arrangements can be practical, but they should not be confused with ownership.

Under Section 538 of the Thai Civil and Commercial Code, a lease of immovable property for more than three years is enforceable beyond three years only if it is made in writing and registered with the competent authority.

Section 540 generally limits a lease of immovable property to a maximum term of 30 years. A renewal is possible, but the renewed term may not exceed 30 years from the date of renewal.

The following should be checked:

• Who is the lessor?
• Is the lessor the owner or otherwise authorised to grant the lease?
• Can the lease be registered at the Land Office?
• Will the lease be entered on the back of the title?
• What term will actually be registered?
• Are there renewal options?
• What happens if the land is sold?
• What happens if the lessor or lessee dies?
• Are assignment, subletting and succession rights regulated?
• Are there termination rights in the event of breach?
• Who is responsible for taxes, fees, repairs and maintenance?

An unregistered long-term lease may be considerably weaker than its commercial presentation suggests.

9. Exercise Caution with 30 + 30 + 30-Year Structures

Particular caution is required where a structure is marketed as “30 + 30 + 30 years” or as an economically secured 90-year right.

Such arrangements were common in practice for many years. However, they should not be regarded as equivalent to ownership or as a guaranteed, registrable 90-year right.

In Supreme Court Decision No. 4655/2566, the Supreme Court examined a pre-agreed renewal structure. The renewal provisions were considered ineffective to the extent that they were intended to circumvent the statutory 30-year limit.

For buyers, this means that the first registered lease term must be assessed differently from promises concerning future renewals. Renewal clauses should therefore be examined very carefully and should not be treated as a guaranteed substitute for ownership.

Usufruct, Superficies and Other Rights of Use

10. Examine a Usufruct

A usufruct may give a person the right to possess and use immovable property and receive the benefits or income generated by it.

Section 1417 of the Thai Civil and Commercial Code describes a usufruct as a right over immovable property that includes possession, use and enjoyment of the property.

In practice, a usufruct may be relevant for married couples, unmarried partners or long-term occupation. However, it must be determined in each case whether this structure is appropriate for the intended arrangement.

The following should be checked:

• Who grants the usufruct?
• In whose favour is it granted?
• For what period?
• Will it be registered at the Land Office?
• What uses are permitted?
• May the property be rented out?
• What happens on death?
• Does the usufruct fit with the remainder of the structure?

11. Examine the Right of Superficies

A right of superficies may give a person the right to own buildings, structures or plantations on or beneath land owned by another person.

Section 1410 of the Thai Civil and Commercial Code describes the right of superficies accordingly as the right to own buildings or structures on or under another person’s land.

The following should be checked:

• Is a right of superficies required?
• Who owns the land?
• Who is intended to own the building?
• Will the right be registered?
• Is it transferable or inheritable?
• How long will it remain valid?
• What happens when the right ends?
• Does it fit with the lease or other rights of use?

A right of superficies can be useful in certain cases, but it does not replace a complete legal review of the overall structure.

The contract and registration must be consistent

A common mistake is for the private agreement to promise more than can actually be registered at the Land Office.

This is particularly risky in relation to:

• long-term leases,
• renewal clauses,
• usufruct rights,
• rights of superficies,
• rights of way,
• servitudes,
• separate ownership or control of the building and land,
• promises relating to inheritance or transfer,
• project management agreements.

Before signing, the buyer should verify whether the agreed rights can be registered and whether registration is expressly provided for in the transaction.

Check taxes and fees

Before completing the transaction, the expected taxes and fees should be calculated and clearly allocated in the agreement.

Property transfers in Thailand may involve the transfer fee, Specific Business Tax, Stamp Duty and Withholding Tax. The transfer fee is typically 2% of the official appraised value. Specific Business Tax may apply at 3.3%. Stamp Duty is generally 0.5%, but is not payable in addition to Specific Business Tax where Specific Business Tax applies.

The following should be clarified:

• Which fees will arise on transfer?
• Who will pay the transfer fee?
• Who will pay Specific Business Tax?
• Who will pay Stamp Duty?
• Who will pay Withholding Tax?
• Are lease registration fees payable?
• Are there costs for powers of attorney, translations or legalisation?
• Will the full purchase price or only part of it be registered?

The allocation of costs should not be left until the transfer date.

Marriage, Succession and Estate Planning

The buyer’s personal circumstances are also important in transactions involving houses, villas and leasehold structures. This is particularly relevant for foreign buyers, couples of different nationalities, unmarried couples and individuals holding assets in more than one country.

The following should be examined:

• What happens if the buyer dies?
• Can the relevant right be inherited?
• What happens if the Thai landowner dies?
• Is there a will?
• Is there a marriage agreement or inheritance agreement?
• What role does matrimonial property law play?
• What happens in the event of divorce?
• Are emergency powers of attorney available?
• Do documents need to be translated or legalised?

Succession issues should be considered at an early stage, particularly in relation to leasehold rights, usufructs and rights of superficies.

Documents required for an initial review

The following documents are typically useful for an initial due diligence review of a completed house or villa:

• a copy of the front and back of the land title,
• the precise location, a Google Maps link or coordinates,
• the plot number and responsible Land Office,
• the name and identity card or passport of the owner,
• for companies, the company affidavit and DBD documents,
• the draft purchase agreement or lease,
• existing lease, usufruct or superficies documents,
• evidence of mortgages or other encumbrances,
• information regarding legal access,
• a site plan,
• the building permit, if available,
• construction plans, if available,
• information regarding water, electricity, wastewater and internet,
• management or estate management agreements,
• details of ongoing costs,
• information regarding existing tenants or users,
• powers of attorney if a party will not attend in person.

Common mistakes made by foreign buyers

Foreign buyers frequently make similar mistakes when dealing with houses, villas and leasehold structures. These include:

• assuming that purchasing a house automatically includes rights to the land,
• relying on verbal assurances instead of registration,
• failing to examine the back of the land title,
• failing to verify legal access,
• purchasing or financing a house on another person’s land without a clear legal structure,
• confusing leasehold rights with ownership,
• relying on a 30 + 30 + 30-year structure without legal review,
• failing to check mortgages or third-party rights,
• failing to review building documents and permitted use,
• failing to regulate death, divorce or succession,
• using risky nominee structures,
• signing an agreement that cannot be implemented at the Land Office.

Warning signs

Particular caution is required if:

• only copies or photographs of the land title are provided,
• the seller or lessor is not registered on the title,
• a power of attorney appears unclear or outdated,
• access exists in practice but is not legally secured,
• a leasehold is presented as equivalent to ownership,
• a 30 + 30 + 30-year structure is promoted as a guaranteed 90-year right,
• substantial deposits are requested before due diligence,
• mortgages or other encumbrances are disclosed only at a late stage,
• building permits or construction documents are missing,
• the buyer is expected to finance a house on another person’s land without receiving clear rights over the building.

Distinction from condominium and off-plan transactions

This article concerns completed houses, villas and leasehold structures. If the transaction involves the purchase of a unit in a condominium project, the condominium due diligence article is relevant.

If the villa or house has not yet been completed, an additional off-plan or construction project review should be carried out. In that case, the focus will be on the developer, building contractor, project land, building permit, zoning, Environmental Impact Assessment, payment schedule, construction progress and liability for defects.

Conclusion

Purchasing or entering into a long-term lease of a house or villa in Thailand can be attractive, but the legal structure is often more complex than buyers initially expect. The building itself is only one part of the transaction. The underlying land title, owner, access, encumbrances, rights of use and registration at the Land Office are equally important.

Foreign buyers should be particularly careful not to assume that they are acquiring traditional ownership when the proposed structure is in fact based on a leasehold, usufruct, right of superficies or another form of right of use.

Careful due diligence helps protect buyers against unclear land rights, promises that cannot be registered, hidden encumbrances, insecure leasehold structures and future disputes with owners, heirs, neighbours or authorities.

Note: This article provides a general overview and does not replace legal advice based on the individual circumstances of a particular case.