It seems commonplace for people here to borrow money using land deeds as collateral. These loans are with banks and private individuals(loan sharks). Usually these debts are listed on the deed at the land office and are taken care of at closing. What happens with debt or loans which are not listed on the deed or with the land office but valid in the sense that the owner of the land promised to repay when the land was sold. Do these claims have any legal validity and, as a buyer, is there any protection against any claims that might arise after the sale where the land was used by the seller as collateral but not registered on the deed. In the US we have title insurance. Is there anything like that here. Should you have a seperate contract at closing where the seller will sign off that he has no undisclosed debt related to the land. Is this enough. Any input will be greatly appreciated.

thanks

I do know that a title insurance firm was actively trying to bring this service into Thailand, but found the going very tough. (The MD has since moved on to greener pastures anyway) so I am not sure if that still has legs.

As for limiting/defining liability in a transaction, the overriding rule is that buyers must protect themselves, Caveat Emptor Extremis. Undertaking thorough due diligence investigations is the only way avenue available to you to protect your interests. A side contract will do you any harm. But its far better to do your homework first and walk on a deal, rather than pay an insurance firm a premium to do your homework for you.

Im not quite sure how a creditor can use property as collateral unless the lien is actually recorded on the title at the land department. If a claim was raised I doubt (but do not know for certain) whether it would have any legal validity in Thailand.

Perhaps one of our resident lawyers can advise further?

PM me, and i will forward your details to a company that does title insurance in Thailand

tx

Boater why not post their name here for future reference?

If you can't for any reason please send details, thanks.

Thanks for the replies. I closed my land deal yesterday. My lawyer wrote up a seperate contract which the seller and all of his lenders signed. This document stated that he, nor anyone else, had no other debt except what was listed on the chanote paper. And if it turned out for some reason that he did, the land could not be used as collateral any more since the chanote was no longer his name(the land was sold). If someone does come along and try to claim the seller owed them money and signed off the land as collateral, well then we will have a signed document diverting all of the accountability to the seller. I have learned in Thailand that having a signed document protects you a lot. Simply because ultimately it will be the police who deal with a bad situation, and they understand alot better with something they can read. The land is indemnified, as well as we the buyers. I am not worried anymore, however the title insurance company info will be helpful in the future.

Thanks

Thanks for the replies. I closed my land deal yesterday. My lawyer wrote up a seperate contract which the seller and all of his lenders signed. This document stated that he, nor anyone else, had no other debt except what was listed on the chanote paper. And if it turned out for some reason that he did, the land could not be used as collateral any more since the chanote was no longer his name(the land was sold). If someone does come along and try to claim the seller owed them money and signed off the land as collateral, well then we will have a signed document diverting all of the accountability to the seller. I have learned in Thailand that having a signed document protects you a lot. Simply because ultimately it will be the police who deal with a bad situation, and they understand alot better with something they can read. The land is indemnified, as well as we the buyers. I am not worried anymore, however the title insurance company info will be helpful in the future.

Thanks

First American Title do offer the product but only at an institutional level - i.e. you can have it to cover an entire development but not a single unit.

Not aware of anyone else who does it. If you don't register a charge on a chanote then in the event of default you;d have to execute that security based on the loans documentation.

I suspect that many of the deals that are done using property as 'uncharged security' for personal loans are done on the basis of if you default, give me the land if you want to keep your knee-caps! In most cases reputable lenders are able to charge and protect their security although there will always be exceptions to that.