Section 702 — Mortgage — definition
Statutory text (Thai original)
อันว่าจำนองนั้น คือสัญญาซึ่งบุคคลคนหนึ่ง เรียกว่าผู้จำนอง เอาทรัพย์สินตราไว้แก่บุคคลอีกคนหนึ่ง เรียกว่าผู้รับจำนอง เป็นประกันการชำระหนี้ โดยไม่ส่งมอบทรัพย์สินนั้นให้แก่ผู้รับจำนองผู้รับจำนองชอบที่จะได้รับชำระหนี้จากทรัพย์สินที่จำนองก่อนเจ้าหนี้สามัญ มิพักต้องพิเคราะห์ว่ากรรมสิทธิ์ในทรัพย์สินจะได้โอนไปยังบุคคลภายนอกแล้วหรือหาไม่
Verbatim from the Royal Gazette / Office of the Council of State
English translation
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. feedback (/form/1-samuiforsale-contact-form.html?tmpl=component) / 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.
This English translation is provided for reference only and has not yet been firm-verified — always rely on the Thai original.
Firm annotation
Section 702 distinguishes mortgage from pledge (§747): mortgage = security without delivery; pledge = security with delivery. Mortgage applies primarily to immovables (land, condos) and to ships, machinery, and floating houses. Title remains with the mortgagor — the mortgagee gets only a security interest registered against the title. Foreigners can be mortgagees of Thai land (a useful arrangement for foreign lenders financing Thai property purchases), but cannot be mortgagors of land they cannot own.
Why this matters in practice
Lawyers: A mortgage is accessory to the underlying obligation — if the underlying debt is invalid, the mortgage is also invalid (Section 702 read with Section 8905/2551). The mortgagee's priority right follows the property even if it is sold to a third party, making it a real right (right in rem). Laypeople: When you mortgage your land to a bank, you keep possession and can continue using it, but the bank has a registered priority claim over it. If you do not repay, the bank can eventually force a sale of the land.
Legislative history
Part of the original Civil and Commercial Code codification; no major subsequent amendment.
Supreme Court decisions interpreting this section
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Supreme Court Judgment No. 8905/2551 (2008) ★ Landmark
A mortgage is void if the underlying obligation it secures is not proven or does not exist — the mortgage is accessory to the debt.
The plaintiff could not prove the underlying loan. The Supreme Court held that where the underlying debt is not established, the mortgagor is not liable under the mortgage — because under Section 702 a mortgage exists only to secure a valid obligation.
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Supreme Court Judgment No. 1587/2555 (2012)
A mortgage extends to all structures existing on the mortgaged land at the time of registration; subsequent separate transfer of the structure does not remove it from the mortgage.
Under Section 718, a mortgage extends to all things attached to the mortgaged property at the time of registration. A house that was attached to the mortgaged land at the time of registration was included within the mortgage, even though the mortgagor subsequently transferred the house separately.
Curated decisions with case numbers verified against the Supreme Court database. English renderings are the firm's editorial translation for study.
Frequently asked questions
If I mortgage my land to a bank, can I still sell or rent it?
You can rent it out without the bank's consent in most cases, as you retain possession. You can also sell it, but the buyer takes it subject to the mortgage — the bank's registered mortgage right follows the land to the new owner. In practice, banks typically require their consent before any sale or transfer of mortgaged property.