You might have heard something like the following all-too-common assertion: “In Thailand the party named in a building permit is considered to be the owner of that building.” This may be particularly disturbing to foreigners who are legally allowed to own buildings in Thailand. Some may wonder: is the contractor who applied for the building permit and built the house “legally considered” to be its owner? But is this assertion accurate? For the statement to be correct, there would need to be a legal basis for a building permit to create ownership rights in a building. We begin by investigating the legal nature of a building permit.
The issuance of a building permit is legally an “administrative order.” An administrative order is defined as an exercise of powers under the law by competent officers, with an effect of creating legal relations between persons in such a way as to create, change, transfer, reserve, suspend, or otherwise affect the status of a person’s rights or duties — whether permanent or temporary — such as ordering, permission, approval, decision on appeal, certification, and acceptance of registration, but excluding the issuance of rules.[1]
The relevant law for the issuance of a building permit is the Building Control Act (“BCA”). What power does the competent officer exercise under the BCA in issuing a building permit, and to what effect? The applicant submits the application documents to the local administrative office. After a site visit, verification of the application documents (e.g., construction drawings and specifications), and a review of whether the contemplated structure is legally permissible, the local administrative office must either issue the building permit or deny it in writing with reasons, within forty-five days of the application.[2] The legal effect of this administrative order is simply legal permission for a person to build a certain structure on a defined plot of land — and that is all it is.
So what law actually creates ownership rights? More specifically, how does one legally own a building? Ownership rights are created through the Civil and Commercial Code (“CCC”). Sections 137ff and 1308ff of the CCC describe what ownership rights exist and how they are acquired. For immovable property, Section 139 CCC defines it as “land and things fixed permanently to land or forming a body therewith” (i.e., including buildings). The CCC therefore provides that a landowner automatically becomes the owner of any structure permanently affixed to their land. However, it is also legally possible to own a structure on someone else’s land — preferably accomplished through registration of a “superficies,”[3] the legal right of ownership of a structure on land owned by another person, and the instrument the Code intends for creating such a right.
Note that although property ownership is detailed in the CCC, the building permit is not mentioned there at all. As a practical matter, it is recommended to have the building permit issued in one’s own name, since the Land Department currently refuses to register certain rights if the applicant’s name does not appear on the building permit. In our view, this is a historical accident[4] that has developed into administrative practice — a practical reality for the time being, but one without any legal foundation. A building owner who has established legal ownership through construction on land under a superficies arrangement should not be concerned if another person’s name appears on the building permit; that person cannot establish ownership rights through the permit alone. Even if current Land Department practice creates an obstacle for a future sale or lease registration, the courts will follow the CCC and decide ownership independently of the building permit.
So what does a building permit have to do with legal ownership of a building? Nothing — and to think otherwise is a fundamental misunderstanding of the law.
Footnotes:
[1] Section 5(1) of the Administrative Procedures Act B.E. 2539 (1996).
[2] The BCA also allows the local administrative office to extend the forty-five-day deadline for up to two additional forty-five-day periods for reasonable cause, provided the applicant is notified in writing of the cause for the extension(s).
[3] See Section 1410 ff.
[4] The Land Department’s confusion may also stem from unfortunate wording on the building permit form itself, which labels the applicant as “the owner” of the building. The BCA itself never uses this term, referring instead only to the “permit grantee.”