The builder's lien you won't see on the title deed: Thailand's preferential right for unpaid construction work

Can a contractor who was never fully paid for building a villa make a legal claim against the property after it's sold? Yes — the Civil and Commercial Code gives builders, architects and contractors a preferential right (บุริมสิทธิ): a statutory security interest that arises automatically by law, without any contract creating it, over the specific increase in value their work added to the immovable. It sits alongside — and can even outrank — a bank's registered mortgage, yet it won't show up unless you know exactly what to look for.

The legal basis

• CCC Section 273 recognises several categories of preferential right a creditor can hold over a debtor's specific immovable property, arising directly from the nature of the debt rather than from a registered contract like a mortgage.
• Section 275 creates the one that matters here: a builder, architect or contractor has a preferential right for unpaid charges relating to work done on a debtor's immovable — but only over the increase in value the work produced, not the property's full value, and only for as long as that increase still exists.
• Section 286 is the catch: to preserve priority against a mortgage or a later purchaser, the contractor must register a provisional cost estimate before the work begins. If the final cost runs over that estimate, the excess isn't protected.
• Section 287 gives a registered preferential right real teeth — it can be exercised in preference to a mortgage, even one registered earlier, because the mortgage only ever secured the land's pre-improvement value.
• Section 289 applies the Code's mortgage-enforcement rules to preferential rights correspondingly, meaning an unpaid contractor can, in principle, force a sale to recover what's owed.

Why it rarely bites — and where it still can

In practice this mechanism is uncommon on Koh Phangan and across Thailand generally, precisely because Section 286 requires the contractor to register a cost estimate before a single brick is laid — a step most villa builders, especially smaller local outfits building on a handshake and staged cash payments, never take. Most unpaid-contractor disputes are instead fought as ordinary breach-of-contract claims under the hire-of-work provisions (CCC Sections 587–607), not this lien. That's reassuring, but it doesn't make the risk zero: a dispute over a recent build — especially one rushed to completion for a quick resale, or where subcontractors or a labour crew went unpaid partway through — is exactly the scenario where a contractor with good legal advice might have registered, or could still be pursuing, this right.

A standard land-title search at the Land Office does show registered encumbrances, including a properly registered preferential right for construction work, alongside mortgages and leases on the back of a Chanote. The gap is buyer awareness: most due-diligence checklists (see the general due diligence checklist) are written around mortgages, leases and caveats, and don't specifically prompt a check for this less-common entry.

What a buyer of a recently-built villa should actually do

• Read the full encumbrance section of the title deed, not just the mortgage line — a registered preferential right for work done would appear there too.
• Ask the seller for evidence the builder was paid in full — final payment receipts, a signed completion/handover certificate, and ideally a written lien waiver or release from the main contractor.
• Ask specifically about subcontractors and labour crews, not just the head contractor — a dispute further down the payment chain is a common source of an unresolved claim, even if the main contractor was paid.
• Treat an unusually fast, discounted sale of a newly finished villa as a reason to dig deeper into the build's payment history, not less.

This preferential right is a narrow, rarely-invoked corner of Thai property law — but it's a useful reminder that a villa's legal risk profile isn't only about who owns the land and whether the lease is registered. It can also include who built the structure standing on it, and whether they were ever paid.