Property Mortgages in Thailand. A mortgage (จำนอง) under Thai law is a contractual security interest, governed by the Civil and Commercial Code (CCC), Sections 702–756, and registered at the Department of Lands. The mortgage provides the creditor (mortgagee) with a right in rem over immovable property, enabling them to enforce the debt against the property independent of the debtor’s personal obligation. Mortgages are a critical feature of Thailand’s property financing and secured lending system.
This article provides a detailed examination of the legal nature, procedures, limitations, and enforcement of property mortgages in Thailand.
Section 702 of the CCC defines a mortgage as:
“A contract whereby a person, called the mortgagor, assigns to another person, called the mortgagee, a real right over immovable property or certain types of movable property, as security for the performance of an obligation, without delivering the property.”
Key characteristics:
The mortgage is a real right (right in rem) that follows the property, not merely a personal obligation.
It does not transfer possession or ownership of the property to the creditor.
The mortgage must be registered at the Land Office to be valid and enforceable.
Under Thai law, the following immovable properties may be mortgaged:
Land with valid title deed (Chanote, Nor Sor 3 Gor)
Buildings separate from land (if mortgagor owns building but not land)
Condominium units (with condominium title under the Condominium Act B.E. 2522)
Movable properties that can be mortgaged (with registration at the Department of Transport or Commerce):
Ships of five tons and above
Registered aircraft
Section 703 of the CCC stipulates:
“A mortgage is void unless made in writing and registered by the competent official at the place where the property is situated.”
Failure to register renders the mortgage unenforceable against third parties.
The mortgage contract must clearly specify:
Identity of mortgagor and mortgagee
Secured obligation (e.g., loan amount, debt description)
Detailed description of the property (parcel number, title deed number, location)
Maximum mortgage amount (for floating obligations)
Interest rate, if applicable
Application at Land Office: Both parties or authorized attorneys must appear at the local Land Office where the property is located.
Submission of documents:
Original title deed
Mortgage contract (in Thai; bilingual optional)
Identity documents (passport, Thai ID, company registration documents, power of attorney if applicable)
Official assessment: Land officer will verify legal status of property and parties' capacity.
Payment of fees:
Registration fee: 1% of mortgage amount (capped at THB 200,000)
Stamp duty: 0.5% of mortgage amount
Endorsement: The mortgage is recorded on the back of the title deed (Chanote) and in the Land Office register.
Foreigners face important restrictions:
Foreign individuals cannot mortgage land they do not own, as foreigners generally cannot own land under the Land Code B.E. 2497.
Foreigners may mortgage condominium units or buildings they own (where permitted under the Condominium Act).
Foreign lenders may act as mortgagees only if permitted under Thai law (e.g., licensed financial institutions, entities with BOI promotion).
Additionally, Thai financial institutions providing loans secured by mortgage may impose conditions such as foreign exchange compliance for cross-border transactions.
Mortgage rights are ranked by order of registration.
A subsequent mortgagee may enforce only after satisfaction of the prior mortgagee’s claim.
Other registered encumbrances (e.g., usufruct, servitude) may affect the value or usability of the mortgaged property.
Mortgages remain attached to the property even if ownership changes, unless the mortgage is released or the debt satisfied.
To preserve the property in a condition suitable as security (Section 711 CCC).
Not to perform acts that reduce the mortgagee’s security without consent (e.g., demolition of buildings).
To proceed against the mortgaged property by court action in case of debtor’s default.
To demand auction of the property to satisfy the debt.
Mortgagees do not have self-help rights; foreclosure requires judicial proceedings.
When a mortgagor defaults:
The mortgagee files a lawsuit in the court with jurisdiction over the location of the property.
The court orders the sale of the property by public auction (Section 728 CCC).
The debtor retains the right to redeem the property up to the point of sale.
Section 725 CCC provides:
“Any agreement made at the time of mortgage or thereafter, purporting to allow the mortgagee to appropriate the mortgaged property in satisfaction of the debt, is void.”
This reflects Thailand’s prohibition on pactum commissorium—the mortgagee cannot acquire title simply by virtue of default.
A mortgage is extinguished by:
Full repayment of the secured debt
Agreement of parties with formal release registered at the Land Office
Sale of the property by auction (unless the debt remains unsatisfied)
Voluntary surrender and cancellation
The mortgage is not automatically extinguished by prescription unless the underlying obligation prescribes and no action has been taken for enforcement within the limitation period.
Boundary and title disputes: A mortgagee’s security interest is only as good as the mortgagor’s title. Due diligence is essential.
Overlapping encumbrances: Careful review of prior mortgages, servitudes, or leases is necessary.
Property condition: Physical deterioration or destruction of the property may impair security.
Bankruptcy of debtor: Mortgages provide secured creditor status in liquidation proceedings under the Bankruptcy Act B.E. 2483.
Property mortgages in Thailand provide a robust legal mechanism for securing debts against immovable property, subject to mandatory registration and compliance with statutory formalities. While they offer significant protection to lenders, they require careful structuring, precise documentation, and vigilant enforcement in the event of default.
Practitioners advising on property mortgages in Thailand should ensure:
Full due diligence on property title and encumbrances
Proper drafting and bilingual documentation
Compliance with foreign ownership and lending restrictions
Clear understanding of judicial enforcement procedures