Bank says chanote land is not normal type of chanote, might not give loan

[gavin310]

My wife and I are applying for a loan to buy land and build a house. After months of getting everything in order, we're nearly approved. Today the bank sent their people out to survey the land to finalize everything. What they said is even though this land is chanote, it's not a normal chanote and is not as safe as "normal" chanote land. Apparently the land used to be Nor Sor 3 Gor, but a new law allowed the land to be changed to chanote, which the owner did. They said it's not as safe as normal chanote because if a new politician comes into office, they could change this law and revoke the chanotes. I've always been under the impression that all chanote land is as safe as you can get, so this is obviously surprising to me. I made them confirm many times that this land is in fact chanote (Nor Sor 4 Jor), and they confirmed it is indeed chanote land and you own full rights to the land, but it's not 100% sure that won't change later. The lady at the bank helping us with this process said their people are researching the chanote further and will let us know, but that it's basically 50/50 if they'll give the loan for this land or not at this point.

 

Does anyone know what they're talking about and could explain it better to me? And has anyone gotten a loan for this type of land before? At this point I'm not even sure if we want to pursue this land if what they're saying is true.

[LennyW]

Sounds like the bank has no clue, maybe explain this to them...

https://www.siam-legal.com/realestate/thailand-title-deeds.php

[alacrity]

Get a copy of the chanote (both sides) and take it to the Local Land Office. They will apprise you of the standing of your Chanote. Go alone (only with your wife) and be wary of calls to the 'owner'. If you are able to find a 'trustworthy' lawyer, then they should accompany you. 

 

A trustworthy individual is difficult to find. So your best option is probably going to be a representative from the bank. As they have a vested interest in the transaction.

 

Personally, I/we only commit to contracts of significance subject to the approval our 'Lawyer Daggett'. Could well have walked away from some lucrative opportunities. Yet due diligence has grossly minimized our losses. Given 20/20 hindsight.

[impulse]

On 10/7/2020 at 3:23 AM, LennyW said:

Sounds like the bank has no clue, maybe explain this to them...

https://www.siam-legal.com/realestate/thailand-title-deeds.php

 

If I were betting between a bank's legal department and something I can pull up on the interweb, I'd count on the bank to know more.  Not just what's in black and white (and in Thai, no less), but what's happened in the past in similar cases.

 

Edit:  For example:  The request formally asked the DSI to accept the case as a special case and to prosecute relevant officers who issued unlawful ownership documents for breaches of the Forest Act, B.E. 2484 (1941) and the Land Title Deed Issuance Act (No. 6), B.E. 2479 (1936)

 

 

Edited October 8, 2020 by impulse

[thedemon]

Nor Sor Sam Gor is normally a bankable title though a bank may only be prepared to lend a lower percentage of the appraised value than if it was full Chanote even though the difference between the two is more or less a formality.

 

Are you sure the land wasn't previously a lower title (e.g. Sor Kor Neung) that was then upgraded to N.S.3 prior to Chanote? That might explain the suggestion of political influence being involved in the upgrade.

[LennyW]

8 hours ago, impulse said:

 

If I were betting between a bank's legal department and something I can pull up on the interweb, I'd count on the bank to know more.  Not just what's in black and white (and in Thai, no less), but what's happened in the past in similar cases.

 

Edit:  For example:  The request formally asked the DSI to accept the case as a special case and to prosecute relevant officers who issued unlawful ownership documents for breaches of the Forest Act, B.E. 2484 (1941) and the Land Title Deed Issuance Act (No. 6), B.E. 2479 (1936)

 

 

Really? and you quote a land encroachment case as an example, how is that a similar case, not even close? 

Edited October 8, 2020 by LennyW

[impulse]

15 minutes ago, LennyW said:

Really? and you quote a land encroachment case as an example, how is that a similar case, not even close? 

 

The issue at the bank is the possibility that the land documents won't stand up to scrutiny.  Kind of like the land documents in the linked story.

 

Do you really think you know more about Thai real estate law than the bank's legal team, based on downloading some marketing stuff off a law firm's website?  Good luck with that.

 

Edit:  Personally, I think the bank is doing the OP a big favor by pointing out the pitfalls before he gets invested too deep.  Maybe they'll come back with a "yes" after further research.  Maybe they'll come back with a "no".  If they do come back with a "no", I'd walk away.

 

Edited October 8, 2020 by impulse

[LennyW]

46 minutes ago, impulse said:

 

The issue at the bank is the possibility that the land documents won't stand up to scrutiny.  Kind of like the land documents in the linked story.

 

Do you really think you know more about Thai real estate law than the bank's legal team, based on downloading some marketing stuff off a law firm's website?  Good luck with that.

 

Edit:  Personally, I think the bank is doing the OP a big favor by pointing out the pitfalls before he gets invested too deep.  Maybe they'll come back with a "yes" after further research.  Maybe they'll come back with a "no".  If they do come back with a "no", I'd walk away.

 

What i quoted is one example of the actual law regarding the upgrading of the Nor Sor 3 Gor land titles, not an internet hoax,scam, my belief, whatever - the actual law regarding these titles. This has been an ongoing upgrade for many years and will continue until all NS3G titles have been upgraded to full Chanote, i just could not understand the OP saying that the bank said it was not a normal title - it is, it seems their ignorance of the legalities was a bit off.

By all means Due diligence should always be carried out prior to purchase.

[Mattd]

From the article @LennyW posted, then I can see what the bank is concerned about.

Quote

• This type of land may be sold, transferred, or mortgaged in the same manner as land with freehold title deed (Chanote) as long as it is ready to be a full title deed.
• In order to change the title to a Chanote, the owner of the land may file a petition to the Land Department to file a request to change it to a full title deed (Chanote), and the Land Department may do so if there is no opposition made against the petition.

The question the bank wants answering is likely to be is the land ready to be a full title deed and if so, why hasn't the current owner filed a request to the Land Department to change it to Chanote and would there be any objections if so?

[Crossy]

An off-topic post (rent, don't buy) has been removed.

[LennyW]

14 minutes ago, Mattd said:

From the article @LennyW posted, then I can see what the bank is concerned about.

The question the bank wants answering is likely to be is the land ready to be a full title deed and if so, why hasn't the current owner filed a request to the Land Department to change it to Chanote and would there be any objections if so?

From the original post... "Apparently the land used to be Nor Sor 3 Gor, but a new law allowed the land to be changed to chanote, which the owner did." Thats why i was confused at the banks confusion.

[KarenBravo]

Just out of curiosity; what is the colour of the Garuda on the land paper?

Chanote is a red Garuda.

[Mattd]

47 minutes ago, LennyW said:

From the original post... "Apparently the land used to be Nor Sor 3 Gor, but a new law allowed the land to be changed to chanote, which the owner did." Thats why i was confused at the banks confusion.

True, my bad, unless there is a period after that objections can be raised.

I doubt any government will reverse those already made in to a Chanote, the legal challenges and unpopularity would be huge.

[lensta]

 

1 hour ago, Mattd said:

From the article @LennyW posted, then I can see what the bank is concerned about.

The question the bank wants answering is likely to be is the land ready to be a full title deed and if so, why hasn't the current owner filed a request to the Land Department to change it to Chanote and would there be any objections if so?

 I made them confirm many times that this land is in fact chanote (Nor Sor 4 Jor), and they confirmed it is indeed chanote land and you own full rights to the land.

 

I would think that it is a full chanote title deed, but maybe my English isn't good.

[LennyW]

3 minutes ago, lensta said:

 

 I made them confirm many times that this land is in fact chanote (Nor Sor 4 Jor), and they confirmed it is indeed chanote land and you own full rights to the land.

 

I would think that it is a full chanote title deed, but maybe my English isn't good.

That is indeed full Chanote. 

[LivinLOS]

There is the issue of upgraded land titles.. I have heard them called 'red backed chanotes' but I looked at one and it wasnt red on the back, so go figure. 

 

Where I now live large parts of the village were upgraded to chanote about 8 - 10 years ago. These upgraded titles need to season for 10 years before they can change hands (unless via inheritance etc) which would make a bank repossession impossible or difficult. I also know many titles were then 'sold' via the phu yai baan system even to farangs, and the expectation was to have the transfer done after the 10 years (nominee / company). I was amazed to discover that when the 10 year clock ran out, locals who had taken 50 or 100k a rai on land 10 years ago, did in fact sign over thier legal ownership, to the farangs I knew, for no added money.. On land thats now 1.5 - even 3 mil a rai.. I personally did not think they would willingly walk away from a 10 to 15 mil windfall (it was a 5 plus rai plot I was aware of) without a big payday, yet they did. Our Phu Yai baan is decent and has a decent attitude to westerners I think which may have been part of the enforcement. 

Not saying this is directly applicable to yours, it reads like you do technically own it, all legally via the land office, and you did not do the upgrade, so doesnt exactly fit the scene I have witnessed as it has changed hands. 

[LukKrueng]

41 minutes ago, LivinLOS said:

There is the issue of upgraded land titles.. I have heard them called 'red backed chanotes' but I looked at one and it wasnt red on the back, so go figure. 

 

Where I now live large parts of the village were upgraded to chanote about 8 - 10 years ago. These upgraded titles need to season for 10 years before they can change hands (unless via inheritance etc) which would make a bank repossession impossible or difficult. I also know many titles were then 'sold' via the phu yai baan system even to farangs, and the expectation was to have the transfer done after the 10 years (nominee / company). I was amazed to discover that when the 10 year clock ran out, locals who had taken 50 or 100k a rai on land 10 years ago, did in fact sign over thier legal ownership, to the farangs I knew, for no added money.. On land thats now 1.5 - even 3 mil a rai.. I personally did not think they would willingly walk away from a 10 to 15 mil windfall (it was a 5 plus rai plot I was aware of) without a big payday, yet they did. Our Phu Yai baan is decent and has a decent attitude to westerners I think which may have been part of the enforcement. 

Not saying this is directly applicable to yours, it reads like you do technically own it, all legally via the land office, and you did not do the upgrade, so doesnt exactly fit the scene I have witnessed as it has changed hands. 

The red chanot is not red on the back. But as you described it - land that was upgraded to chanot has a red stamp next to the owner's name stating ownership can't be changed for x years (some places it's 5, others 10 years) from the date on the stamp. People still seek sell such plots but it can't be legally transferred to new owner's name. That's the only problem I can see in your case of the document is official and real. 

As was suggested earlier, you should go to the land office where you can see their copy of the chanot. You could also check the chanot markets on the land and see if they are correct and that the shape of the plot is as drawn on the chanot. Another thing you can do is ask the plot to be surveyed by the land department and then you know for sure the actual boundaries and location of the plot. Usually there is a que for survey, but you can pay for "private survey" and that can be done within few days

[mikesil]

In the US we always buy title insurance. Price is reasonable.  I have never seen mention of it here in LOS --- maybe that should tell us something.

[GreasyFingers]

On 10/7/2020 at 3:13 PM, gavin310 said:

Does anyone know what they're talking about and could explain it better to me? And has anyone gotten a loan for this type of land before? At this point I'm not even sure if we want to pursue this land if what they're saying is true.

OP, be very carefull and listen to the bank. We have thousands of properties up here where the chanote was obtained illegally. If it falls into the category that we have experienced the government can take it back at any time with no compensation. Have seen it many times and have friends who have been caught out by it.

[mrwebb8825]

On 10/9/2020 at 4:48 PM, LukKrueng said:

As was suggested earlier, you should go to the land office where you can see their copy of the chanot. You could also check the chanot markets on the land and see if they are correct and that the shape of the plot is as drawn on the chanot. Another thing you can do is ask the plot to be surveyed by the land department and then you know for sure the actual boundaries and location of the plot. Usually there is a que for survey, but you can pay for "private survey" and that can be done within few days

hence the queue for the normal survey's they're already paid to do as part of their job?

My wife could explain it better but, we bought a plot and built a house as part of a "village" and turned out the owner's survey team screwed up the plot markings which affected around 20 of us in that section. We were' the first ones in there beyond the framing stage so we got to be the lucky ones to have the Land office make the discovery. They got it all fixed so we didn't end up having to move the house 6" right or left but it delayed the build by 3-4 months.

With the OP's issue, I wonder if the bank lady was referring back to what taksin did for his wife as far as changing land laws around?

[gavin310]

Sorry for not providing an update on this. In case it could help anyone I wanted to follow up.

 

Basically, the bank had no idea what they were talking about. It turns out the chanote was fine, but they needed official copies of the actual chanote. I have no idea where they came up with the "chanote is not normal" stuff. They said they sent someone from the bank to the land office and they couldn't find the chanote, and they weren't going to give us the loan because of this. After months and months of trying to make this happen and all the effort we put into it, we were pretty heartbroken. We had basically given up hope, but a week or so later we had to go to the immigration office and since the land office was nearby we decided to stop by to see if we could get more information before we totally called it quits. The people there were super helpful. They got the boss of the land office to work with us. He said the people from the bank are idiots and they never even went there. He got someone to go look for the chanote and after a while they came back with this ancient looking chanote. It was well over 100 years old if I remember correctly and everything was fine with it. We made official copies, sent them to the bank, and got approved. The next time we were at the land office we were signing papers and handing over cash. Now we have a beautiful home on the land and all is well.

 

So, you shouldn't always take the bank's word on things. I'm sure they're right the majority of the time, but in our case it was just a whole lot of misinformation and incompetence.

[Crossy]

1 hour ago, gavin310 said:

... it was just a whole lot of misinformation and incompetence.

 

I'm afraid that this is Thai banks all too often, no idea what they are looking at so it's filed as "too hard, go away!"

 

Great that you got it sorted and thanks for the update.

 

[triplez]

great to hear that this story had a happy ending. 
I would like to ask a related question: Is it advisable to buy NS3G land in the hopes of upgrading it later to chanote and building a house, or is that risky business? 
If I want to build a house, should I restrict my search purely to chanote land to be on the safe side? 

[IvorBiggun2]

All depends on your finances. Sometimes Chanote titled land is too expensive whereas Sor Por Kor is relatively cheaper but not as secure. You pay's yer money, you takes your chance. I bought 1 &1/4 Rai Chanote land 19 years ago for 400,000 Baht. I'd hate to think how much it would fetch now.