12 Things to Remember When Buying a Presale Condo in Thailand
Thailand has seen a great deal of investment in real estate, especially in the production of condominiums. This has led a lot of foreigners to look for investment opportunities in this market, either for speculative reasons or just for personal use. But where financial opportunities lie, the opportunity to get scammed also exists.
Thailand has seen a great deal of investment in real estate, especially in the production of condominiums. This has led a lot of foreigners to look for investment opportunities in this market, either for speculative reasons or just for personal use. But where financial opportunities lie, the opportunity to get scammed also exists. The rights of the buyer and seller of a condominium should be covered in a purchase and sale agreement. But in the past, some foreigners encountered problems after completing a deal due to the developer’s lack of development funds, problems with contractors, or other external problems, which could result in the project stalling or not completing at all. In some cases, some unscrupulous developers have come with purchase and sale agreements which do not favor the rights of buyers.
Once the government of Thailand became aware of this worrisome trend, they set forth to establish a standard format for purchase and sale agreements of condominium units. This contract falls under section 6/2 of the condominium act (1979) and the amended condominium act (2008). Sales and purchase agreement under the new act shall cover the following terms and conditions:
- Developers should warranty whether they own the land and declare whether they have any loans on the land or if it is under a mortgage.
- Developers should warranty whether they have received a construction permit and whether the building will be registered as a condominium at its completion.
- State the common property and facilities to be provided by the developer.
- State the unit price and payment terms.
- State the completion date of the project and the transfer of ownership registration date.
- It should provide buyers the right to assign their rights to other persons, under the agreement, without incurring any additional fees from the developer.
- The developers should use standard materials and equipment and comply with approved construction plans.
- Developers are allowed to suspend the construction, for a period of one year, in the event of force majeure.
- Developers are obligated to install utility meters.
- Developers should comply with their tax obligations and pay half of the registration fee.
- Buyers will be charged a maximum of 15% interest in the event of a default, with the total amount not exceeding 10% of the purchase price.
- Developers are obligated to return all money to the buyer, at the default interest rate, in the event they are unable to transfer the unit to the buyer within the prescribed timeframe.