Recent media reports have cited certain development projects that are not progressing and are currently stalled, purportedly due to legal issues relating to their building permits. Although these projects have obtained a building permit for construction, they are still facing challenges. Why? To answer that, we must first understand the legal status of a building permit in Thailand.
The issuance of a building permit is legally an “administrative order.” Section 5(1) of the Administrative Procedures Act (1996) (“APA”) defines an administrative order as the exercise of powers under the law by competent officers, with the effect of creating legal relations between persons in a way that creates, changes, transfers, reserves, suspends, or otherwise affects a person’s rights or duties — whether permanently or temporarily — such as through ordering, permission, approval, an appeal decision, certification, or acceptance of registration, but excluding the issuance of rules.
The relevant law governing the issuance of a building permit is the Building Control Act (1979) (“BCA”). Anyone wishing to construct, modify, or move a structure requires permission to do so. The procedure works as follows: the applicant submits application documents to the local administrative office; the responsible officer schedules a site visit and verifies the application documents (such as construction drawings and specifications); and the officer then reviews whether the proposed structure is legally permissible. In certain areas of Thailand, such as Phuket, land use restrictions fall primarily under three laws: (1) the BCA; (2) the City Planning Act (1975); and (3) the National Environmental Control and Maintenance Act (1992).
If all application documents are in order and the building is legally permissible at the proposed location, the local administrative office must issue the building permit. If the documents are insufficient, the office will deny the permit and inform the applicant in writing of the reasons for non-issuance, within forty-five days of the application date. The legal effect of this administrative order is permission for a person to build a defined structure on a defined plot of land.
How, then, can someone who already holds a building permit be stopped from exercising their right under it? In short: they cannot — as long as the permit remains in effect. Section 42 of the APA states that an administrative order remains valid so long as it is not revoked or terminated by a time condition.
It’s worth noting that such a “time condition” does apply to building permits. The temporal validity of a building permit depends on the size of the building: one-year permits are issued for buildings under 10,000 square meters; two-year permits for buildings exceeding 10,000 but not exceeding 100,000 square meters; and three-year permits for buildings exceeding 100,000 square meters. These permits are renewable up to four times — the first renewal for the same period as the original term, and the second, third, and fourth renewals for one year each. A lesser-known requirement is that the applicant has a duty to report construction progress and invite an official to inspect the site every ninety days.
Can a building permit be revoked after issuance but before expiration? Yes. Legally, a building permit is merely an administrative order, and administrative orders can be revoked either through an appeal or by action of the relevant government administration itself. An appeal can be initiated by “a party” — and that party need not be the permit holder. It can be any third party affected by the order, such as a neighbor adjacent to a development project that received the permit. If the reviewing officer agrees there is a problem with the facts, the law, or the order’s suitability, they may revoke or amend it.
Section 49 of the APA further provides that the competent officer, or that officer’s supervisor, may revoke an administrative order on the bases set out in Sections 51, 52, and 53 — regardless of whether the matter has gone through formal appeal or protest procedures under this or other laws.
The conditions for revoking an administrative order without appeal are strict, and the consequences depend on whether the original order was lawful or unlawful. In simplified terms: revocation of a lawful administrative order entitles the recipient to compensation for resulting damages, while revocation of an unlawful administrative order entitles the recipient to compensation only if they were unaware the order was unlawful. Section 51 of the APA specifies that no compensation is owed where:
- The person produced false statements, concealed facts that should have been disclosed, or made a threat or improper offer of property or other benefits to obtain the order;
- The person produced statements that were incorrect or materially incomplete; or
- The person knew the administrative order was unlawful at the time of receiving it, or their lack of knowledge was due to serious negligence.
As a result, a building permit obtained illegally — for example, through corruption — can be revoked without any compensation.
In short, receiving a building permit is no guarantee that the holder will be able to complete the project it authorizes. A building permit can expire, be revoked following an appeal, or be revoked by the administration itself. To mitigate the harsh consequences of revocation, it is strongly advisable to conduct thorough due diligence on a project’s legality before applying for the permit.