Ownership of a condominium by a stranger
THAILAND, March 7, 2022 /EINPresswire.com/ — Foreigner Condominium Ownership
Overview of condominiums in Thailand
Full ownership or lease?
Foreigners, or non-Thai nationals, can only legally own 49% of the total salable area of condominium units in a project.
Let’s take the example of a project of 100 dwellings, all the dwellings having exactly the same size. With 100 units for sale, all of the same size, only 49 of a project’s total units can be owned by non-Thai nationals.
The title deeds of these 49 units are called Foreign Freehold or Foreign Quota.
If 49% of the condominium units have been sold to foreigners, that leaves the remaining 51 units in the project for sale. Freehold rights to these units are reserved for Thai nationals and are commonly referred to as the Thai quota.
The Thai quota may exceed more than 51% of the total salable area ownership of the buildings, but according to the condominium law, foreign quota ownership cannot exceed 49%, or in this example 49 units in a building of 100 units.
Most condominiums have units of different sizes, such as studios, one bedroom and two bedrooms, therefore the foreign quota in a building would not always be exactly 49% of the units in the condominium, but 49% of the salable surface of the co-ownership.
Foreign freehold is generally the preferred structure for purchasing a condominium, but there are good options available such as protected leasehold ownership.
In some of the popular holiday destination markets frequented by foreigners looking to invest in real estate in Thailand, it is common for all foreign quota properties to be filled (49%). Due to this high demand from non-Thai nationals in these markets, the developer may offer units outside the foreign quota on a lease sale.
Under Thai law, a 30-year lease period is legally protected and ownership cannot be interrupted. A protected 30-30-30 lease is common for developers. This option provides two additional terms of 30 years contractually resulting in a total of 90 years.
These leasehold properties should be considered on a case-by-case basis considering the security of purchase. It is important to receive a copy of the rental agreement before buying a leasehold property and to have more clarity on these three points.
#1 – Who is the lessor? Is it an individual or a Thai company? Getting a lease from a Thai company offers much more security than a private one.
#2 – Do I have the right to vote as a tenant? Some rental agreements do not allow the tenant to have voting rights in the maintenance and management of the property, even if you will pay the CAM or the maintenance of the common areas.
#3 – Is there a succession clause in the lease agreement that will allow the succession of the lease?
Your Siam Real Estate sales advisor will help you find the answers to these three questions to ensure your long-term rental property protection.
Co-ownership – Resale / Secondary market
Co-ownership on the secondary market – How do I know if the foreign quota is available?
A condominium project has what is called a legal entity or a team. A Legal Person can be an individual or a group of people, for example a management company. This person or team facilitates the tracking of overall Thai and foreign ownership quotas in a building or project. One of their tasks is to ensure that foreign ownership does not exceed 49%.
In a resale situation, titles are exchanged from owner to owner depending on the nationality of the buyer and the seller. For example, if a Thai national purchased a property held within the foreign quota, once the sale is complete, the property is now considered Thai quota. The original foreign quota on the sales unit is registered with the legal entity, and then it becomes available for future buyers.
When considering buying a resale condominium, ask yourself these questions:
#1 – Who is the current owner of the unit? Full ownership, lease or Thai quota?
#2 – If the property is held within Thai quota or lease, is there foreign quota available?
#3 – If the foreign quota is full, ask your realtor what options are available to you to secure ownership of this unit.
Condominium property – Off plan
Buying from a Developer, these are the questions to ask yourself.
In holiday markets, such as Phuket or Samui, property sales are largely driven by international buyers. This means that the foreign quota is in high demand.
When buying an off-plan condo from a developer in these types of markets, it is common for the foreign quota (49%) to be obtained by international buyers who buy early in the off-plan development phase. . Developers will generally charge a premium for foreign quota titles which can range from 250,000 to 500,000 THB.
Because there is a high demand for non-Thai nationals in these markets, the developer may offer the rights to units outside the foreign quota on a lease basis.
In markets such as Bangkok, Pattaya or Chiang Mai, the foreign quota remains largely intact, with the majority of buyers being Thai nationals. It is important to ask yourself three questions when buying a condo, regardless of the market you are interested in.
#1 – Has the foreign quota been filled?
#2 – If the foreign quota is still available, are there any additional costs (excluding taxes and transfer fees) associated with transferring the title?
#3 – If the foreign quota is full, ask your real estate consultant what options are available to you to secure ownership of that particular property