The subdivision of Thai land
Procedures for the subdivision (split) of a Chanote
To divide a Chanote land title into several parcels (or to consolidate parcels of land into one) an application has to be filed with the local land office together with the original Chanote.
The application procedure consists of ten tasks to be carried out by the landowner, land officer, and land surveyor. The whole process typically takes a few weeks and up to some months. The process is precisely documented in the files of the land office and, therefore, a wrong procedure, any unusual short duration, and other formal or material mistakes are permanently provable.
Neighbors of the subdivided land have the right to file a lawsuit within ninety days. The 90-day-period starts with their formal notification by the land office.
License requirement for the sub-division (vulgo “Chanotization”) of land titles
Under the Subdivision Act, a subdivision license (aka. developer license) must be obtained before commencement of the subdivision of any parcel of land into ten or more parcels within any consecutive three year period, whether in a single phase or successive phases. The Subdivision Act took effect July 22, 2000. It applies to all types of developments, whether residential or commercial land or raw land.
If a land is separated into several pieces to be leased out to different lessees, no subdivision license is required, irrespectively how many lessees are involved.
The subdivision license must be applied from the Provincial Subdivision Committee (“PSC”). If the PSC fails to finish its review within 45 days or fails to issue a written decision, the application will be deemed automatically approved.
If the Provincial Committee rejects an application, an appeal is possible within 30 days to the Central Subdivision Committee (“CSC”) in Bangkok. The CSC must complete its review within 60 days or the subdivision application will be deemed automatically approved.
Within seven days following the final approval of an application, whether, by the PSC or CSC, the subdivision license must be issued to the applicant.
Documents to be submitted with a Subdivision License Application; Application Review Process.
If the Subdivision Act applies to a development, the following documents are required to be submitted together with the subdivision application:
- the Chanote title deed, or Nor. Sor. 3 or Nor. Sor. 3 Kor Possessory Rights Certificate representing the land to be subdivided,
- the consent of the mortgagee, if the land is subject to a mortgage,
- a site plan showing number and configuration of the parcels, together with the amount of the surface area of each parcel,
- a full set of detailed construction drawings showing the project’s relevant infrastructure and common area improvements as shown on a site plan together with a list of all items to be constructed, relevant details concerning the construction, an estimated construction budget and the projected deadline for the completion of all infrastructure,
- the projected maintenance plan for the public utilities to the project,
- the sales plan for the sale of the subdivided parcels and anticipated proceeds from the sale of each parcel,
- details concerning any existing third-party rights with respect to the land to be subdivided,
- a form of sales and purchase agreement,
- certain other documents.
The decision-making process
The PSC and CSC have wide discretion to reject or approve any subdivision application. Grounds for rejection include, among others, title problems relating to the development site, inadequate infrastructure, inadequate public utilities, an inadequate construction budget, potential violations of environmental law and improper or inadequate road access.
Legal consequences of an outlawed subdivision without a license
No person shall carry out land development unless upon permission. A violation is subject to imprisonment for a term not exceeding two years and to a fine from THB 40,000 to 100,000.
More important are the other consequences for the subdivision. Ask PUGNATORIUS for further advice on this important topic.
Pass-over rights of the locked-in landowner
Pass-over rights exist under Thai legislation irrespectively whether a subdivision license is required or not. As a rule, any landowner may pass over the surrounding land to reach a public way, if the land is so surrounded by other pieces of land that it has no access to the public ways.
The place and the manner of the passage must be chosen as to meet the needs of the person entitled to passage and at the same time to cause as little damage as possible to the surrounding land. The person entitled to passage may, if necessary, construct a road for passage.
The person entitled to passage must pay compensation for any damage suffered by the landowner on account of the passage being established. Such compensation, except for damages arising from the construction of a road, may be made by annual payments.
Where land has been so partitioned or partially transferred that a plot is left without access to a public way, the owner of such plot may claim right of way as mentioned above only over the land which has been so partitioned or partially transferred. In such case, no compensation needs to be paid.
Professional service offer from Bangkok
Assignments on real estate investments are one of the core business activities with a particular competence, long-standing experience, and unique market reputation of the law firm. PUGNATORIUS Ltd. typically provides these seven services:
- Investment structures for foreign property acquisitions
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Details are described at “Legal services and tax planning for real estate acquisitions and property developments.”