About Mortgage Law in Chiang Mai, Thailand
Mortgage laws in Thailand, including Chiang Mai, are governed by the Civil and Commercial Code. In Thai law, a mortgage is recognized as a contract in which one person, the mortgagor, provides as security to a creditor, the mortgagee, for a principal obligation. Under the Land Code of Thailand, foreigners are restricted to purchase land; hence, they cannot traditionally hold a mortgage in their name. However, a foreigner can purchase a condominium if 51% of the building’s ownership is held by Thais and the foreigner has legally brought the money for the purchase into Thailand.
Why You May Need a Lawyer
Given the complexity and unique elements of Thai property law, including specific restrictions on foreign ownership, having a lawyer is crucial. You may need legal assistance when buying or selling properties and managing real estate transactions, to ensure regulatory compliance. A lawyer is also beneficial when structuring a mortgage that fits your situation, particularly for foreigners looking to find legal pathways to real estate ownership. Legal help is also essential to solve contractual disputes, if any, and to navigate the complexities of agreements, refinance options, and foreclosure prevention.
Local Laws Overview
Thai mortgage law dictates that the property subject to a mortgage must be a 'immovable property and it must be an assertainable property. The law prohibits a foreigner from owning land in Thailand, pushing most to form a company to buy property or opt for long term leasing. Certain property, such as condominiums, can be owned outright by foreigners as long as at least 51% of the building is owned by Thais. Furthermore, the law stipulates the maximum interest rates charged on mortgages and regulates procedures for foreclosure and sale in the event of default.
Frequently Asked Questions
1.
Can a foreigner obtain a mortgage in Thailand? - Foreigners can obtain a mortgage for condominiums if at least 51% of the building is Thai-owned. Getting a local bank mortgage can be challenging as many local banks do not offer mortgages to foreigners.
2.
What are the interest rates on mortgages in Thailand? - Interest rates vary by financial institution, but generally range between 6 - 8%.
3.
Are there any restrictions on paying off a mortgage early? - Some banks in Thailand may charge a penalty for early loan repayment. It is recommended to check the terms of your mortgage contract.
4.
What happens if I default on my mortgage payments? - If you’re unable to keep up with your repayments, the lender has the right to sell the property to recover the outstanding debt.
5.
Can I lease land in lieu of buying it? - Yes, long term leases are a popular choice for foreigners wishing to acquire land.
Additional Resources
The Department of Lands and Ministry of Interior are two key government bodies relevant to land and property law in Thailand. You can also refer to the Civil and Commercial Code of Thailand for detailed insights into mortgage law.
Next Steps
It is highly recommended to seek advice from a qualified Thai lawyer or a reputable real estate agency before undertaking any property or mortgage negotiations in Chiang Mai. This is particularly vital for foreigners given the complexity and specific restrictions concerning foreign property ownership in Thailand. Most reputable attorneys offer free initial consultation services, during which you can ask questions related to your situation and learn about possible courses of action.
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Disclaimer:
The information provided on this page is for general informational purposes only and does not constitute legal advice. While we strive to ensure the accuracy and relevance of the content, legal information may change over time, and interpretations of the law can vary. You should always consult with a qualified legal professional for advice specific to your situation.
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