Immediate Seller Ownership Rights upon Redemption Placement at the Land Office, Irrespective of the Buyer's Title Deed Return

A sale with the right of redemption is a contractual arrangement in which ownership of the sold property is transferred to the buyer, with the condition that the seller retains the option to repurchase the property by virtue of Section 491 of the Civil and Commercial Code (the “CCC”)¹. Initially, ownership immediately transfers to the buyer, but the seller has the opportunity to redeem the property within a specified timeframe. However, if the deposit is due and the buyer does not accept it, the seller has the right to place a redemption with the estate office. Ownership will be reverted to the seller once the redemption is paid or the property is deposited.

In the context of agricultural land sales, there is often a risk of unscrupulous buyers or opportunistic capitalist groups exploiting the knowledge gaps of villagers or farmers regarding the law. They may use their influence, employ intimidation tactics or take advantage of farmers and landowners to acquire land at lower prices, or to consolidate land holdings for their own benefit.

To address these concerns, the Land Department has introduced Regulations Regarding Property Redemption at the Land Office, in accordance with the Law on Protecting the Public in Contracts for the Sale of Agricultural or Residential Land (No. 2) B.E. 2566 (2023) (“Land Department Regulations No. 2”). These regulations came into effect on 6 July 2023; they serve as amendments to the original regulations and align with the principles outlined in Section 18, paragraph three of the Act on the Protection of People in Making Contracts for the Sale and Deposit of Land for Agricultural or Residential Use B.E. 2562 (2019) (“Land Department Regulations”).

Clause 3 of the Land Department Regulations No. 2 introduces the following as Clause 9, paragraph two into the Land Department Regulations: 

In the following cases, it shall be deemed that the original land rights document is damaged or lost, which meets the criteria for issuing a replacement of the land rights document (such as land title deed) to register the redemption from the consignment sale to the consignor, as per Section 63 of the Land Code², in conjunction with Ministerial Regulation No. 43 (1996) issued under the Land Code, B.E. 2497, Clause 17(1)³.The issuance of a replacement certificate shall follow the prescribed rules and procedures:

When the consignor has paid the redemption or placed the redemption at the land office, thus relinquishing the right to withdraw the assets already placed. After the land officer’s order to accept the deposit of the redeemed property is received, and a notification has been sent to the buyer requesting them to claim the redemption money and submit the land rights document for registration under Section 8 of the Land Department Regulations.

When 30 days have passed from the date of notification, or 30 days have passed from the date considered as the notification date under Section 71 of the Administrative Procedure Act B.E. 2539 (1996), and the buyer has neither appeared at the land office nor reported any issues, or the buyer has appeared at the land office but has not submitted the document proving their rights to the consigned land.

Due to the above under Clause 3 of Land Department Regulations No. 2, which is now introduced as Clause 9, paragraph two into the Land Department Regulations; it means that when the seller places the redemption at the land office within the specified legal timeframe and the buyer neglects to submit the necessary documents demonstrating land rights, such as title deeds for redemption, it will be deemed that the "original land rights document is damaged or lost”. In such cases, the Land Office is authorised to issue a replacement document in order to record the redemption of the sale with the right of redemption in favour of the seller. In other words, when the seller places the redemption at the land office, they regain ownership of the land, regardless of whether or not the buyer returns the title deeds.

Regarding the redemption or redemption price, it is essential to note the following:

• The redemption must be made in monetary form.
• If not explicitly specified, the law permits redemption equal to the sale price.
• The redemption price can be set higher than the actual sale price but must not exceed an annual interest rate of 15 percent. If the interest rate surpasses this limit, redemption can be based on the actual selling price, capped at 15 percent per year.

Nuttaros Tangprasitti
Partner
Maychaya Phoraksa
Associate

Authors