Mortgage

Mortgage

What is the meaning of Mortgage under Thai Law?

A mortgage is a contract whereby a person, called the mortgagor, assigns a property to another person called the mortgagee, as security for the performance of an obligation, without delivering the property to the mortgagee.

The mortgagee is entitled to be paid out of the mortgaged property in preference to ordinary creditors regardless as to whether or not the ownership of the property has been transferred to a third person.

What are the properties that can be mortgaged?

Under the Civil and Commercial Code any given properties that immovables e.g. (Condominium, House and Land etc.) are permissible to be mortgage except for the movables e.g. (Ship of 5tons and over, floating houses and domestic animals horse and cattle etc.).

What are the conditions for Mortgaging in Thailand?

A contract of mortgaged must specify the property mortgaged, given that no property can be mortgaged except by the owner for the time being, when in terms of Security of Performance, a person may mortgage his property as security for the performance of an obligation by another person, keeping in mind that a contract of mortgage must be made in writing and registered by the competent official, it also states that The mortgagee may enforce the mortgage even after the obligation secured has been barred by prescription, but arrears of interest on the mortgage cannot be enforced for more than five years or so.

What process should a mortgagee do before taking a case to the court?

As aforementioned above in the event that a mortgagor fails to pay what has been agreed in the written mortgage agreement. The mortgagee’s lawyer must send a notice for 60 days to mortgagor to give an allotted time to settle as stated by law before bringing the case to the court.