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Offices Nationwide and Worldwide Head Office Tel: (+66) 2 254 8900 www.siam-legal.com Introduction Siam LegalInternational Director ofClientServices Dennis P.Ramm in Thailand. Enjoyreading! world real the into venturing are you whenever confidence information greater instill and valuable with you provide will guide this that hope we broker, a or buyer a developer, estate real a are you Whether ican andBritishChambersofCommerce. We are also an active member of both Amer- endeavors. investment and business estate, real your all to solutions tailor-made provide toable are we Thailand, in developments gal tional clients. Keeping abreast of the latest le- interna- and local both to solutions legal tive effec- highly providing of record track a with staffmulti-lingual 40 than more employ We ally. internation- and domestically clients to sible acces- are that services estate real and rate corpo- legal, professional of range extensive an offer we Thailand, throughout branches ternationally inLondonandLosAngeles in- located offices With well. as services ofle- gal range a wide offer we Legal, Siam At development business. propertysuccessful a running on guideline a even and off-plan in pitfalls titles, leasehold in for look to what property, your for financing obtain to how , a buy to how at look We estate. real regarding issues of number wide a covers guide This sues inThailand. is- estate real current the all on touch which this guide our most popular property articles In particular, we have chosen and included in cate maze that makes up Thai property . law, we intri- often the into light some shed to hope to property guide first our this, In Estate inThailand! Welcome toSiamLegal’sGuideReal Dear Readers, Thailand’s Largest Thailand’s Legal Service Legal Network BANGKOK LONDON LAS VEGAS PATTAYA PHUKET CHIANG MAI Two PacificPlaceBldg. Siam Legal(Thailand) (London) Siam LegalInternational SL International Siam Legal(Pattaya) Siam Legal(Phuket) 2nd FloorCurveMall Siam Legal(ChiangMai) Our Locations Tel: (66)2-254-8900 Tel: 0207-101-9301 (323)-482-1525 Tel: 1-877-252-8831(Toll-Free) Tel: (66)84-021-9800 Tel: (66)84-021-9800 Tel: (66)53-818-306 Introduction Phuket 084-021-9800 Pattaya 084-021-9800 Chiang Mai 053-818-306 Purchasing in Thailand How to Structure your How to Lease Property Thailand Property as an Investment Over 50 Articles on Thai Real Estate Definition of over 500 Terms Land Explained Samples of Real Estate Bangkok 02-254-8900

• • • • • • • • • • • • LICENSED FIRM: Our legal staff are licensed practitioners in either It is highly jurisdiction. Thailand or their home independent legal recommended that you engage with your real associated advisors who are not The real estate industry in Thailand matter. estate when you be taken and care must is unregulated are looking for advisers to represent you. ONLINE VIDEO SERIES: Using the latest rapid download video technology, videos online informative highly of series a we have on relevant topics such as: ONLINE RESOURCES: information for more our website visit also may You on your Thailand Real Estate purchase. www.siam-legal.com/realestate CONSULTATION: You can call or visit any one of purchase. estate real your regarding consultation our offices for a question any We are always delighted to answer you may have. Our staff is available 7 days a week to assist you. www.siam-legal.com

Arrange for the structure of ownership Department Register the property at the Land Title Search on the property Due Diligence Draft and Review contracts

iam Legal is proud to provide you with our iam Legal is proud to provide those for especially intended publication legal

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you. down the legal, cultural and language barrier for language and cultural legal, down the you through your purchase by helping to break your purchase through you States, United Kingdom and Thailand. We will guide will We Thailand. and Kingdom United States, of highly qualified legal practitioners from United therefore quite important. Our staff is comprised process both here and in your home jurisdiction is representative who is familiar with the legal who is familiar representative your real estate transaction. Having a legal a Having transaction. estate real your protect their investment as much as possible. a clear understanding of the legal process for perspective and by implementing safeguards to safeguards perspective and by implementing & SOLICITORS: ATTORNEYS obtain should you property buyer, foreign a As understand the transaction from the foreign buyer’s foreign the from transaction the understand real estate topics. Our key strength is the ability to is the strength topics. Our key real estate contributors to numerous key publications on contributors to numerous the property field and are leading authors and professionals are considered legal experts in are considered professionals and two international offices. Our firm with four office locations Thailand across We are Thailand’s leading property conveyancing We are Thailand’s CONVEYANCING EXPERTS: CONVEYANCING OUR SERVICES:

solicitors can assist you in every step of the way. solicitors can assist you in every a complicated matter. Our staff of attorneys and Buying property in Thailand doesn’t need to be Buying property in Thailand behind purchasing real estate in Thailand. in estate real purchasing behind who wish to know more about the legal processes who wish to know more about the S ailand n Th y i rt Thailand has many different e types of properties on offer and what B op ever your dream home is, you can realize it here uy Pr if you have all the right paperwork. Prices are a lot ing a cheaper than in Europe or the US but there are a few extra checks you will need to make here as laws and culture to differ to your home country.

The first thing you need to do is obtain the services of a reputable real estate agent or lawyer on your behalf. General Property Information Check over the title and make sure the property is what it says. Some buyers have bought the house only to find the land is on a different title & vice versa. The same goes with the boundaries of the property which need to be the same as the title deed. If buying from a private individual you have to get your lawyers to draw up a reservation or purchase option and lease . This contract binds you and the seller to the sale of the house at a specific price in accordance to schedules you have both agreed. Such an agreement will include any penalties for default of either party.

Now that you have the title all checked out you can go ahead and translate it into English just to make sure. If you are buying a new home from a developer, the developer will almost likely have a standard contract format. The format may vary but always go over the deed and title and anything else in the contract regardless of what the developer shows you.

nt of your Property me y A deposit of 10% is usually required to secure a property and total payments should be a made within 30 to 60 days. You can obtain longer periods but you will probably be required to P pay a higher deposit. Deposits are normally non-refundable, except by default of the vendor, so bear in mind that once the deposit is placed you are committed. This is also the same for the seller. They have to refund your deposit and pay a penalty of an equal amount if they default on the contract. Deposit in escrow is still rare in Thailand, but it is becoming an increasingly recognized way of proceeding. It is a lot safer compared to having to make a claim for damages in case the seller defaults.

Beyond the price, payment and schedules, it’s important that a contract includes clauses to cover who will pay the legal fees, transfer fees and taxes as well as an understanding of the value at which the sale will be declared. This is normally, for tax reasons, at or close to the government minimum assessed value.

Buildings apart from do not have any form of title document, but their sale or long lease can be registered at the Amphor land office. Proof of ownership, must be established either from proof of construction or document showing previous sale-purchase. This is not to be confused with the House

1 Construction Law 2 Conclusion The planning stage of any property developments requires a lot of hard work and perseverance. Property development is an inherently risky business as capital expenditure is often high and extremely asset, main as its property having of nature is, by liquidity Financial management is crucial to the success of a project low. development and in order to have good financial management, it is aspects of the technical the all of planning good have to essential project. At least with good planning, you will know early on whether to continue on with the project and proceed to the next stage. The Feasibility Study crunching session in Now is time to do that all important number will normally begin by identifying the criteria We a feasibility study. the technical and and the parameters we need when we consider among others, time financial aspects of the project. This includes, as well as the scales, costs for consultants, cost of construction you want to make. likely end sale values and the margin There are many softwares out there today that can help make this It can generate reports and offer cheaper and easier. part faster, recommendations on the likely success of the project. Nonetheless, success depends a lot on this feasibility study as this a project’s is what allows you to make an informed decision. Sufficient time, resources, and expenses should be allocated to ensure that the objectives can and will be achieved in the later stages. and Project Organizing the Team the only thing left to do in this first stage of the process Finally, structure. management and organization project a up set to is This is important in the process as it outlines the players and their roles in the project. It also sets out accountabilities and provides a everyonewhich with framework final the achieve to with work can goal. Environmental Regulations Environmental prominent for more becoming also concerns are Environmental National In late 2007, the Office of today. property developers issued Planning (ONEP) and Policy and Environmental Resources everya new regulation requiring to plant a tree new property project height and width for everyat least five meters in unit air conditioning 12,000 to 24,000 BTU. Also, a condominium that ranges between has more than 80 units or housing projects project in Thailand which need than 100 rai or about 40 acres will with a land area of more Impact Assessment (EIA). Smaller to apply for an Environmental Environmental Evaluation projects may also need to have an Initial (IEE) done. Brief Starting a Project need will then land, we the on evaluation and checks all this After preliminarya of form the in Requirement’ project ‘User’s a up set to market wants in that area brief. This is where you assess what the sell or lease well. Take and build something that you believe would issues relating to a look around the neighborhood and consider be noted that the User’s town planning and urban design. It should a detailed honed into Requirements are progressively refined and stages so do not project brief throughout the design and tendering out exactly what it is you be too concerned if you haven’t figured want to build. regarding the height of buildings may also be in place. To find this this find in place. To also be may of buildings the height regarding office or land local district with the to check will need out, you due standard conduct a also should You is located. the land where relating to finding out issues the land which includes diligence on covenants or any other if there are any title, discovering a good time to project. This is also may impede your on title which project required for your proposed licensing will be find out what for allocation a property need your project will and whether of separate plots. the subdivision

Land Resolutions with issues any are there if ascertain to is stage next The ministerial or laws zoning any are there if out Find land. the regulations which may affect what or how much you can build on the land. In most coastal properties, restrictions Getting Started The first thing to do is to arrange your finances and outline a budget for your project. Equipped with this, you would then go out in search of suitable block of land with potential for development. It is a good idea at this stage to have your can either have team of consultants ready at hand. You a development manager who can coordinate the whole process or you can liaise individually with a number of an architect, a quantity advisers which may include a lawyer, urban planner and an estate agent to provide you surveyor, with initial advice on the property and the marketability of advisers, this with your any possible development. Together is also the stage where you identify your project objectives. Stages of Property Development Stages of Property project can be In general, the steps in a development order, respective in are, They stages. five into down broken construction tendering, design, feasibility, and inception will focus on and handover and maintenance. This article This first step is the first stage of a project development. important as it will let you know early on whether the project will be worth your time and effort and provides a strategic structure with which to establish the rest of the development stages. In practice, this is often considered by practitioners to be the most difficult and challenging stage since if it is not handled with care, it could potentially be a recipe for disaster later on. There are so many different types of property development development There are so many different types of property what the end so it is important to set out from the outset of goal is. This is important because the implementation requiring works in a project can be a lengthy operation variables. In this a myriad of resources and a host of or real estate article, we will concentrate on property or ‘fixer- development as opposed to land development can be uppers’. Property or real estate development buildings on raw of physical the construction defined as commercial, land. This can take the form of residential, projects. Further institutional, recreational or industrial of the classification can be made on the complexity is a high or low- intended buildings or whether the project rise structure. Property development is a complex business process is a complex business process Property development proper planning is essential. and like all businesses, property development involves Unlike other businesses, and solid financial management. many intricate steps often brings to mind stories about Property development it is even seen as the ticket rags to riches. Sometimes, However, property development to our early retirement. faint hearted and requires just as is certainly not for the yield to businesses other any as more, not if effort, much with good good news is though, a healthy turnover. The dose of hard work, a property planning and a healthy indeed produce a very profitable development can income for the developer. Guide to Planning a Property to Planning a Guide in Project Development Thailand PROPERTY DEVELOPMENT & DEVELOPMENT PROPERTY CONSTRUCTION 3 Condominium Condominium? Thinking ofBuyinga by yourcondominiummanagementcompany. position iffacedwithunfairorunscrupuloustreatment by theCondominiumActwouldputyouinabetter taken into account. Also,knowing your rightsafforded time, moneyandeffortcanbesavedifthesesteps are When purchasingacondominiuminThailand, much nightmares impedingonyourdreampurchase. inordertopreventanyharrowingbe justasnecessary checks arenecessary, thereareotherstepswhich may registered encumbrances on the property. While such owner iswhotheyclaimtobeandthatthereareno check for, amongothers,thatthetitleisgood, due diligence.Standarddiligencewillnormally steps whichshouldalsobeconsideredaspartofthe a fairlysimpleprocess,thereareneverthelesscertain Although purchasingacondominiumunitinThailandis ownership ofthecommonareaswithinbuilding. the individual ownership of living units and the joint the has beencreatedpursuanttoandregisteredunder similar. Acondominiumisaplanneddevelopmentthat Thailand, the features of this ownership right are quite in theUK,whichessence,isalmostidentical.In it asaStratatitleorcommonholdisknown titles inourhomecountry. Somejurisdictionsreferto Many ofusarealreadyfamiliarwithcondominium post-implications ofsuchanacquisition. it may be pertinent to shed some light on some of the condominium unitsamonglocalandforeignnationals, suchagreatinterestinis alsosteadilyincreasing.With and Pattayathenumberofunitsintheseregions popular touristdestinationssuchasPhuket,HuaHin There arealsoalargenumberofcondominiumunitsin with newdevelopmentssproutingalloverthecountry. Bangkok aloneandthisnumberiscontinuallygrowing there arenearly630,000existingcondominiumunitsin Bangkok researchconductedin2020hasshownthat to acquireapropertyinThailand.Indeed,recent and relativelystraightforwardmethodforaforeigner Purchasing acondominiumisbyfarthemostpopular Condominium ActB.E1979.Itischaracterizedby Condominium 4 Having Your Say Having Your cup of tea and it is Politics may not be everyone’s certainly regarded by many as a of time and effort. Such views do often lead to apathy and many of us try to avoid the dreaded rigmarole of residential enough, it will go politics and hope by ignoring it long knit arrangement would, Living in such a close away. conflicts in some way lead to some not surprisingly, or form. Indeed if you have a complaint, it is best to deal with it rather than live with it especially if you Common complaints may have to live with it everyday. by used being spaces parking pets, include, noisy loud music neighbours in an inconsiderate manner, members committee the or hours unreasonable at acting in an autocratic or biased manner. The Condominium Act requires that a general meeting be held at least once each year although in may You required. as be as often can practice, this wish to take the floor and air your grievances here preferred your not is audience of right a having if or mode of communication, be sure there are other within grievances your air to up set methods formal the juristic person. It is in your interest as a co-owner of the common areas areas of the common interest as a co-owner It is in your sure that a Be that everythingto ensure order. is in good is looking company reputable management good and manner. and transparent in an orderly after things their companies appointing of development Beware they could be acting with ulterior own managers as to repairs during the default liability motives in regards developer should be responsible period in which the may co-owners The person. juristic the not and for co- a new manager if 50% of the wish to appoint meeting agrees. owners in a general the juristic also wish to request for a copy of may You accounts to ensure that everything is in order person’s that are being siphoned furtively or and that no funds This is important any payments are unaccounted for. help maintain as you want to see fees you contribute in the long run. the premise and ensure its value there may be a need for the management Occasionally, to cover some to call forward an emergency fund the Condominium unexpected repairs. In practice, must fund this attain decision to the stipulates that Act a general meeting. have a three-fourths approval in the fund is indeed Before you vote, do check that for all the related genuine and by right, you may request expense. information in regards to this emergency Act also As an added precaution, the Condominium to oversee allows the co-owners to set up a Committee The number of the management of the juristic person. and may consist members shall not be more than nine who are of any of the co-owners of the condominium co-owners. It may elected in a general meeting of all rights are voting co-owner’s that a note to useful be the ratio of space determined by the proportion of owned in the building. Know Your Condominium Condominium Your Know Person Juristic

Thinking of Buying a of Buying Thinking -covering materials, -covering materials, s juristic person;

In some instances, you will not receive the by- receive not will you instances, some In

The ratio of the maintenance fees; Procedure for managers and their appointments. The ratio of each unit in terms of space; The procedures for the general meeting; The amount of sinking fund an owner must pay; The amount of sinking fund an owner Other common properties; properties How the common and individual would be used; Name of the condominium’ Objectives Location of the office; Sound or noise restrictions. Limitations on use of recreational facilities in the Restrictions on parking any vehicles or boats; Restrictions on types of floor drapes or window hangings, screenings or closing in of open balconies; Restrictions on pets; Restrictions on age of children who can use the common areas; pool or other facilities;

10. 8. 9.

5. 6. 7. 3. 4. 1. 2. 4. 5.

2. 1.

6. 3.

following: look out for may include the registered owner of the property. As a general rule, things to laws of the condominium until you are a legal and Note:

Act, it should, in the least, include the following: Act, it should, in the least, include Land Office in order to take effect. According to the Condominium to buy the property. amended Rules and Regulations registered at the the at registered Regulations and Rules amended decide you before Condominium the of Regulations vote amongst all joint-owners of the building and the the and building the of joint-owners all amongst vote of the Rules and It is prudent to obtain a copy increase must be agreed with a three-fourths majority agreed with a three-fourths majority increase must be Laws of the Condominium the condominium at the relevant Land Office. Any at the relevant Land Office. Any the condominium or By- Rules and Regulations also registered under the Rules and By-laws of of under the Rules and By-laws also registered as an amount per square metre. This amount is is amount This metre. square per amount an as that you own. As such, it should be expressed such, it should be expressed that you own. As fees must be in accordance to the ratio of space accordance to the ratio of space fees must be in Condominium Act stipulates that the maintenance stipulates that the maintenance Condominium Act from the condominium’s management company. The The company. management from the condominium’s to provide you with this or you may obtain it directly this or you may obtain it directly to provide you with may omit this in their documents. Do ask the seller their documents. Do ask the seller may omit this in units although some units in the secondary some units units although market should be in all the contracts for new condominium for new condominium in all the contracts should be monthly maintenance fee and sinking fund is. This is. This and sinking fund maintenance fee monthly Ensure that you check in the contract how much the much the the contract how you check in Ensure that Sinking Funds Sinking Maintenance Fees and and Fees Maintenance Developments relationship. However, we are much more used to seeing a contract as an exhaustive list of all the rights and obligations which allows for all possibilities and contingencies. So it may be good to keep this in mind when dealing with contracts in Thailand although you will generally find they can be quite accommodating to amendments if your relationship with them is good.

contracts are just an outline of the principles and serves as the basis of the relationship. However, we are much more used to seeing a contract as an exhaustive list of all the rights and obligations which allows for all possibilities and contingencies. So it may be good to keep this in mind when dealing with contracts in Thailand although you will gener- ally find they can be quite accommodating to amendments if your relationship with them is good. Developments

What to Look Out for in a Pre-construction Contract?

There are some fundamental elements which should be included in every pre-construction contract. These 6. Building Speci cations are, among others: The contract should have a comprehensive list of all the materials being used in the construction including 1. Time frame its quality, quantity and model. Usually, the more detailed the better. Be wary of substitution clauses An agreement should have a time frame which stipu- which gives the developer the latitude to replace lates clearly the starting date for construction as well certain materials with “similar or better quality” items as its completion date. Check for any extension should the price of that material increase. Ensure that clauses which normally give the developer a few extra such a clause is drafted in a way so as to give you the months to complete without incurring any penalties. final decision on the matter. property such as the relatively discounted price, the choice of selecting a more appealing plot within the 2. Price 7. Building Floor Plan project or other added incentives offered by the The agreement should state clearly the price, the Ensure that a floor plan is also attached to the main developer to early buyers. payment terms and the payment method. Ideally, in a documents. Again be wary of clauses in the agree- construction agreement this should be listed as a ment which allows the developer to “modify” the floor As you would with any property acquisition, carrying schedule. It should also be calculated by units such plan but keeping it ‘similar’ to the plan agreed upon. out proper due diligence on the pre-construction as per square meter or square wah as plot size may uying an Off-Plan Property You will want to be aware of such deviations whether B development is by no exception, very important. Apart wary after completion. Be wary of additional charges Thailand is seeing a current surge in housing and minor or not and the agreement should be drafted to from title deed checks, you may wish to also check on that you have not discussed with the developer. condominium developments despite the slight down- reflect this. turn in the economy. The demand for these projects the history of the developer, their financial standing or by foreign investors is still strong, particularly in tradi- any previous projects they have developed. You can 3. Payment Penalties 8. Recitals tionally popular markets such as Bangkok, Phuket, check if the developer has applied for any necessary Check that the penalties for default of payment are Ensure that in the recital or in the beginning of the Pattaya and Hua Hin. Pre-construction or off-plan required for development or if an environ- not too burdensome on you. Terms such as immedi- agreement, it states that the developer is the rightful properties have increased significantly whereas the mental impact study has been conducted on the ate rescission of contract and retaining the money you owner of the land in question. If they don’t, you should secondary property markets have remained relatively project as these licenses give you some automatic have already paid are not uncommon but there should address the concern in the fine print or by adding an stable. This is not exceptional in Thailand as the rest protection under Thai law. You can also conduct your be a period given to you to remedy this default. addendum by inserting language such as if the devel- of the world have for many years embraced own investigation into the values and costs of the oper does not currently hold title, the agreement may pre-construction investment for its highly attractive property or you may want to have an independent be rescinded by the buyer along with full refund. buy low and sell high scenario. Regardless of this surveyor appraise the property or project for you and 4. Developer’s Default trend, in order to protect your future investment and compare this with the figures given to you by the developer. Ensure that you have some recourse to a full refund in interest with such types of acquisitions, there are the event that the developer does not complete the 9. certain things to look out for when buying a construction due to insolvency or for any other Many things can happen in the future so it is useful to pre-construction property here in Thailand. Contracts in Thailand reason. have an exit clause should your plans change. An It is interesting to note here that the Thai approach to assignment clause allows you to transfer the obliga- contracts in general is linked to its cultural importance 5. Late Completion tions of the agreement to a third party. Note the to relationships between parties. Back home, we administration fee due to the developer for this action. What is Pre-Construction Penalties should be given to you if the completion is place great faith on what is written on paper whereas An assignment clause may also allow you the option late. This is normally deducted from the final payment in Thailand, far greater emphasis is given to relation- to ‘flip’ the property should the market be conducive. Acquisition? due upon completion. Penalty rates vary greatly in Firstly, pre-construction real estate acquisition is the ships itself. However, throughout the many years of Thailand although for condominiums there is a daily practice of buying properties very early on in the dealing with international clienteles, Thailand has 10. Alternative Dispute Resolution minimum penalty of 0.01% of the total unit price. For construction process. Developers are selling these shifted its approach to accommodate a more com- homes and villas, the penalties tend to be around the No matter how careful you are or how good your future properties to customers in order to finance the prehensive type of document. A “Boston lawyer” style 3,000 THB to 5,000 THB per day figure. relationship is with the developer, a dispute may arise. development itself. The customers, on the other of contract drafting may still not work too well here The agreement should have an arbitration clause so hand, are banking on the appreciation of the property and it is still common for Thai parties to give you a 2 settle any disputes. Arbitration is generally less costly once the land has been sub-divided and all infrastruc- to 3 page type contract for all types of matters. This is and formal compared to court proceedings. tures and amenities have been put in place. There are based on the tradition that the contracts are just an certainly advantages to buying a pre-construction outline of the principles and serves as the basis of the

105 1111 Developments relationship. However, we are much more used to seeing a contract as an exhaustive list of all the rights and obligations Developments which allows for all possibilities and contingencies. So it may be good to keep this in mind when dealing with contracts in Thailand although you will generally find they can be quite accommodating to amendments if your relationship with them is good.

Contracts are just an outline of the principles and serve as the basis of the relationship. However, we are much more used to seeing a contract as an exhaustive list of all the rights and obligations which allows for all possibilities and contingencies. So it may be good to keep this in mind when dealing with contracts in Thailand although you will gener- ally find they can be quite accommodating to amendments if your relationship with them is good. Developments What to Look Out for in a Pre-construction Contract?

There are some fundamental elements which should be included in every pre-construction contract. These 6. Building Speci cations are, among others: The contract should have a comprehensive list of all the materials being used in the construction including 1. Time frame its quality, quantity and model. Usually, the more detailed the better. Be wary of substitution clauses An agreement should have a time frame which stipu- which gives the developer the latitude to replace lates clearly the starting date for construction as well certain materials with “similar or better quality” items as its completion date. Check for any extension should the price of that material increase. Ensure that clauses which normally give the developer a few extra such a clause is drafted in a way so as to give you the months to complete without incurring any penalties. final decision on the matter. property such as the relatively discounted price, the choice of selecting a more appealing plot within the 2. Price 7. Building Floor Plan project or other added incentives offered by the The agreement should state clearly the price, the Ensure that a floor plan is also attached to the main developer to early buyers. payment terms and the payment method. Ideally, in a documents. Again be wary of clauses in the agree- construction agreement this should be listed as a ment which allows the developer to “modify” the floor As you would with any property acquisition, carrying schedule. It should also be calculated by units such plan but keeping it ‘similar’ to the plan agreed upon. out proper due diligence on the pre-construction as per square meter or square wah as plot size may uying an Off-Plan Property You will want to be aware of such deviations whether B development is by no exception, very important. Apart wary after completion. Be wary of additional charges Thailand is seeing a current surge in housing and minor or not and the agreement should be drafted to from title deed checks, you may wish to also check on that you have not discussed with the developer. condominium developments despite the slight down- reflect this. turn in the economy. The demand for these projects the history of the developer, their financial standing or by foreign investors is still strong, particularly in tradi- any previous projects they have developed. You can 3. Payment Penalties 8. Recitals tionally popular markets such as Bangkok, Phuket, check if the developer has applied for any necessary Check that the penalties for default of payment are Ensure that in the recital or in the beginning of the Pattaya and Hua Hin. Pre-construction or off-plan licenses required for development or if an environ- not too burdensome on you. Terms such as immedi- agreement, it states that the developer is the rightful properties have increased significantly whereas the mental impact study has been conducted on the ate rescission of contract and retaining the money you owner of the land in question. If they don’t, you should secondary property markets have remained relatively project as these licenses give you some automatic have already paid are not uncommon but there should address the concern in the fine print or by adding an stable. This is not exceptional in Thailand as the rest protection under Thai law. You can also conduct your be a period given to you to remedy this default. addendum by inserting language such as if the devel- of the world have for many years embraced own investigation into the values and costs of the oper does not currently hold title, the agreement may pre-construction investment for its highly attractive property or you may want to have an independent be rescinded by the buyer along with full refund. buy low and sell high scenario. Regardless of this surveyor appraise the property or project for you and 4. Developer’s Default trend, in order to protect your future investment and compare this with the figures given to you by the developer. Ensure that you have some recourse to a full refund in interest with such types of acquisitions, there are the event that the developer does not complete the 9. Assignment certain things to look out for when buying a construction due to insolvency or for any other Many things can happen in the future so it is useful to pre-construction property here in Thailand. Contracts in Thailand reason. have an exit clause should your plans change. An It is interesting to note here that the Thai approach to assignment clause allows you to transfer the obliga- contracts in general is linked to its cultural importance 5. Late Completion tions of the agreement to a third party. Note the to relationships between parties. Back home, we administration fee due to the developer for this action. What is Pre-Construction Penalties should be given to you if the completion is place great faith on what is written on paper whereas An assignment clause may also allow you the option late. This is normally deducted from the final payment in Thailand, far greater emphasis is given to relation- to ‘flip’ the property should the market be conducive. Acquisition? due upon completion. Penalty rates vary greatly in Firstly, pre-construction real estate acquisition is the ships itself. However, throughout the many years of Thailand although for condominiums there is a daily practice of buying properties very early on in the dealing with international clienteles, Thailand has 10. Alternative Dispute Resolution minimum penalty of 0.01% of the total unit price. construction process. Developers are selling these shifted its approach to accommodate a more com- No matter how careful you are or how good your future properties to customers in order to finance the prehensive type of document. A “Boston lawyer” style relationship is with the developer, a dispute may arise. development itself. The customers, on the other of contract drafting may still not work too well here The agreement should have an arbitration clause so hand, are banking on the appreciation of the property and it is still common for Thai parties to give you a 2 settle any disputes. Arbitration is generally less costly once the land has been sub-divided and all infrastruc- to 3 page type contract for all types of matters. This is and formal compared to court proceedings. tures and amenities have been put in place. There are based on the tradition that the contracts are just an certainly advantages to buying a pre-construction outline of the principles and serves as the basis of the

1010 611 7 Thai Property for theduration ofthesuperficies. tered right giving you an inalienable right on the property most regis- the fully a is it that of is superficies a of features one salient this, all Despite party. new the with Office Land the at right the of re-registration a requires other to and owner transferred land the of consent the need will but parties be also can it rights, proprietary loved your to ones unless drafted otherwise in the transferable agreement. Like all fully is It heirs. your on ing A positive characteristic of a superficies is that it is bind- Superficies e Benefitsof ports. Thereisalsoatransfertaxof1.5%involved. pass- and cards ID book, registration house deed, title land the others, among including, documents relevant to need attend will the Land Office to register parties the right along with involved the All Thailand. in transfers proprietary other any to similar is superficies registering the land or the person granted the right. The process of of owner the either of life for or years) 30 of maximum (a planta- time of period a for or granted be may right structures This tions’. ‘buildings, the land the on to own nationality, of irrespective individual, an to granted be can which right a essentially is It CCC. the of 1410 Section under person a to granted be may Superficies Today Superficies inailand the roleitplaysinThaipropertylaws. mistrust do, they if even and, existence its of aware not are buyers many appellative, However, unusual English- this Thailand. of because many throughout offices in law amusement speaking of source constant good example of this. Pronounced su-per-fi-shē a is superficies of right The altogether. planet another of laws with dealing like feel sometimes may Thailand from us of in laws property with dealing those jurisdictions, law common For Kingdom. the within laws all of foundation legal the sets (CCC) Code Commercial and nental Europeanlaws.Likemanycivilsystems,theCivil conti- on largely based is Thailand in system legal The What are Superficies?

z, it is a e Downside the termderives fromancientRomanlaw. Inmostof concepts, law civil most Like enjoyment’. and ‘use into translated literally is which fructus et usus the terms Latin from comes term The systems. legal common to accustomed more those to foreign quite be may which concept law civil another is it yu-ze-frukt, Pronounced history.in rich is which right property legal a is What are ? most the effective safeguardforthispurpose. be to appears superficies laws, Thai under afforded rights proprietary the all foreigner.Of a as tion may superficies spouse in your favor to give you more added Thai protec- Your a register spouse. and basis a on property a Thai purchase a have you if useful extremely be to prove may However,superficies seller. willing a also but property right the just not find to a tion essentially is take some extra time, work and, not what to mention, frustra- buying about ‘personal’ right over a ‘real’ right, happy at least in theory. It may too all and wipe their hands free forever. Buyers also don’t feel land the of liabilities and rights all transfer to want just they because concept this with comfortable not often are Sellers sea. the by found you on property perfect that superficies a grant find to to willing difficult developers it or find sellers may you this, to Due practice. common not is system, civil a being Thailand despite superficies, of granting The acceptance. of lack a from suffers It superficies. with problem major one is There at aminimumisavailableasanalternative. foreign nationals, a significant aspect to consider, which many for is, This rights. such holding nationals foreign in benefit of a superficies property is that there are no limitations on a to key title the Therefore, being. time the for good least at Thailand, get to difficult more more becoming and is it words, other In genuine. indeed Office to ensure the Thai shareholders in a company are gent measures have also been put in place by the Land nominee shareholders to buy and own land. More strin- have government Thai been clamping the down on the use so, of local companies and or year past the Over forest, mineorquarry.” entitles quarry the to usufructuary the exploitation of or the mine forest, the a of usufruct to “the that clarify to entitled further is usufructuary the , use and enjoyment of the property.” It goes which of virtue “an that by usufruct states a to subjected be may it property immovable Here 1417. section in codified is it where Code Commercial and Civil its in principle same property from belonging toanotherperson.Thailandhasadoptedthis benefit or profit derive and use to right legal the as defined is it environment, law civil today’s However, theremaybe awayaroundthishurdle. As such permit may succession rights. contract drafted well a where cies superfi- and leases as such Thailand in rights property other a to compared it when makes option favorable This less heirs. slightly your to on passed be cannot usufruct terminates upon your the usufructuary’s demise so it of parties a to right third the that noted be to should However,it choice. usufruct the of right your fer you as the usufructuary have the legal authority to trans- Code, Commercial and Civil the of 1422 section Under Transferred? Can Usufructs be nated, thepropertymustbereturnedtoowner. termi- is usufruct the when However, this. from profits obtain and parties other to property the lease also may you usufructuary, a As it. from income rental a receive also means that you can safely rent out the property and providing youwithgreatersecurityontheproperty. This Certificate Registration House a for apply to you allow erty to other third parties. Another benefit is that it would the usufruct, the owner cannot sell or transfer the prop- ary or for a maximum of thirty years. During the period of A usufruct can be registered for the life of the usufructu- property.the to enjoyment the usufructuary the offer to buyers. home Office Land local the at registered is and right property for legal a is It lease. available a like ways many codes in works Usufruct civil of arsenal the in tool another is It Thailand. in purchasers property foreign to available options more are there that notion Legal ramblings aside, all this comes down to the simple Foreign Property Buyers? What itMeans for of restoringthe propertyintoitsoriginalcondition. cost the cover fully to property the on insurance proper tion. It is in the usufructuary’s interest to have good and restora - its for paid is ‘compensation’ unless owner the to back reverts and terminates usufruct the that mean will accidents other any or fire by caused property the of destruction The reason. good for also is This ance. insur- the maintain to bound duty are you exist, already you to obtain insurance on the property and if insurance usufruct is insurance. The owner has the right to compel Another important factor to consider when talking about Office. Land the at usufruct the with along registered be also should This future. the in misunderstanding any avoid to inventory an in usufruct the is in included items the list depreciation the or to prudent fault is it this, to Due use. your reasonable by caused not is it can that you unless prove property the of value in significant depreciation or destruction any for responsible are You permitted to make any major alterations on the property. property unless this is part of the deal. Also, you are not the on mortgage outstanding no is there check to sure be so it upon owing interest any as well as duties and petty repairs. This also includes payments for any taxes any including maintenance proper in property the tain mind. As a usufructuary, you have in an obligation keep to main- to things few a are there Thailand, in property a on usufruct a procuring about thinking are you When How toAvoid anyProblems to heirsandnorcanitbeinherited. left be cannot estate life a of owner person’sThe a life. where the ownership of been the land is given for the duration is has estate life A UK. it the in trusts however,of law the by replaced US, the in jurisdictions some in use in still is which estate, life a to similarity shares Usufruct vs.CommonLaw ucsin lnig u i cn e fetv i done if effective be correctly. can it but planning succession of method complex rather a is This itself. usufruct the a lease on a property granted by a usufructuary survives that interpreted have Thailand in Courts usufruct. the of their provide termination the after lease year thirty further a with heirs to able be may they technically parties, usufructuaries are allowed to lease the property to other

10 Thai Property Thai 9 Thai Property the roleitplaysinThaipropertylaws. mistrust do, they if even and, existence its of aware not are buyers many appellative, However, unusual English- this Thailand. of because many throughout offices in law amusement speaking of source constant good example of this. Pronounced su-per-fi-shē a is superficies of right The altogether. planet another of laws with dealing like feel sometimes may Thailand from us of in laws property with dealing those jurisdictions, law common For Kingdom. the within laws all of foundation legal the sets (CCC) Code Commercial and nental Europeanlaws.Likemanycivilsystems,theCivil conti- on largely based is Thailand in system legal The What are Superficies? for theduration ofthesuperficies. tered right giving you an inalienable right on the property most regis- the fully a is it that of is superficies a of features one salient this, all Despite party. new the with Office Land the at right the of re-registration a requires other to and owner transferred land the of consent the need will but parties be also can it rights, proprietary loved your to ones unless drafted otherwise in the transferable agreement. Like all fully is It heirs. your on ing A positive characteristic of a superficies is that it is bind- Superficies e Benefitsof ports. Thereisalsoatransfertaxof1.5%involved. pass- and cards ID book, registration house deed, title land the others, among including, documents relevant to need attend will the Land Office to register parties the right along with involved the All Thailand. in transfers proprietary other any to similar is superficies registering the land or the person granted the right. The process of of owner the either of life for or years) 30 of maximum (a planta- time of period a for or granted be may right structures This tions’. ‘buildings, the land the on to own nationality, of irrespective individual, an to granted be can which right a essentially is It CCC. the of 1410 Section under person a to granted be may Superficies Today Superficies inailand z, it is a e Downside the termderives fromancientRomanlaw. Inmostof concepts, law civil most Like enjoyment’. and ‘use into translated literally is which fructus et usus the terms Latin from comes term The systems. legal common to accustomed more those to foreign quite be may which concept law civil another is it yu-ze-frukt, Pronounced history.in rich is which right property legal a is Usufruct What are Usufructs? most the effective safeguardforthispurpose. be to appears superficies laws, Thai under afforded rights proprietary the all foreigner.Of a as tion may superficies spouse in your favor to give you more added Thai protec- Your a register spouse. and basis freehold a on property a Thai purchase a have you if useful extremely be to prove may However,superficies seller. willing a also but property right the just not find to a tion essentially is take some extra time, work and, not what to mention, frustra- buying about ‘personal’ right over a ‘real’ right, happy at least in theory. It may too all and wipe their hands free forever. Buyers also don’t feel land the of liabilities and rights all transfer to want just they because concept this with comfortable not often are Sellers sea. the by found you on property perfect that superficies a grant find to to willing difficult developers it or find sellers may you this, to Due practice. common not is system, civil a being Thailand despite superficies, of granting The acceptance. of lack a from suffers It superficies. with problem major one is There at aminimumisavailableasanalternative. foreign nationals, a significant aspect to consider, which many for is, This rights. such holding nationals foreign in benefit of a superficies property is that there are no limitations on a to key title the Therefore, being. time the for good least at Thailand, get to difficult more more becoming and is it words, other In genuine. indeed Office to ensure the Thai shareholders in a company are gent measures have also been put in place by the Land nominee shareholders to buy and own land. More strin- have government Thai been clamping the down on the use so, of local companies and or year past the Over forest, mineorquarry.” entitles quarry the to usufructuary the exploitation of or the mine forest, the a of usufruct to “the that clarify to entitled further is usufructuary the possession, use and enjoyment of the property.” It goes which of virtue “an that by usufruct states a to subjected be may it property immovable Here 1417. section in codified is it where Code Commercial and Civil its in principle same property from belonging toanotherperson.Thailandhasadoptedthis benefit or profit derive and use to right legal the as defined is it environment, law civil today’s However, theremaybe awayaroundthishurdle. As such permit may succession rights. contract drafted well a where cies superfi- and leases as such Thailand in rights property other a to compared it when makes option favorable This less heirs. slightly your to on passed be cannot usufruct terminates upon your the usufructuary’s demise so it of parties a to right third the that noted be to should However,it choice. usufruct the of right your fer you as the usufructuary have the legal authority to trans- Code, Commercial and Civil the of 1422 section Under Transferred? Can Usufructs be nated, thepropertymustbereturnedtoowner. termi- is usufruct the when However, this. from profits obtain and parties other to property the lease also may you usufructuary, a As it. from income rental a receive also means that you can safely rent out the property and providing youwithgreatersecurityontheproperty. This Certificate Registration House a for apply to you allow erty to other third parties. Another benefit is that it would the usufruct, the owner cannot sell or transfer the prop- ary or for a maximum of thirty years. During the period of A usufruct can be registered for the life of the usufructu- property.the to enjoyment the usufructuary the offer to buyers. home Office Land local the at registered is and right property for legal a is It lease. available a like ways many codes in works Usufruct civil of arsenal the in tool another is It Thailand. in purchasers property foreign to available options more are there that notion Legal ramblings aside, all this comes down to the simple Foreign Property Buyers? What itMeans for of restoringthe propertyintoitsoriginalcondition. cost the cover fully to property the on insurance proper tion. It is in the usufructuary’s interest to have good and restora - its for paid is ‘compensation’ unless owner the to back reverts and terminates usufruct the that mean will accidents other any or fire by caused property the of destruction The reason. good for also is This ance. insur- the maintain to bound duty are you exist, already you to obtain insurance on the property and if insurance usufruct is insurance. The owner has the right to compel Another important factor to consider when talking about Office. Land the at usufruct the with along registered be also should This future. the in misunderstanding any avoid to inventory an in usufruct the is in included items the list depreciation the or to prudent fault is it this, to Due use. your reasonable by caused not is it can that you unless prove property the of value in significant depreciation or destruction any for responsible are You permitted to make any major alterations on the property. property unless this is part of the deal. Also, you are not the on mortgage outstanding no is there check to sure be so it upon owing interest any as well as duties and petty repairs. This also includes payments for any taxes any including maintenance proper in property the tain mind. As a usufructuary, you have in an obligation keep to main- to things few a are there Thailand, in property a on usufruct a procuring about thinking are you When How toAvoid anyProblems to heirsandnorcanitbeinherited. left be cannot estate life a of owner person’sThe a life. where the ownership of been the land is given for the duration is has estate life A UK. it the in trusts however,of law the by replaced US, the in jurisdictions some in use in still is which estate, life a to similarity shares Usufruct vs.CommonLaw ucsin lnig u i cn e fetv i done if effective be correctly. can it but planning succession of method complex rather a is This itself. usufruct the a lease on a property granted by a usufructuary survives that interpreted have Thailand in Courts usufruct. the of their provide termination the after lease year thirty further a with heirs to able be may they technically parties, usufructuaries are allowed to lease the property to other

8 Thai Property Thai 9 Villas types ofcontractsdrafted. able to consult with a legal professional in getting these advis- be may It period. year 30 full the for agreement lease new a into enter lessee new the have and lessor the with have you that lease original the extinguish to natively, it is also possible under certain circumstances earlier.Alter- highlighted problems the by limited again new the by lessee and the again lessor. These made renewable terms are be once to have will contract the in terms renewal subsequent Any period. transferred this is during lease the of period remaining the only and again Office Land effect the transfer. It is worth noting here, the however, that attend An will parties procedure. ested straightforward a quite assignment agreement is is usually prepared and all inter- villa a in interest leasehold existing an assigning Transferringor Transfer ofLeaseholdInterest Office andregisteranother30yearsagain. Land the attend to have will parties the all and expires lease the period, this of end the At itself. Office Land the at registered is period year 30 the are only Therefore, terms renewal The so. do to parties period. the by obligation contractual a merely this after lease the of extinguishment automatic an is there fact, In period. lease year 30 the after leases of renewal automatic no indeed is There pitches. sales zealous over and myths by shrouded been long has lapsed has period lease further year 30 original the after happens What terms. year 90 include typically technically,or in, 60 resulting periods lease renewable contracts lease However, period in Thailand for a residential property is 30 years. lease maximum The (CCC). Thailand of Code mercial Com- and Civil the by governed is interest Leasehold Maximum LeaseholdPeriod these of some implications. highlight to hopes article This tions. implica- term longer its reservations on buyers many by some expressed still are its there popularity, despite growing However, vehicle. incorporated locally in a property acquiring stricter stance on foreign ownership through the use of government’s Thai the of to part in due is This method Thailand. common most In recentyears,leaseholdinterestisfastbecomingthe A ViableOptioninThailand? Leasehold VillaInvestments:

More SecureInvestment Ways toMakeyourLeasea future. the in approach ache conservative This should save much headache and quite possibly, bonus. heart- be would a that considered then terms renewable your exercise to able be you Should calculations. your making baseline when good amount a is the years 30 exceed first far the Using will invested. years 30 the over yield rental the that sure make to important is it so close a to draws term lease the as value in depreciate will villa Due to the nature of leases, there is a likelihood that the all after expenses havebeenconsidered. surplus return the term, of lease wary be the should on buyers imposed restrictions the to Due and thus investments of this nature is not for everyone. lease. the of Indeed, 30 years may not seem like such a long period duration inadequate the to mostly due is this and titles leasehold to stigma certain a is There foreigners. for option investment viable a is remains it whether question the but Thailand in titles leasehold of limitations the of some highlighted have we far So A GoodInvestment? o hog i t mk sr yu nw ht o are you what know getting yourselfinto. you sure make to it through go to lawyer a get or carefully this through go to advisable is It (CC&R). Restrictions and Conditions Covenants, the of the as US regulations the in known commonly more developer,or and rules the to subject naturally the actual ownership of the property as a whole. This is met as the be buyers themselves have shall relative control This lease over the leases. on extensions their further that of ensures top on protection further them provides then which company this also of will shares buyers their receive turn, in and site the own to up more often than not the off-shore company may be set example, an in As Chicago. used or York New commonly as such co-op cities quasi a as ways some in property is by the use of an off-shore company. It works developers in order to protect their buyers’ rights on the villa respectable some by offered being option Another affords greaterinterestonthephysicalstructureitself. right this as villa the on security better provide to able be may title leasehold a with conjunction in used ficies your protect further leasehold interests on the villa. can Rights such as a super- which rights are codified there terms, other broad In Australia. and US UK, the tomed to the system of countries such as accus- more are who those to unfamiliar be may used European legal system and therefore some of the terms continental the on generally based is law property Thai 11 Finance Meet Our Senior Property Lawyer 10 Phone / Mobile 02 254 8900 / 084 021 9800 Email [email protected] Website https://www.siam-legal.com SIRICHOT CHAIYACHOT SIRICHOT at Law Attorney Khun Sirichot “Beer” Chaiyachot joined Siam Legal in 2008, initially initially 2008, in Legal Siam joined “Beer”Sirichot Khun Chaiyachot all in Involved Section. Resolution Dispute and Litigation our in drafting the in assisted he process, resolution dispute the of aspects of demand letters, the preparation court the to documentation support and litigation our senior for of case files, submission of lawyers. our to moved he when challenge new a on took he 2010, During the Propertynavigate them helping and clients advising Section, real acquiring and transacting of landscape complex sometimes property Thailand. Through his in hard work, ability exceptional and experience, he has been instrumental in the practices Property and diverse most trusted of the one Section into development of our to private single from clients of range a with dealing Thailand, in the made was he this, of recognition In developers. corporate large of our Propertyhead Associate in 2015. and a Senior Section Office Address Two Pacific Place Building, 18th Floor, Unit 1806, 142 Sukhumvit Road, Klongtoey, Bangkok 10110 As a lawyer with a great deal of experience in the field, he is able to expertly guide clients through the often difficult and difficult often the through clients guide expertly to able is he field, the in experience of deal great a with lawyer a As Thai property opaque landscape of law and is variousa at landwell theoffices,known ministerial figure departments knowledgeable highly is Sirichot Khun work. his of course the during attends regularly he offices government other and art the wide a in skilful and Thailand, drafting of in ownership and transfer land of practices and mechanisms the in Loan Agreements, Agreements, including Sale and Purchase of practice, this area to critical documents of legal range Thai Wills. and Mortgage Agreements Lease Agreements, Khun Sirichot earned his Law degree at Naresuan University International College and was admitted to the Thailand Thailand the to admitted was and College International University Naresuan at degree Law his earned Khun Sirichot welcomed that household a in up grown Having 2012. in license public notary his obtained He 2011. in Association Bar western with conversant fully and English in fluent also is he Switzerland, and Norway from students exchange foreign culture. Photos Are Printed With Permission Raimon Land PLC: http://www.raimonland.com The Lakes At Phoenix: www.thelakesatphoenix.com

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