Now is a good time to purchase that Sukhumvit condo. Though prices are on the high side compared to a few years ago, interest rates are coming down and banks and finance companies, who wouldn’t even lend cash-starved customers an ear a couple of years ago, are now throwing money at anyone who walks through their doors.

Unless you happen to be an alien, that is.

Yep, alien. That is what the government calls foreigners, as in “Laws Governing the Acquisition of Immovable Property by Aliens in Thailand”, a publication by property consultants Sansri Plc that instructs aliens how to manoeuvre their spacecraft through the Warp Factor 9 of Thai property law.

While cheery bank managers are handing out mortgage loans to locals who want a piece of immovable property to call their own as part of the government’s consumer-led economic recovery, they tend to be a bit pickier about handouts to aliens. I can’t say I blame them. If an alien came up to me and wanted to borrow some money, I’d be a little suspicious too.

However, some finance companies are becoming more amenable. With the right credentials and a pay packet, finding an institution willing to front expatriate residents with a mortgage is not impossible.

Under present conditions (finance companies are lending up to 90 per cent of a property’s value, with repayment terms between five and 20 years), if you manage to secure a long-term mortgage and select a well-maintained condominium block in a location with high occupancy, then you should be able to comfortably match your loan repayments with the rent-equivalent of the unit.

As it stands, foreigners can own a freehold unit in a condominium. Also, the May 1999 Amendment Land Code Act states, in bad grammar, that “aliens” can own land not exceeding one rai (about 1,600 square metres) for residential purposes if they bring into the country “foreign currency... in an amount to be specified in ministerial regulations which shall in no event be less than Bt40 million and obtain permission from the Minister of Interior”. Unfortunately, no one has yet got around to issuing the ministerial regulations. Besides, the Minister of Interior is a very busy man, so it’s not as if you can just pop into his office with your bankbook and ask him if it’s now okay to buy that block of land you fancy on Phuket’s west coast.

The condominium market is active, but with 20 per cent of units in Bangkok unsold, prices have been held in check. A high vacancy rate also means you can afford to be fussy and tip the balance in your favour when hammering a deal.

In a city were it can take all day to pay the water bill, being near things is very important. Choose the location wisely. And if at some stage you choose to rent it out, be wise.

When searching for a location think about easy access to the Skytrain. If you are deep inside a soi, are there taxis or motorbike taxis around? How far is a decent supermarket, convenience store? Check out the neighbouring buildings. Could your view be blocked after suffering a year or two of construction noise as a 30-story apartment building rises from the rubble?

Take a good, long look at the building. Go there during rush hours to see what the traffic is like. Are pipe and electrical shafts sealed off between floors to prevent fire rising up the building? What fire protection and alarms systems are available? Are the fire escapes clear and the exit doors unlocked?

What is the condition of the common areas – sparkling pride or peeling neglect?

Are there any signs of leaks on ceilings and around the windows? Are the windows double-glazed and floors and walls sound-proofed? Are there telltale tidemarks on the walls and sandbags stored in the basement?

There are many more issues to consider.

Do your potential neighbours own or rent? Do they own or rent a karaoke machine? Do they skulk suspiciously in the hallways in the evening? Who manages the condominium? Is it a reputable company? Have you seen the juristic person accounts? What is a juristic person? What about the sinking fund? What are the management charges?

And what about all that burdensome paperwork and tiresome face-downs with bureaucrats that follow an agreement to purchase?

Many of these questions lead inextricably to a single and even more important question: Where do I get a decent property lawyer?

Fortunately, most of the better property consultancies offer this service and I for one would pay them handsomely to avoid the anguish of going it alone.

Tisco Finance Plc’s website – www.tiscogroup.com – gives details for foreigners wanting to take out mortgages, and has a handy mortgage calculator so you can work out your monthly repayments over a given period.

Buying land in Thailand

Thai property law states that with a few exceptions – like a Board of Investment approval or suitcases full of money deposited in a Thai bank – foreigners are not allowed to own freehold land. They can only lease the land for a maximum of 30 years. But Thai law has many grey areas; in fact, it seems at times it has more grey areas than black and white areas.

In 1999, the government lurched out of the 19th century to amend the property law to allow a Thai spouse (male or female) of a foreigner to buy land.

Unfortunately it only lurched as far as the early 20th century. For the spouse to buy land, proof is required that the money used to purchase the land is legally the Thai partner’s, with no foreign claim to it. Get divorced or separated and the Thai “ex” gets to keep it all. Even if the Thai spouse dies, the foreigner has no claim to the land and there is nothing to stop the relatives from moving in (if they haven’t already) and booting you out.

If you want a house to call your own without the prospect of your spouses’ relatives circling hungrily, this is not a good option.

Most foreigners who “own” land and houses – as opposed to condos, which can be owned outright – go for a leasehold agreement of typically 30 years, with two prepaid 30-year renewals. The lease will include clauses that automatically allow freehold ownership if the laws of foreign ownership change in the future, and the right to sell and/or transfer the property.

This gives you 90 years with strong backup, making it effectively ownership.

Just to complicate things a little, while you can only lease land, all the buildings – either on the land when it was purchased, or improved or built by you after purchasing the land, are yours freehold. Technically this means that once the lease expires, the owner of the land must purchase the building(s) at an independently and legally valued price, or negotiate another lease period. God knows how that can work.

The structure of a lease agreement needs to be watertight. But because this has become the preferred way of holding land in Thailand for foreigners, this type of lease agreement has become more or less a template, with add-ons to suit individual buyer’s needs.

But don’t draw it up yourself. Get the advice of a lawyer versed in such things. And don’t sign anything or hand over any money until you fully understand and are happy with what’s written on the lease agreement.

One thing you need to be aware of is the title status of the land you are purchasing. In much of upcountry Thailand, including favourite places to buy for foreigners like Phuket, Ko Samui, Pattaya and Hua Hin, most land has not been surveyed or has been dubiously titled.

Land is titled depending on its survey status. Make sure of the land title before you buy – often prices vary greatly depending on the type title – or you might find someone else laying claim to your rai after just after you finish building your retirement home.

“Chanott ti din” are title deeds with land accurately surveyed. If you have one, it gives you incontestable possession of the land. The most developed areas of provinces have these titles. But even in farang-friendly Phuket, for example, only 10 per cent of the land is under this title.

As it stands, most “titles” around the country are “Nor Sor Sam” or “Nor Sor Sam Kor”. They are land title deeds in as much as clear records of ownership are maintained, and that they may be sold or leased, but they tend to be less accurately surveyed than Chanott titles.

If purchasing Nor Sor Sam-titled land that lacks clearly defined physical boundaries, ask the owner to stake out the boundaries and then ask neighbouring landowners to confirm his work.

And there are more. Sor Kor Nung, Tor Bor Tor Hoc, and Tor Bor Tor Ha are essentially squatter’s rights registered at the district office for a small fee. Unlike the Chanott and the Nor Sor Sam Kor, they cannot legally be sold, nor can you build on the land if you are stupid enough to buy it. So be a prudent foreigner and ignore the Sor Kors and Tor Bors.

Oh yes, I almost forgot one: the Sor Bor Kor. These are true title deeds, accurately surveyed and pegged (like a Chanott). They can be mortgaged and developed. But the big but is they cannot be leased, sold or transferred.

So, also ignore Sor Bor Kor.

Chanott and the Nor Sor Sam Kor are the only titles over which a registered right of ownership or lease. Stick to them.