Purchasing a pre-construction condominium unit in Thailand is generally considered a good investment. 

Purchasing a pre-construction condominium unit in Thailand is generally considered a good investment.  One key to obtaining peace of mind is to inspect the pre-construction contract carefully, making sure there are certain provisions and that there are no ambiguities in the wordings.  The following ten questions should be your guide in looking over the contract.

1.  What is the time frame for the construction project? Read the contract carefully for stipulations such as the date of construction and date of completion.  Watch out for an extension clause which does not charge the developer penalties for delays in the completion of the construction.

2.  How much would I pay and what are the payment terms and options? A carefully-worded pre-construction contract should specify not only the price you must pay but how and when you would pay.  This can best be outlined in the form of a schedule which details the amount and the payment methods.  Prices should be calculated in terms of units such as per square meter.  Watch out for and discuss with your developer any additional charges you notice.

3.  What penalties await me with delayed or default payments? It is normal for you to be charged with some penalties should you be delinquent in your payments.  However, the terms and conditions for these penalties should at least be fair to you.  For instance, is the time allowance fair enough for you?

4.  What penalties await the developer if the completion of the project is delayed? Just as you are charged with penalties if you are late in your payments, even so should the developer be charged with penalties if the building is not finished on the agreed schedule.  In Thailand, the penalties usually range from 3,000 to 5,000 Bahts per day of delay-- representing roughly 0.01% of the total unit price.

5.  Can I be refunded should the developer abort the project? In a buy-off plan, one can never eliminate the possibility of a project being stalled or aborted due to insolvency or other causes.  In the event of such an unfortunate incident, there should be a way for you to be refunded of the payments you have made so far.  Look for such a refund clause in your contract.

6.  How specific is the building specification? Another very important thing to look for in a contract is a meticulously drafted building specifications list.  Ideally, there should be a comprehensive list of all materials and there should be no room for substitutions which would give the developer too much freedom to use other materials for example.

7.  Is the building floor plan clearly outlined? The floor plan should be attached to the main documents and should be strictly followed by the developer.  Be wary of clauses which allow the developer to “modify” the floor plan.

8.  Is the property owned by the developer? In the recital or beginning of the agreement, make sure it is clearly stated that the developer is the rightful owner of the land on which the building is to be constructed.  If there is no such stipulation, insert an addendum which says that if the developer does not hold the title, the agreement may be rescinded and you would be refunded fully.

9.  Can I transfer the property to a third-party? The contract should give you room to change your mind—such as when you decide to transfer the property to another party.  Look for such an exit or assignment clause in the contract, as you’ll never know how much of a help that would be in the future.

10.  Is there an arbitration clause? An arbitration clause allows for a way to settle disputes that may arise between you and the developer without necessarily going to the costly and laborious proceedings of the court.  Look for this stipulation in the contract.