If you are going to buy a condo in Thailand then you will need to look at what protection the law offers you. Selling condominium units which is covered by the Contract Controlled Business B.E. 2543 (A.D. 2000) as well as the Consumer Protection Act. Likewise see buying off plan which is covered here. Lastly there is also the property investment page on here.
You will note that Article 1 covers the Controlled Business Contracts which is there to regulate businesses and covers condominium as well as apartment sales that are subject to contractual controls.
The scope as well as the definition of the law is covered in Article 2 which defines what this entails. It defines “Condominium and Apartment Sales Business” as any business that sells condominium or apartment units. These include units that are planned for construction (buying off-plan) as well as those currently under construction.
Likewise, those units which are completed and in the post-completion process. Likewise, those units which are already constructed and registered as units. So this law covers all condominium as well as apartment units in Thailand. Those that are not built yet (off-plan buying) as well as those that are in the process of construction. Likewise, those units that are already registered.
Further Article 3 writes about the contractual stipulations and requisites for the contracts. Firstly, the contract must be composed in Thai and readily visible, employing lettering no smaller than 2 millimeters. Much like in the West, the font size is usually no less than font size 12. The contract must also incorporate the following clauses:
This must state that the business owner owns the land rightfully where the condo units will be built. That the land is intended for the construction and registration of the condo units. They also have to commit to completing the construction and registration of the condominium or apartment units. This can be either when this is still off-plan or when the units are in the process of construction. Likewise when the units have been completed. When the business owner holds ownership then an authoritative signature can be appended to the agreement. Likewise supported by the title or authorized documents.
Note that the property agent cannot sign this unless it is the appointed agent of the developer. Otherwise, it requires the signature of the developer and not a property agent. Most agents in Thailand do not have the necessary authority to sign the document. Lastly also see construction law in Thailand especially for those who wish to retire in Udon Thani.
The owner has to disclose to the buyers any encumbrances over the property. These are any financial institutions or other parties. Normally this will be a mortgage bond over the property. This will affect the land as well as the property.
There also has to be full information on the location of the land as well as the title deed number. They will need to provide the project’s land area coverage. Likewise, a map illustrating the entire land area.
Likewise, the owners or developer will also need to stipulate the sales price per square meter alongside the total size of the sales unit. You can further read the articles we have on property developers in Thailand as well as completing a due diligence study on property before you buy.
Much like under the Condominium Act in Thailand, there have to be details on the utilization objectives for the segment in the development. This also outlines unit specifics and lists the size of common areas and amenities. Note that the corner units in Thailand tend to be larger as they are built around the corners of the building. Likewise giving the corner units an additional 10 sqm and thus costing more.
The contract also has to outline the business owner’s responsibility. Likewise for income tax, specific business tax (SBT), as well as the duty stamp related to ownership transfer. This encompasses registration and contract fees, jointly shared by the business owner and consumer.
Looking at possible consumer default scenarios in payment before ownership transfer. The business owner possesses the right to terminate agreements based on the following terms:
(a) Should you have only one payment and then default on the single installment payment?
(b) Likewise defaulting on 3 consecutive payments when there are 24 or more installments.
(c) In addition defaulting by 12.5% of the price when installments are fewer than 24.
However, executing such termination necessitates a written notice from the business owner. There also needs to be proof of having notified the other party. The consumer must settle the overdue payment within 30 days from notice receipt. Likewise failure of which results in neglecting the notice.
Note that the description of the property has to include all the details. These include but are not limited to the type of sanitary ware, doors, windows, and other materials used. Most developments will advertise this as they will show imported tiles, designs, and kitchen designs. These have to be included. Also, there needs to be provision for equal and suitable equivalent replacements if needed.
Likewise, there needs to be committing to precise construction as per government-approved plans. In addition, ensuring project standards are at least equivalent to relevant legal requirements. Cost cutting in developments is not unknown.
You will note that Article 3 of the Contract Controlled Business law is the longest part.
Note that there also have to be meters for public utilities in common areas and units. There are normally advanced payments for unit meter installations. The business owner later reimburses the consumer upon transfer of ownership and meter naming.
While addressing construction suspensions unrelated to the business owner’s faults, allowing extensions could be allowed. This however must not exceed the limits set out by the extension period. The business owner must notify the consumer in writing within 7 days of the suspension’s end; failure to do so waives the extension claim. The extension’s duration cannot exceed 1 year and does not apply to effective purchasing agreements.
Should the business owners not complete construction as per the agreement’s timeline:
(a) Consumers have the right to terminate the agreement. Likewise claiming paid amounts including default penalties specified by the business owner for late consumer payments. Consumers retain additional compensation rights.
(b) Should consumers choose not to terminate the contract, they may fine the business owner at no less than 0.01 percent per day based on the unit price, not surpassing 10 percent of the unit price. However, if the consumer overlooked the business owner’s inability to meet the schedule, termination remains a valid option.
(c) If construction remains incomplete due to force majeure, the business owner refunds the total paid amount to the consumer, plus interest equivalent to the savings interest of Krung Thai Bank Plc., from the payment date. This doesn’t impede the consumer’s right to claim further compensation. The reimbursed amount might offset the owed interest as agreed.
Business owners must provide written notifications to consumers, at least 30 days in advance, about the ownership transfer registration date. Should the consumer request earlier registration via written notice, the business owner must accommodate this within 7 days.
Note that under the law, business owners bear responsibility for unit defects:
Likewise, the business owner must rectify wear and tear within 30 days of receiving written defect notices. Urgent situations demand immediate resolution. Consumer-initiated repairs, if required, are reimbursed by the business owner. It is always best to call and speak to them first so that it does not come across the unnecessary later. As per relevant Laws and Regulations, written notifications must be sent via registered mail to the consumer’s agreed or latest informed address.
Contracts provided by business owners to consumers must be equitable and impartial. This implies the absence of:
Clauses excusing or limiting business owner accountability.
Clauses that absolve business owners from defects or strip consumers of compensation rights. Exceptions include consumer acknowledgment of such defects or limitations through written notification during contract signing. However, this acknowledgment only holds weight when it’s deemed fair and just.
The information contained in our website is for general information purposes only and does not constitute legal advices. For further information, please contact us.