IN ITS regular Phuket Post ?Legal Business? column, Duensing Kippen will be providing legal information particularly relevant to the business community here in Phuket. The majority of our material will come from ?real world? experiences, in other words from actual issues raised in the course representation of our clients. Further, Legal Business will also keep an eye on and discuss inaccurate legal advice published elsewhere. Finally, Legal Business will also provide updates on any significant pending or newly enacted law. What could be more relevant?

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What does a building permit have to do with legal ownership of a building?

Recently, in another local news publication, you might have read two articles that asserted that: (1) ?the party named in the [building] permit is legally considered to be the owner [of the building]?; and (2) ?a government policy has been established which considers other documentation as relevant and acceptable when it comes to determination whether someone legally owns a building or not. Usually, such documentation is a valid construction permit."

To read this may have been particularly disturbing to many foreigners who are allowed to legally own buildings in Thailand. Some of you may have wondered: is the contractor who applied for the building permit and who then built my house ?legally considered? to be its owner?

However this is only relevant if the published statements were accurate and not misleading. In order for the statements in question and what they imply to be correct, there must be some legal basis for a building permit to create ownership rights in a building. We begin then by investigating the legal nature of a building permit.
The issuance of a building permit is legally an ?administrative order?.

An administrative order is defined as ?an exercising of powers under the law by the competent officers with an effect of creating legal relations between persons.?

The relevant law for the issuance of a building permit administrative order is the Building Control Act B.E. (?BCA?). What power then does the competent officer exercise under the BCA in issuing a building permit and to what effect? The administrative procedure is as follows. The applicant submits the application documents to the local administrative office.

After a site visit and a verification of the application documents (e.g. construction drawings and specifications, etc) and review of whether or not the contemplated structure is legally permissible, the local administrative office must either issue the building permit, or deny the issuance thereof and inform the applicant in writing with the reasons for the non-issuance, within forty-five days from the date of the application. Thus, the legal effect of this administrative order is merely the legal permission to a person to build a certain structure on a defined plot of land.

What then is the relevant law that creates ownership rights? And more particularly, how does one actually legally own a building? Ownership rights are created through the Civil and Commercial Code (?CCC?). Sections 137ff and 1308ff of the CCC describe what ownership rights exist and how ownership rights can be acquired by law.

In the case of immovable property, Section 139 CCC states that it is ?land and things fixed permanently to land or forming a body therewith...[i.e., e.g. buildings]?. The CCC therefore provides that the landowner ?automatically? by law becomes the owner of any structure permanently affixed to his land. Note however, that even though property ownership is generally established and detailed in the CCC, the building permit is not mentioned. It is understood that on a practical level, it is recommended to receive the building permit in one?s name. The land department currently refuses to register certain rights if the applicant does not have the building permit in his name.

Therefore, no building owner who has established legal ownership rights of a building through the construction of a structure on land under a superficies ar

rangement should be concerned if another person?s name is in the relevant building permit. Such person will not be able to establish any ownership rights to such structure through that building permit. Even if current land department practice might be an obstacle to a future sale or lease registration, the courts will follow the CCC and decide the ownership independent from the building permit.

Thus, what does the building permit have to do with legal ownership of a building?

Answer: nothing.