The prohibition on foreigners from owning Thailand real property has forced some to resort to unconventional means in order to circumvent this hurdle. One such common practice is making the Thai spouse of a foreigner purchase and title the land in the former’s name. This kind of ownership has led to the issuance of restrictions on how a Thai spouse may register immovable properties under their sole ownership. As more complications arise, there is an ever growing need to clarify and expound the different processes and requirements encountered in registering real property acquired during the marriage.
As a previous practice, Thai spouses married to foreigners were absolutely prohibited from owning any real property. However, with the passage of a previous regulatory letter made by the Interior Minister, this absolute prohibition was lifted and Thai spouses were allowed to own land subject to the requirement that the said land become the personal property of the said spouse. With this, the land is separated from the communal property of the spouses while the foreign spouse is prohibited from exercising joint control and ownership over the said property.
Before registering any property in the name of a Thai spouse, the Land Office requires that a Letter of Confirmation be first executed by both spouses declaring to the effect that the money used for the purchase of the property is money entirely owned by the Thai spouse. Without such a legal confirmation, the request for registration must be referred to the Land Department in order to obtain an approval from the Minister. The same procedure attains in cases where the property was acquired gratuitously either as a gift or donation.
This declaration made by both spouses is of critical importance due to two reasons: First, it vests any property purchased through the use of the money the character of being personal property. Second, being personal rather than communal property, the declaration serves as a waiver or quitclaim over the real property sought to be purchased.
This does not mean however, that the foreigner spouse could no longer participate in the management or enjoyment of the property. A Superficies right or a right of Usufruct may be constituted by the Thai spouse in favour of the foreigner over the land purchased. In either case, the interests of the foreigner spouse are secured as these rights entail registration. Furthermore, these rights are known exceptions to the provisions of the Civil and Commercial Code allowing the nullification of any agreement entered into between the spouses during the marriage.
Of recent development was the announcement made by the Director General of the Land Department reiterating the policy against using Thai nominees including the use of a legally married Thai spouse in order to purchase real property. According to the Director, any violation would lead to an investigation and subsequent revocation of any title deed issued contrary to the policy regarding ownership of lands by foreigners. Furthermore, it has been stated that loans granted to Thai spouses using money owned by the foreigner spouse would also amount to a circumvention of the prohibition.
In conclusion, the use of Thai spouses as title holders for their foreign spouses has come under greater control as more requirements and limitations have been set in place to ensure that this practice be abated. However, difficulties may still arise in terms of the proof and evidence needed to establish the origin of the money. Nonetheless, an understanding of the various options and consequences such a practice entails would prove to be of great benefit to the parties concerned.