THAILAND Law and Practice Contributed by: Olaf Duensing, Jerrold Kippen and Weeraya Kippen, Duensing Kippen, Ltd.
then file an enforcement action in the Thai civil court to have the property seized and sold by public auction. The typical range of time needed to realise and enforce on a real estate security varies most significantly depending on the parties’ chosen dispute resolu - tion mechanism. Where the parties have chosen Thai courts, the typical range is 12-24 months. However, where the parties have chosen a competent arbitra - tion procedure, the typical range is six to 12 months. Pledge Where the security provided is a pledge, the lender must also notify the debtor in writing to settle the debt within a reasonable time to be fixed in the notice and if the debtor fails to comply, the lender may sell the property but only by public auction, prior to which the lender must notify the debtor in writing of the place and time of the auction. Business Collateral If the security is provided under the Business Col - lateral Act, then the lender must send a notice to the debtor to settle the debt within 15 days of receipt of the notice. A copy of this notice must also be sent to any preferential creditors registered under the Act. If the debtor fails to comply, the lender may then sell the property. There have been no restrictions on a lender’s ability to foreclose or realise on collateral in real estate lending that have been implemented by governmental entities in response to the pandemic. Lenders have been actively exercising their rights to foreclose in the current market. Thailand has an active secondary market for non-per - forming loans (NPLs), where financial institutions and investors trade these assets. The ongoing challenges in the real estate sector, along with high NPL levels, continue to sustain interest in this market. 3.7 Subordinating Existing Debt to Newly Created Debt In general, registered security rights over immovable property rank in order of registration. However, if the security is given by way of mortgage or registration
under the Business Collateral Act, and a later prefer - ential right in the property is registered based on pres - ervation of or work done on the property, then such later registered right may be exercised in preference to a mortgage or business collateral security interest. 3.8 Lenders’ Liability Under Environmental Laws A lender holding or enforcing security over real estate cannot be held liable under the Enhancement and Conservation of National Environmental Quality Act for any pollution emanating from real estate that secures a loan, unless the lender actually caused the pollution. 3.9 Effects of a Borrower Becoming Insolvent Security interests created by a borrower in favour of a lender are not made void if the borrower becomes insolvent. However, insolvency is grounds for any rele - vant lender to force the debtor into bankruptcy. Under the Bankruptcy Act, a secured creditor may enforce their security rights without need of permission from the bankruptcy court, but the lender must allow the property to be examined by the bankruptcy receiver. Furthermore, if the juristic act that created the security occurred within the three months prior to the bank - ruptcy petition and such act is found to have been done in order to intentionally advantage one creditor to the disadvantage of any other creditor, the act may be cancelled. If the advantaged creditor is an insider of the debtor, the three months will be extended to one year prior to the petition. 3.10 Taxes on Loans Normally, the registration fee for a mortgage over immovable property is an amount equal to 1% of the loan, but not exceeding THB200,000. However, see 2.10 Taxes Applicable to a Transaction for the cur - rent reduced rate.
4. Planning and Zoning 4.1 Planning and Zoning Framework
The Town and City Planning Act and the Enhancement and Conservation of National Environmental Quality Act control land use and zoning in Thailand.
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