When purchasing property from a developer, contracts often include the following clause:
“In the event of the buyer’s death prior to the registration of ownership, the developer shall transfer the contractual rights to their heir ______.”
At first glance, this may seem like a convenient solution. However, in practice, such a clause does not protect the buyer or their family.
Why It Doesn’t Work
Such a clause:
- has no legal force as a will
- does not meet the formal requirements of a will
- is not relevant to the subject matter of the contract
- may contradict a valid will made later
Important: A contract is not a legal instrument for determining heirs.
Potential Risks
This clause may create issues if:
- there is a will naming different heirs
- there is no will and inheritance is distributed by law
- the person named in the contract is not a legal heir
In these cases, the “designated” heir in the contract may receive nothing.
Why Developers Include This Clause
Typically, it is included:
- as a “service” feature
- to simplify the process from the buyer’s perspective
However, it is important to understand:
this does not replace a will and provides no legal guarantees.
What Should Actually Be Done
Sale and Purchase Agreement
No specific provisions are required.
Leasehold Agreement
It is essential to specify:
- that the tenant’s rights are inheritable
However:
- do not name a specific heir
- the heir must be determined only through a will
Otherwise:
- the lease may terminate upon the tenant’s death
When to Make a Will
There is no need to wait for construction completion or ownership registration.
A will can include:
- rights under the developer agreement
- real estate
- bank accounts
- other assets
Recommended wording:
“all property owned or to be owned in Thailand”
This allows the will to be prepared immediately after signing the contract.
Conclusion
A clause naming an “heir” in a contract:
- does not replace a will
- does not protect heirs’ rights
- may create legal risks
The only reliable instrument is a properly drafted will.
Author: Alexandra Agapitova
All rights reserved.
Copying and use of materials without written permission of the owner is prohibited.