Changing Condo From Thai To Farang Ownership

[PattayaParent]

I'm interested in buying a condo that's currently in a Thai name but the owner tells me that it canont be changed to a Farang name as it's over 5 years from when the condo was developed and after that time all titles become fixed and cannot be changed.

Now I know I have to check the 51% / 49% Thai / Farang ownership percentage but that's not a problem, just that I've never heard of this '5 year rule' and I know a Farang guy that bought a condo from a Thai and had it transferred to his own name when it was over 5 years old.

Has anyone ever heard of this '5 year rule'? or is the seller just mistaken?

[Khun Bob]

I've never heard of this one either - suggest you take a visit by yourself to the local land office and ask them there.

You should then find out the truth.

Seems funny if the person wants to sell to you. Who told them this ? What basis is this on ? Get some background information on theor beleif and dont challenge them. Then find some body who is really in the know who will pass the truth on and you should be ok.

Are they setting up a situation for a bung to sort a non-real problem out ?

Edited November 6, 2007 by Khun Bob

[donx]

Here are just a few of thoughts that came to my mind after reading your post.

1. Not all condos allow farang ownership. The condo must be registered to allow farang ownership.

2. Although most condos that allow farangs to own units are restricted to allow farang to own only 49% of the livable space, there were some condos following the 1997 crash that were allowed to have a higher (100%?) ratio of farang ownership. Perhaps the Thai owner is referring to one of those condos which are no longer allowed this increased farang to Thai ownership level.

I'll let the experts chime in as most of my understanding of these laws come from my involvement in this forum.

[PattayaParent]

Khun Bob, I don't know where he got the info from, it was just a quick chat to him in passing and I mentioned if he's ever thinking of selling I want first refusal. He said he'd be tempted but I should be aware that I can't put it in a Farang name. To me that means a cheaper price can be offered rather than paying more to solve the 'problem'.

I'm going to check with the land office this week the Thai / Farang ownership percentage and if any units can be changed. I'm vaguely aware of something that says once the name has been changed from Farang to Thai that it can't be changed back again but I don't think he's refering to this, and I'm not completely sure it's correct anyway.

donx - the condo building is already registered to allow Farang ownership as many Farangs (including myself) already own there but you may be right that he may mean the 100% relaxation that was allowed and there's no changing anymore.

Going to get more info as Khun Bob suggests and then talk to him again.

[Khun Bob]

Correct me if if I'm wrong - but as far as I am currently aware a non-thai can own units in **any** condo so long as the overall non-thai ownership is 49% or less.

I beleive that the laws were different a few years ago, but my current understanding is as above.

Here are just a few of thoughts that came to my mind after reading your post.

1. Not all condos allow farang ownership. The condo must be registered to allow farang ownership.

2. Although most condos that allow farangs to own units are restricted to allow farang to own only 49% of the livable space, there were some condos following the 1997 crash that were allowed to have a higher (100%?) ratio of farang ownership. Perhaps the Thai owner is referring to one of those condos which are no longer allowed this increased farang to Thai ownership level.

I'll let the experts chime in as most of my understanding of these laws come from my involvement in this forum.

[Khun Bob]

The condo management should be the best source for discovering the thai/non-thai ownership percentage - if you do buy the land office will want a report from them on this anyway...

It may well be that the guy selling knows that the percentage is at 49% or over. If your desperate for this, then you may be able to do a lease, as the condo would still be in a thai name - alternatively, I wonder if anyone has done a usufruct on a condo, as this has several advantages over a lease if you expect to live for 30 or more years !

I've never heard of any issues with respect to thai to non-thai and back to thai ownership on a condo - other than thais dont really like buying second hand condos (Good for non-thais really !)

HTH and let us know how it goes...

Khun Bob, I don't know where he got the info from, it was just a quick chat to him in passing and I mentioned if he's ever thinking of selling I want first refusal. He said he'd be tempted but I should be aware that I can't put it in a Farang name. To me that means a cheaper price can be offered rather than paying more to solve the 'problem'.

I'm going to check with the land office this week the Thai / Farang ownership percentage and if any units can be changed. I'm vaguely aware of something that says once the name has been changed from Farang to Thai that it can't be changed back again but I don't think he's refering to this, and I'm not completely sure it's correct anyway.

donx - the condo building is already registered to allow Farang ownership as many Farangs (including myself) already own there but you may be right that he may mean the 100% relaxation that was allowed and there's no changing anymore.

Going to get more info as Khun Bob suggests and then talk to him again.

[PattayaParent]

That was going to be my next question Khun Bob, can a usufruct be used for a condo?

I've read in another thread though that Pattaya Land Office are now no longer accepting usufruct agreements. The missus is going down to the land office Friday to check out the Thai / Farang ratio (the condo management told me they would know better) and I'll get her to ask about a usufruct now I know the Thai word for it.

I'll let you know what happens, otherwise it's going to have to be a lease or a new condo but we like where we are.

[donx]

Correct me if if I'm wrong - but as far as I am currently aware a non-thai can own units in **any** condo so long as the overall non-thai ownership is 49% or less.

I beleive that the laws were different a few years ago, but my current understanding is as above.

Here are just a few of thoughts that came to my mind after reading your post.

1. Not all condos allow farang ownership. The condo must be registered to allow farang ownership.

2. Although most condos that allow farangs to own units are restricted to allow farang to own only 49% of the livable space, there were some condos following the 1997 crash that were allowed to have a higher (100%?) ratio of farang ownership. Perhaps the Thai owner is referring to one of those condos which are no longer allowed this increased farang to Thai ownership level.

I'll let the experts chime in as most of my understanding of these laws come from my involvement in this forum.

I did read somewhere that the condominium needs to be registered to allow alien ownership. Perhaps this registration is nothing special and is just the standard registration of the complex to the land office and hence applies to all condo units like you say.

As for the over 49% ownership see the following link:

Condo Ownership

Here is the relevant section...

" 2.2 The ownership in condominium units by the alien and juristic person in 2.1 shall not be in a higher proportion than forty nine percent of the total space of all units in that condominium at the time of the application for condominium registration under section 6 with the exceptions that:

a. A condominium in which the condominium units are to be owned by the alien and/or the juristic person specified in 2.1 in a higher proportion than forty nine percent must be located in the area of Bangkok Metropolis, municipality or the City of Pattaya and the land on which the condominium is situated shall not, when combined with the land provided for common use or benefit of all co-owners, be more than five rai in area. Also, the condominium units in such condominium shall not be less than forty units and the condominium shall already be registered not less than one year prior to the date of application for the alien to own the condominium units in the proportion higher than forty nine percent, and such condominium shall not be situated in the area of military safety zone under the law on military safety zone.

b. It is provided in section 9 of the Condominium Act (No. 3), B.E.2542 that at the expiration of five years as from the date of the entry into force of the Condominium Act (No. 3), B.E. 2542 (28th April 1999) the provisions as set forth in a. shall be repealed and the alien or juristic person having obtained the condominium units under a. or the alien or juristic person specified in 2.1 to whom the condominium units are transferred from the aforesaid alien or juristic person may continue to have ownership in such condominium units although in the higher proportion than forty nine percent of the total space of all units in that condominium."

[Thaifan2]

I bought a Condo 4 years ago in Jomtien from a Thai ,and put it in my name ,and the Complex was already about 8 years old then .So that problem did not come up .

[Khun Bob]

I and I think many other people would be very interested to know more about this - particularly if someone has been through getting a building they wanted to buy a condo in registered, wat was involved, how they did it, what it cost and how long it took etc...

Very interesting topic !

I did read somewhere that the condominium needs to be registered to allow alien ownership. Perhaps this registration is nothing special and is just the standard registration of the complex to the land office and hence applies to all condo units like you say.

[PattayaParent]

b. It is provided in section 9 of the Condominium Act (No. 3), B.E.2542 that at the expiration of five years as from the date of the entry into force of the Condominium Act (No. 3), B.E. 2542 (28th April 1999) the provisions as set forth in a. shall be repealed and the alien or juristic person having obtained the condominium units under a. or the alien or juristic person specified in 2.1 to whom the condominium units are transferred from the aforesaid alien or juristic person may continue to have ownership in such condominium units although in the higher proportion than forty nine percent of the total space of all units in that condominium."

Maybe it's the 5 years in this article that the owner was meanng when he told me it couldn't be changed from a Thai to a Farang name.

[pkrv]

Indeed a very interesting topic, and I had not seen the Condo Ownership (dated 2002) link before - interesting. Unfortunatly it did fall into the trap of confusing land ownership and condo ownership dispite the title - IMO it would have been much clearer (and easier to digest) if it stuck to its subject matter title, things got muddy.

Googling

'The Condominium Act B.E 2522 (1979)' with obviously ammendments.

(this is just one of the many links thrown up)

http://www.dol.go.th/low_ministry/commandm...do_no3_2542.htm

Should also help - there is a lot of material on the subject - but this (5 year issue?) is a first for me! Please if you come up with an answer do post for us

Edited November 8, 2007 by pkrv

[pkrv]

Looking through the Condo Ownership link (which is quite old) I came across this comment which implies (to me) that it is possible to exceed the 49% forign ownership quota in Bangkok and Pattaya - Have I interpreted this correctly? To be honest I have never seen an upto date 'clean copy' of the condominium act - has anyone got a link for this type of material?

2.2 The ownership in condominium units by the alien and juristic person in 2.1 shall not be in a higher proportion than forty nine percent of the total space of all units in that condominium at the time of the application for condominium registration under section 6 with the exceptions that:

a. A condominium in which the condominium units are to be owned by the alien and/or the juristic person specified in 2.1 in a higher proportion than forty nine percent must be located in the area of Bangkok Metropolis, municipality or the City of Pattaya and the land on which the condominium is situated shall not, when combined with the land provided for common use or benefit of all co-owners, be more than five rai in area. Also, the condominium units in such condominium shall not be less than forty units and the condominium shall already be registered not less than one year prior to the date of application for the alien to own the condominium units in the proportion higher than forty nine percent, and such condominium shall not be situated in the area of military safety zone under the law on military safety zone.

Edited November 8, 2007 by pkrv

[donx]

Looking through the Condo Ownership link (which is quite old) I came across this comment which implies (to me) that it is possible to exceed the 49% forign ownership quota in Bangkok and Pattaya - Have I interpreted this correctly? To be honest I have never seen an upto date 'clean copy' of the condominium act - has anyone got a link for this type of material?

2.2 The ownership in condominium units by the alien and juristic person in 2.1 shall not be in a higher proportion than forty nine percent of the total space of all units in that condominium at the time of the application for condominium registration under section 6 with the exceptions that:

a. A condominium in which the condominium units are to be owned by the alien and/or the juristic person specified in 2.1 in a higher proportion than forty nine percent must be located in the area of Bangkok Metropolis, municipality or the City of Pattaya and the land on which the condominium is situated shall not, when combined with the land provided for common use or benefit of all co-owners, be more than five rai in area. Also, the condominium units in such condominium shall not be less than forty units and the condominium shall already be registered not less than one year prior to the date of application for the alien to own the condominium units in the proportion higher than forty nine percent, and such condominium shall not be situated in the area of military safety zone under the law on military safety zone.

I've been referring to this in other threads throughout this forum. This was a temporary law enacted to counter the effects of the crash of 1997. It was implemented in 1999 and has since expired as of 2004. Nonetheless there may be some condo projects that are in Bangkok or Pattaya where the ownership ratio of foreigners is greater than 49%. From this article it seems to me that if such a condo is sold by a foreigner, the buyer can be another foreigner. However if a condo in the same project is sold by a Thai, a foreigner will not be allowed to by it.

[donx]

b. It is provided in section 9 of the Condominium Act (No. 3), B.E.2542 that at the expiration of five years as from the date of the entry into force of the Condominium Act (No. 3), B.E. 2542 (28th April 1999) the provisions as set forth in a. shall be repealed and the alien or juristic person having obtained the condominium units under a. or the alien or juristic person specified in 2.1 to whom the condominium units are transferred from the aforesaid alien or juristic person may continue to have ownership in such condominium units although in the higher proportion than forty nine percent of the total space of all units in that condominium."

Maybe it's the 5 years in this article that the owner was meanng when he told me it couldn't be changed from a Thai to a Farang name.

Yes. This is my point precisely.

[pkrv]

Looking through the Condo Ownership link (which is quite old) I came across this comment which implies (to me) that it is possible to exceed the 49% forign ownership quota in Bangkok and Pattaya - Have I interpreted this correctly? To be honest I have never seen an upto date 'clean copy' of the condominium act - has anyone got a link for this type of material?

2.2 The ownership in condominium units by the alien and juristic person in 2.1 shall not be in a higher proportion than forty nine percent of the total space of all units in that condominium at the time of the application for condominium registration under section 6 with the exceptions that:

a. A condominium in which the condominium units are to be owned by the alien and/or the juristic person specified in 2.1 in a higher proportion than forty nine percent must be located in the area of Bangkok Metropolis, municipality or the City of Pattaya and the land on which the condominium is situated shall not, when combined with the land provided for common use or benefit of all co-owners, be more than five rai in area. Also, the condominium units in such condominium shall not be less than forty units and the condominium shall already be registered not less than one year prior to the date of application for the alien to own the condominium units in the proportion higher than forty nine percent, and such condominium shall not be situated in the area of military safety zone under the law on military safety zone.

I've been referring to this in other threads throughout this forum. This was a temporary law enacted to counter the effects of the crash of 1997. It was implemented in 1999 and has since expired as of 2004. Nonetheless there may be some condo projects that are in Bangkok or Pattaya where the ownership ratio of foreigners is greater than 49%. From this article it seems to me that if such a condo is sold by a foreigner, the buyer can be another foreigner. However if a condo in the same project is sold by a Thai, a foreigner will not be allowed to by it.

Donx - I have seen you working on this issue thanks for the update - I will try to find a final 'consolidated version of the condominium act' but have a lot on my mind at this time.

Edited November 8, 2007 by pkrv

[Khun Bob]

Some good replies here - will be good to see a conclusion too...

[PattayaParent]

Well the missus has just gotten back from the Land Office and they said that the building is fully allocated Thai / Farang and has been 'stamped' so the title cannot be changed from Thai to Farang.

On the question of the usufruct I read in the post from Crewcut that it's called a sit-ti-gep-gin in Thai and when the missus asked about that the Land Officer replied that yes they can be used for land and for condos and can be registered for 30 years.

So either Crewcut has got a lease on his land rather than a usufruct, or the Land Officer just didn't listen to / understand the question was about a usufruct and assumed it was about a lease.

So we're still no clearer unless there's a legal bod out there that can answer it for us?

[pkrv]

As promised - This is all I have come up with on the Condominium Act

Original version (translated):

http://www.samuiforsale.com/Condominium_Act_BE2522.htm

Which appears to have been modified once only in 1999, but I can't be sure.

http://www.dol.go.th/low_ministry/commandm...do_no3_2542.htm

Thats all I have.

However if these links can be verified I think they should sort of be pinned. The Condominium Act is a big part of what we are doing on this thread.

Edited November 9, 2007 by pkrv

[Khun Bob]

So if you take the information provided as accurate - sounds like there is at least 49% foreign ownership. May be worthwhile considering how to get the condo management to double check their data, and to see if there are any grey areas - it may be easier for them to say no than to do a bit of investigation that could be positive for you - why not offer to do it for them ?

And if the land office are talking 30 years then that would be a lease. As far as I am aware a usufruct is for the life of the user and can be made longer by the user issuing a 30 year lease, which will still be honored after the user death. Further, it may be possible for a usufruct to be transferred and the usufruct may continue for the life of the new user. I'm not so clear on this one.

If you expect to live for less then 30 years a lease may be an option, but it is more complicated and costly then owing a condo outright.

It may be worthwhile, discovering what actually constitutes 49% of the building you have in mind and if you dont get joy with the condo management, perhaps having a consultnat from the land office or some legal representative have a look over matters. Possibly by even suggesting that you are considering doing this, the condo management may find some different numbers. But bear in mind, that a change in the management team or investigation by the land office may mean your title decarled invalid at a later date. I have no experience or knowledge of this. How much do you want to live in that particular condo ?

HTH

Well the missus has just gotten back from the Land Office and they said that the building is fully allocated Thai / Farang and has been 'stamped' so the title cannot be changed from Thai to Farang.

On the question of the usufruct I read in the post from Crewcut that it's called a sit-ti-gep-gin in Thai and when the missus asked about that the Land Officer replied that yes they can be used for land and for condos and can be registered for 30 years.

So either Crewcut has got a lease on his land rather than a usufruct, or the Land Officer just didn't listen to / understand the question was about a usufruct and assumed it was about a lease.

So we're still no clearer unless there's a legal bod out there that can answer it for us?

[PattayaParent]

I actually already live in it Khun Bob, and we like it there so that's why I'm considering buying the place next door to extend ours into a 3 bedroom unit.

I'll likely live for less than 30 years but would want to pass the condo on to my kid so am thinking of buying it but in a Thai friends name and seeing what I can tie up legally to protect the place for the future.

Any suggestions?

[pkrv]

I actually already live in it Khun Bob, and we like it there so that's why I'm considering buying the place next door to extend ours into a 3 bedroom unit.

I'll likely live for less than 30 years but would want to pass the condo on to my kid so am thinking of buying it but in a Thai friends name and seeing what I can tie up legally to protect the place for the future.

Any suggestions?

If it was me I would buy a condominium under the 49% rule and leave a will.

[PattayaParent]

If it was me I would buy a condominium under the 49% rule and leave a will.

But the building in question is already full of the 49% Farang allocation so it'll have to be in a Thai name.

Am always looking at new developments but they come with some silly price tags (Baht 80k/m2 PLUS) or are too small, or are a badly designed layout, or don't have the great view that I already have.

Whereas if I can get the place next door for a reasonable price I'll have a pretty good spacious place.

Edited November 14, 2007 by PattayaParent

[pkrv]

If it was me I would buy a condominium under the 49% rule and leave a will.

But the building in question is already full of the 49% Farang allocation so it'll have to be in a Thai name.

Am always looking at new developments but they come with some silly price tags (Baht 80k/m2 PLUS) or are too small, or are a badly designed layout, or don't have the great view that I already have.

Whereas if I can get the place next door for a reasonable price I'll have a pretty good spacious place.

Sorry this issue is outside of my understanding -

[Khun Bob]

Sorry - im no expert either, but a usufruct would seem to be the best ption, unless your child can own it outright...

[FBN]

Question: If a condo in a building is registered in a foreign name and sold to Thai (assuming that change to Thai registration would follow), would that "allocation" in terms of the 49% rule become available to register another condo in a Thai name to a foreigner? (also assuming that the actual floor space is the same)

If so, how would one go about getting that information?

This is in a building where the full 49% of foreign registration is already done. (View Talay in Pattaya)

I bought a condo here on contract from the developer and now have to take ownership. At the time of the purchase, there was still foreign ownership possible. At this time not and I have to register in a Thai name but would like to change if that opportunity arises.

Appreciate any suggestions..

[bangkapiboy]

Foreign percent opening up in condos once it fills up is extremely rare, however it can happen.

[stateman]

would want to pass the condo on to my kid so am thinking of buying it but in a Thai friends name ..

Any suggestions?

My strong suggestion - don't do it!

It is human nature that once the right is under his name, it can be hard to get back.

As this is in Thailand, might as well know this Thai proverb: "sugarcane in an elephant's mouth". It means once the sugarcane is in its mouth, it is really hard to get it back.

My parent's personal friend did that once, transferring their property into a Thai's name. This was a Thai whom this friend had been helping financially for years. When the friend's own kids grew up, they naturally wanted it back. It was like attempting to get the cane out of the elephant's mouth! Finally they had to pay a ransom to the Thai.

I don't care who this person you have in mind is. Do your kid a favor. Find another avenue.

[PattayaParent]

Question: If a condo in a building is registered in a foreign name and sold to Thai (assuming that change to Thai registration would follow), would that "allocation" in terms of the 49% rule become available to register another condo in a Thai name to a foreigner? (also assuming that the actual floor space is the same)

If so, how would one go about getting that information?

This is in a building where the full 49% of foreign registration is already done. (View Talay in Pattaya)

I bought a condo here on contract from the developer and now have to take ownership. At the time of the purchase, there was still foreign ownership possible. At this time not and I have to register in a Thai name but would like to change if that opportunity arises.

Appreciate any suggestions..

This seems to be a case of the developer stitching you up. He's oversold the allocation of 49% to Farangs and now you're stuck with not being able to register it in your own name or having to put it in a company or Thai name and he washes hios hands of the problem.

I'd see a lawyer about what you can do to recover your money and damages from the developer as they sell the units to Thais at a cheaper price than to Farrangs anyway.