Understanding mortgages in Thailand is crucial for both mortgagors and mortgagees. A mortgage involves a mortgagor using their property as security for a debt without transferring the property to the mortgagee. This property must be registered with the relevant land office under Thai law and can include real estate—such as land and permanently attached structures—or movable properties like ships, motor vessels, engine rafts, and transportation animals.
Successful mortgage registration establishes the rights of both the mortgagor and mortgagee. The mortgagor retains ownership and continues to benefit from the property, while the mortgagee gains a priority right to debt repayment from the property over general creditors. This right remains with the property, regardless of ownership changes, ensuring the mortgagee's interest is protected.
However, mortgages come with nuances that require careful consideration. For example, if the property is auctioned to repay the debt and the proceeds are insufficient, the debtor is not responsible for the shortfall. Additionally, only the property specifically registered for the mortgage can be claimed, excluding any later-built structures not included in the registration.
Mortgagors must exercise due diligence when dealing with property owners. Verifying the existence and ownership of the mortgage property is essential to avoid legal complications. Even if a mortgage is made in good faith, the actual owner has the right to reclaim their property without compensating the mortgagee.
This guide underscores the importance of understanding the legal framework surrounding mortgages in Thailand. It ensures that both parties—mortgagors and mortgagees—are well-informed about their rights and responsibilities, thereby facilitating a secure and transparent mortgage process.