Helpful Tips in Buying a Condominium in Bangkok
Just the thought of Bangkok would often give people the chills and the thrills of its majestic tourist spots. It wasn’t named as Thailand’s “City of Lights” for nothing. In fact it is also referred to as the “Venice of the East” during the time when its primary means of transportation was by boat. Bangkok definitely is a palette of different colors—from its authentic Asian cuisine, its floating markets where rowboats carry an assortment of fruits and vegetables, the famous “Reclining Buddha”, the monks walking barefoot in the streets begging for alms, to the ever growing economy that is not only Thailand’s commercial capital but also as the key center of Asian business.
Bangkok is definitely a place to be. Recently, it has been reported that there was a large influx of foreign immigrants, long-term residents, and expatriates from all over the world that have chosen Bangkok as their home or business location. As consequence, real estate has also become a rising industry as the population is in need of a home. The most practical choice, even elsewhere in the world, is getting a condominium.
It is only right that you take time in considering important factors before buying a condominium so you will get your money’s worth and the location that fits your needs. After all, getting a condo unit is a rather simple process in Thailand once you equip yourself with the proper documents. There may be some challenges in certain aspects of the transactions particularly when the terms and conditions of the Sale and Purchase Contract are still being drafted and negotiated for. A foreign buyer could easily solve this issue though by hiring professional advice from a lawyer who is experienced with handling property transfer and property contract drafting. Before closing any contract, one should make sure that the contract contains the number of the unit being purchased to avoid future conflict or confusion.
This is only the tip of the iceberg so read on to learn more on how to pick the best condominium unit just for you.
Choosing a Condominium
- Setting up a Business. In Thailand, applying for a license to run a business requires a registered office address. It is recommended that you inquire first if the condominium allows the use of the address for business purposes. Otherwise, it is not a good option because most condominiums have a regulation that allows the use of the address for residential purposes only.
- Reliable Developer. One the most important factors to consider is checking the background of the developer. There have been cases that deposits were already paid but the condominium remains inhabitable, incomplete, or simply the developer failed and was not able to start the project. Protecting yourself from scams should be at the top of your list as there is no existing legislation for escrow accounts in Thailand. Taking legal action is only futile because there is no way that your deposit can still be retrieved. It is best then for you to buy a pre-owned unit or to simply buy a unit from a building that is already built.
- Location. Like in any other place, location is always a big factor to be taken into account in real estate. If you want to live in the condominium it is must that you think of accessibility of the place to your office or if you have children, consider its distance from a good school. You may also find it convenient being in a building near the main road especially if you have to commute by means of public transportation or a cab. Its distance from the shopping centers might be a another aspect that you’d like to explore or if you are up for good views you might want to consider if the building is not obstructed by some construction or unwanted neighborhood.
Inspecting the Unit
- Traffic. Check the traffic condition of the area where you plan to acquire a condominium unit. The best way to do this is by observing the situation during rush hour.
- Fire Safety. First off, make sure that the floors are sealed off to prevent fire from rising to other floors. You may know this by identifying the type of material used to divide each floor. Then, inspect the jockey pumps to make sure that there is enough pressure in the sprinkler system. Visiting the mechanic plant room would actually be worthwhile. Also determine if the alarm system is functioning and if the fire exits aren’t blocked by any type of materials.
- Floods and Leaks. Check for any signs of leaks in the ceilings or the windows. This would be easy enough since you would only see if there are discolored areas or surfaces that show water passage. One good way of knowing if the area is flood prone is by checking for sandbags and tidemarks on the outside walls.
- Parking. Determine if there is fixed parking space for your or not when you have a car or if you are planning to get one. You don’t want to get into trouble in safeguarding your car.
- Legal. It is best that you secure a copy of the Condominium Juristic Person (CJP) accounts and verify the credential of its management. Know the CJP charges and the number of accounts receivable.
- Demographics. Inquire about the ratio of foreign owners to its local counterparts. Remember that not more than 49% of the total unit space (sealable area apart from the common areas of the condominium) can be owned by foreigners.
Preparing the Required Documents
Documents Specifics 1) Passport Prepare your valid passport. 2) Power of Attorney This is needed when a foreign buyer designates a representative to go to the Land Office on his behalf. An official Tor-DOR 21 is required to appoint a proxy. 3) FET document This is a bank certification proving that you have legally brought foreign currency into the country for the purpose of purchasing a condominium 4) Marriage/divorce certificate This is needed to document civil status when applicable.
1) Personal documents
Types of property found in Thailand
If you are looking for accommodation in Bangkok, you have to first get yourself well versed with the type of property available here. This is because the properties here are called differently when compared to names of housing options in western countries. So take a look at the residential property options offered in Thailand.
Single house: - These houses are referred to as detached houses in the west. These houses stand on its own plot of land and are separated from its neighbors in some way or the other. Comparatively, these houses are the most expensive for both rental and purchase reasons.
In fact, the more expensive and higher end single houses come with private swimming pools and other luxuriates, at a premium amount. These houses, especially the new and modern types are not seen much in downtown Bangkok.
Townhouse: - These houses are called terrace or semi-detached houses in the west. They are found mostly in ‘moo baan’s’ or gated communities, usually with a full time security guard protecting the property. Sometimes, they may also come with a communal swimming pool.
While these houses are seen most in downtown area of Bangkok, there are few new structures found. It is the older, and more tired looking townhouses that you get to see more around Thailand.
Shop houses: - There is no equivalent to these houses in the west as shop houses are found mainly in Asian countries. These are houses you can most probably find on both sides of the road, practically all over Asia.
The origin of this accommodation is Chinese and is basically a terrace form of house where you find six to eight shop houses in a row. You can find the shop in the ground or street level while its owners live in quarters on the floors above.
These houses are not advised for foreigners because of its single skin walls and the traffic noise you here from outside. However if you are lucky, you may find exceptions, and perhaps will like or consider staying in a shop house.
Apartments:-Apartments are built in blocks, and are usually low rise. There are also some high rise apartments available, where the entire block is usually owned by a single family or company.
As these apartments are owned by a single entity, utilities for the building are paid by this entity. This often leads to a surcharge on utilities. Usually, there are no common area maintenance fees in apartment buildings as this amount is already included in the rent.
This leads to free of charge repair and maintenance of the apartment. Most apartment buildings also offer a swimming pool and full security on its site, along with fitness rooms in some buildings too.
Serviced apartments: - These apartments are similar to normal apartments. The only difference here is that it comes with amenities and services you find in hotels. So you may find restaurants on site, linen changes available, a maid to clean your room, a kitchen area with utensils and in addition to this, you are also provided with towels and other requirements you may require during your stay here.
As usual, you may also find a swimming pool, full security on site and fitness rooms too. However all this is usually offered to you at a huge premium. Depending on the building, utility bills may or may not be included in the rental package.
Condominiums: - This is the same condominium you find in the west. They are similar to apartment blocks and are found in large buildings. The only difference here is that they are all individually owned. There are quite a few condominiums in Bangkok, and this is the only property available for freehold acquisition to foreigners.
There is no surcharge in utility bills here, where bills are usually directed to the tenant from the relevant issuers. You may also have to pay a common area maintenance fee, in addition to your monthly rent.
So make sure you find out, and clarify all the additional payments you will have to make per month, including your monthly rent before signing the contract. Condominiums usually have swimming pools and fitness rooms on site, along with optimum security.
The latest condominiums in Bangkok are very luxurious and offer facilities found in 5 star hotels. If you are thinking of buying a condominium, it is better to do so after taking a look at the management.
It is the management that takes care of the facilities offered in the building, and the building in general. If the management is competent enough, the building will be well maintained; otherwise it will end up looking very tired and old very soon.
Tips for choosing the right real estate agent in Bangkok
If you are new to Thailand, and are looking for some accommodation, there is some good news for you. Thailand is a country that offers a renters market. This means that it is fast and easy for you to rent accommodation in Bangkok, for the following reasons:
The first thing you have to know is that though a real estate agent will help you look for your property, you need not pay any commission to the agent. It is the landlord who pays the agency commission.
As real estate agents work for free, you can hire as many real estate agents as you want to rent or even buy a property. However it is advised to stick to one agent once you feel comfortable with one person. This prevents confusion when you go looking for your properties.
With the hundreds of real estate agencies and agents available, you are sure to find someone who will be able to find the right property for you. All you have to do is a search on Google for real estate agencies in Bangkok and you will be provided with more than 200,000 pages to go through. Moreover, as these agencies cater most to expats, they have websites with photo listings for you to take a look at their various properties. And to make communication easy for you, they even have English speaking staff to serve you
Don’t think that as an expat you have to pay more rent than Thai nationals. In fact, not only are your rents similar, landlords prefer having expat tenants and do their best to convince you to sign the dotted line.
It is very interesting to learn that anyone can become a real estate agent in Bangkok. There is no governing body the agent has to become a member of to start serving as a real estate agent.
Anywhere you go, if you mention that you are looking for some accommodation, you are sure to find some freelance agent in the midst with a few properties on hand to show you. Though it is safe to use their services, there is a possibility of their showing you inferior housing options. This is why most expats prefer using the services of professional agents when they look for accommodation.
When you go looking for accommodation, you have the option of looking at 6-8 properties per day for a few days to finally make your choice or you can just take a look at some properties within a day, and fix your deal within a few days’ time.
It is up to you to decide if you have the patience to spend so many days looking for properties, only to return to the first property or save time and just spend a day looking for properties.
Another point you have to remember when you go looking for accommodation in Bangkok is that various agents and agencies have access to the same building. This is because landlords usually contact more than one agency to promote their properties.
Looking around, you will find the same property on various agency websites. This is why you have to view your properties one at a time. This way, if you are not happy with what the first agent shows you, you can inform the second agent what you had seen and thus not waste time seeing the same properties.
Many companies have their own preferred agents who they advise new expats to Thailand to use. However ‘great’ these agents may be to the company, when you are looking for accommodation, it is important that you explain your requirements thoroughly to the agent so that your time is not wasted.
Though you may be suggested some agent by the company, you are at liberty to choose the agency that fits your needs in finding your ideal home. In fact, these agents tend to give you better choices in accommodation as they know you are not obliged to use them. So they work hard to ensure you prefer and use them instead of the company’s preferred agent.
There are also many real estate agents in Bangkok run by foreigners. These are the agents expats tend to turn to while looking for their new homes as the agents understand their needs better. With this better understanding, you need not waste time going in circles looking for accommodation.
Agencies and apartments use the same contracts. While apartment owners will provide their own contract, the rental agency will prepare the contract for condos and houses. If you are from a multinational company, normally you will include a diplomatic clause in your contract.
Moreover, if your company is paying your deposit amount, they will need an additional clause in your contract stating that the deposit amount will be returned to the company at the end of the term. This is for the safety of the company, to ensure that their money is in safe hands and that they will receive it when you terminate your lease with the landlord.
The process for renting properties in Bangkok
As an expat in Bangkok, you will naturally need to rent your accommodation while in Bangkok. You will find that the rental process in Thailand is a much more straightforward procedure than what takes place in other countries like Japan or Singapore.
Unlike most countries where the tenant and the landlord have their own representatives for the deal, real estate agents in Thailand work for both the potential tenant and the landlord of the said property. This reduces confusion, and also makes it easier and faster for you to find a rental property.
When you look for the right property, you have to specify to the agent the type of accommodation you are looking for. The most important aspects to consider while looking for your Bangkok accommodation are as follows:
- If you have children, choose property that is located near your child’s school.
- It would also be good if you could find a place near your workplace, or at least where there is easy access to transportation to your office.
- The accommodation should cater to all your lifestyle pursuits; this means that it should be near or at least have access to transportation to theaters, supermarkets, medicals and the post office.
- Specify the type of accommodation you are looking for; like a townhouse, condo, apartment or a single detached house.
- If you have pets, make sure you find out if it is okay to have your pets stay with you.
- If you have a large family, you will require more bedrooms; so ensure that the property has sufficient rooms for the comfort of your family.
- You can choose between furnished and unfurnished accommodation. Naturally, if you have your own furniture, it is better to opt for unfurnished accommodation; however if you don’t have your own accommodation, a furnished place is a better option for you.
- Last, but not least, tell the agent your budget which the agent has to keep in mind while looking for places, and making negotiations.
Some other aspects to consider before choosing a rental property is its water pressure. If the water pressure is low, you will not enjoy continuous water, and there is actually not much you can do about this. Rentals with air conditioners should be new looking, not noisy and should efficiently cool the room.
Check the surroundings for any ongoing construction that may hamper the enjoyment of your property. Similarly, check out the neighbors as you wouldn’t want to stay in the proximity of noisy, nosy and grumpy neighbors. Find out which pets the other flat owners own so that you can not only tolerate its’ presence, but also to ensure that they go well with your own pet.
With all this information, the agents will provide you with a list of properties that best suit your needs and requirements. It is always better to view only properties you think are feasible for you, instead of wasting time and money viewing all the properties the agent proposes.
If you choose a more reputed real estate agent, they take the effort of picking you from your place of accommodation, and drop you off after viewing all the properties. This saves your time and money as you need not ride round in circles looking for the properties.
The best time to head for viewing of 4 or more properties is in mid morning, when you will be able to avoid the morning and evening rush hour traffic. After viewing all the properties, you will find that based on your preferences, all the properties have their own plus and negative points. You have to rule out the properties with maximum negative aspects, which cannot be modified or changed to your preferences.
It is up to you to decide if you take one or more days for viewing properties as some people are happy with the first property they see while others make their decisions after seeing all the available properties in Bangkok. On an average, it is better to take a look at 6-8 properties, preferably under the guidance of a single agent.
On choosing the right property, the agent has to make an offer to the landlord, including any improvements and additions you need for the property. After some counter offers by the landlord, you will finally reach an amicable contract with amicable rent and terms.
It is the agent who frames a lease contract for the property for the owner, in English language. Make sure you go through it to ensure it has standard terms in them like a lease term of a minimum of a year, a security deposit of a minimum of two months’ rental, that rent should be paid monthly in advance and complete details of the property with the full name of the landlord.
If you have chosen a high end property, you may find your lease document split into two documents where one is for property and the other for furniture. The reason they do this is to minimize the tax liability of the landlord.
Once both you and the landlord agree on the terms of the agreement, a date will be set for signing it. This is when you meet the landlord, and when you have an opportunity to create a good impression on the person. In Bangkok, and other Asian countries, with a good impression, you find it easy to cement a great relationship between two people.
Make sure your agreement is created in triplicate so that one copy is for the tenant, one for the owner and one for agent’s files. You also need to include your passport copy and ID card copy as appendices for the agreement.
As Bangkok is a cash economy, you will have to arrange cash for your deposit payment. It is not possible to use your credit or debit card for making payments. Besides cash, you could however also use a bank transfer or cashier’s check for making payments. However date these documents before your move in date to avoid complications when you move in.
By the time you move-in, the agent will help you with the installation of your internet and cable TV connections, at no cost. Usually, the agent meets you on the day you move in to the property to hand over the keys to you. They will also list out a furniture inventory if the property is a furnished one.
Keep this document safely as it is important to both you and the owner as it mentions the state of the property when you move in. this helps eliminate any arguments you may face about its condition in the future. After you move in, you can expect a call from your agent only after a few days’ time to ensure you are well settled and have no problems.
Besides all these tips, there are some additional points to remember during your rental process in Bangkok.
- It is not advised to negotiate on more than one property at a time. You have to start with your first preference, and it is only if the deal fails should you move on to the second property. You will only spoil both yours and the agent’s reputation by rejecting a property even after the owner agrees to your offer.
- Change agents only if you are not happy with his methods, or have lost confidence in him or her. Remember that you need not pay any fees to the agent for finalizing the deal. It is the landlord who has to pay agent’s fees in the form of commission.
- When you place an offer to the property owner, don’t give insulting offers. Quote something reasonable lest the owner thinks that you are not serious about your bid or proposition.
- There is no strict percentage or rule followed in your negotiations. Basically, the longer a property is empty, the more willing the owner is to negotiate. However if the property has high occupancy rates, don’t expect the owner to budge too much from the offered rate.
- Remember that under no condition at all is it possible to negotiate for a lease term of less than a year with your landlord. It is only in service apartments that you can have lease terms of less than a year; in condos, houses and flats, you have to chalk out a lease contract of a minimum of a year.
Differences between Bangkok apartments and condos
When you go looking for accommodation, you tend to wonder what the difference between an apartment and a condo is. Well the basic difference is that condos are individually owned units while apartments consist of a block of rental units which may be owned by a company, a family or an individual.
If you are wondering if it is better to rent a condo or an apartment, you will like to know that there are pros and cons to renting an apartment over a condo. I have written this article to shed some light on this question that exists in practically every expat looking for accommodation in Bangkok.
When it comes to rental prices, there is not much difference between the rent of an apartment and a condo. The rent of accommodation in Bangkok, or any place for that matter, depends on the location, age of the building, the number of rooms in the building, the size of the unit, the facilities offered in it and its décor and furnishing.
It is not at all dependant on whether you are renting a condo or an apartment. The more rooms there are, the larger and newer the structure is and the better facilities, décor and furnishing in the structure naturally gives you a higher rent.
When it comes to utility bills, it proves to be disadvantageous to rent an apartment than a condo. This is because apartments charge a minimum of about a thousand baht per month for water and a surcharge of about 5-6 baht a unit for electricity.
This is more than the 3.5 baht that is charged for electricity by MEA. This can all lead to a large sum in the form of utility bills at the end of each month. In case of a condo, you will be billed according to the applicable government rate.
In case of condos, you have to pay building management fees as apartments have this accounted for as operating costs in their rates. Building management fees in Bangkok for apartments is between 30 to 60 baht per square meter, and is usually included in the rent. However if you by chance strike a really great deal, at a considerably low rent, it could mean that the landlord does not pay the building management fee.
Basically, whether you rent a condo or an apartment, it depends on who you rent it from. It is rather easy to negotiate the rent with condo owners as they are more flexible when compared to apartment owners. Apartment owners tend to charge a standard rate for rent, which is usually non-negotiable.
You just have to ensure that you choose the right condo for rent. It may be difficult for you to do it on your own. It is better to enlist the help of property agencies to find the right condo of yourself.
Maintenance proves to be easier in apartments as they hire an in house maintenance guy to call whenever you have any problems. Then again, there are many condo owners in Bangkok who maintain their condos well, and have their own men who respond to their grievances within a day. It is based on the initial condo agreement that the cost of the maintenance is borne by the condo owner or by the tenant.
When compared to an individual house, you have better security in apartments and condos as they offer 24 hour security. Moreover, there is no chance of any flooding taking place in apartments and condos. This is an important point to keep in mind when you look for property to rent or buy in Thailand.
Can a foreigner 'own' properties in Thailand?
Yes, a foreigner can own properties in Thailand. The Condominium Act (No. 3) B.E. 2542 (A.D. 1999) provides "freehold" registration of apartments or condos directly into foreign nationals.
Any registered condominium development is allowed to allocate 49% of the total sellable area into foreign ownership. A foreign registered condo can always be sold and registered into another foreigner's name. At the transfer of ownership the buyer must always be able to show his "Foreign Exchange Transaction Form". Land cannot be registered directly into foreign ownership
How do I transfer funds for a property purchase into Thailand?
Simple, you may open a bank account in one of the local banks where your transfer the funds into. Otherwise you may transfer funds directly into the bank account of your real estate agent that is engaged to purchase the property on your behalf; make sure that you only deal with reputable and professional agencies. Make sure that your transfer shows all correct bank-details (Account name, account number, branch name and address, swift code and type (current or saving) of account) as well as the full address details of the receiver PLUS a description of the reason for transfer.
This description could be: "Property Investment Thailand". Only if your transfer exceeds the amount of 10,000 USD you should ALWAYS request an official so-called "Foreign Exchange Transaction Form". This "Foreign Exchange Transaction Form" will always allow you to re-transfer funds out of the Kingdom of Thailand. As you might know; normally one is not allowed to bring money outside of Thailand. Only with a "Foreign Exchange Transaction Form" you are allowed to send money, for a similar amount, out of Thailand as it proves that you ever transferred funds into Thailand. (If you buy a property and sell it later, it will become helpful).
If you ever register a "freehold" (foreign owned) condo into your name you must be able to show a "Foreign Exchange Transaction Form" upon transfer at the Land Office. "Foreign Exchange Transaction Form(s)" are personal documents that you should always keep in file.
Can I purchase properties when I am abroad?
Yes you can. However our advice is to make the purchase decision when you are here in Thailand or otherwise only to make a decision if you are very familiar with the product and all parties involved. "Buying in the blind" (e.g. through Internet) is not recommended.
All required documentation can be signed and sealed abroad and/or assigned by a power of attorney. Remember that any property transfer, assigned by power of attorney, can only be handled by a Thai national. Always request for copies of documents by post, email or fax so you are able to monitor the progress.
Should I make payments for a property purchase directly to a developer or, preferably, to my agent?
Yes, you can transfer payments directly to your developer. Most of the real-estate developers are genuine and reliable.
However, there are still quite a few that are not very efficient- and reluctant parties to deal with. If you want to ensure smooth proceedings you should at least engage a professional real-estate agent that is familiar with the market and able to assist you in case of any problems. Checking the track-record of both the developer as well as the agent that you are dealing with is advised.
If I rent a property, are my interests protected by Thai law?
Normally, you can rent and enjoy your stay as long as the contract-duration stipulates. In rare occasions the landlord breaches the contract by selling the property.
Unfortunately there is not a lot you can do about this. Thai law and legislation is not really firm in protecting tenants' interests. Long term lets or leases can be officially registered at Land Office Department (3 plus 3 years only).
Once registered at the Land Office Department your lease term is pretty safe and solid. This often applies with commercial leases.
How are my interests secured if I buy off-plan?
Buying off-plan is certainly not unusual and often even allows pre-construction conditions.
Apart from that; the first choices are yours, so you could find yourself in a position whereby you can select the nicest properties available on the project. It is advised, before you sign-up a contract at the pre-construction phase, to ask for a copy of the developer's land title deed (Chanoot) whereby it clearly shows that the project's land parcel is owned by the developer or one of his nominees.
It rarely happens that pre-sales started before the land purchase is completed by the developer: In such case you better turn around and walk away.
It is also good to ask a copy of the building license; in theory the construction may only start if the licenses are issued. If you sign a contract, please make sure that any deposits are fully refundable in case the project will be canceled or seriously delayed (starting date as well as completion dates).
Buying property in Thailand is often a pleasant experience if you deal with professionals.
What is a security deposit and why should I pay it?
Imagine that you find the property of your dreams and you are not able to make an immediate payment on it; do not think that the property is still there if you go to the bank within days to make a payment.
It happens ever so often that all of a sudden disappointment strikes when the property is no longer available because it is sold! If you are more or less sure that you want to buy or rent, you really should make a 'security deposit' to ensure that the offer will be taken-off the market and not being sold or rented to another person.
Even when you are not able to complete on the deal immediately or meet the datelines as stipulated by the seller or landlord (let's say you want to start a rental period after 2 months.) you could still try to negotiate if the seller or landlord is willing to accept your terms rather than start looking for another proposition. Offering to pay a security deposit often helps the negotiations. In some cases the security deposit is refundable.
If you make a clear understanding regarding how and when you could claim your deposit, there is now risk that you loose it (e.g. when the seller or landlord cannot meet the terms.).
Is it complicated to form my own Thai company?
Not at all. Forming a Thai registered company is a quick and eay thing. Make sure that you use a capable solicitor or administration office with the knowledge of all procedures involved. It will become handy if the formation of your Thai company is done by a party that is also able to process the required annual audit report of your company.
Keep all of your company documents on a safe place within reach if you need them. If there are any properties owned by your company you might consider registering a separate company for each one of them.
In the event that you ever want to sell your property you might as well transfer the shares of your holding company into the buyers' name which saves you a reasonable amount of land transfer taxes.
If you want help to contact a reputable international solicitor, let us know and we can refer you to a reliable and trustworthy partner.