Only about 10% of buyers carefully review a condominium sale and purchase agreement before signing it with a developer. As a result, many enter into unfavorable terms, lack a clear understanding of their rights, and miss the moment when those rights are violated. This article is intended to help both future buyers and those who have already signed a contract but are dissatisfied with its terms.
Contract Fundamentals
When drafting and signing agreements, developers must comply with two key regulations:
- The Condominium Act B.E. 2522 (1979), as amended in 2008
- The Standard Form Sale and Purchase Agreement for Condominium Units (Form OrChor 22), approved by the Ministry of Interior in 2008
Under Section 6/2 of the Condominium Act, all sale agreements must follow the approved standard form. Any clause that puts the buyer in a worse position than the standard form is legally invalid. Violations may result in fines of up to 100,000 baht.
Buyer’s Options
Before meeting the developer, a buyer can review the standard agreement, compare terms, and request amendments. However, most developers are reluctant to make changes. If no compromise is reached, the buyer has two options:
- Sign the proposed agreement
- Choose another project and developer
Key Contract Terms
Seller Information
- Confirmation of land ownership
- Title deed (chanote), unit size, and location
- Encumbrances, outstanding debt, and creditor
- Construction permit and project status
- Obligation to obtain a condominium license upon completion
Sale Conditions
- Unit details: number, floor, size
- Description and usage rights of common areas and facilities
- Marketing materials and brochures form part of the contract
Price and Adjustments
- Price per square meter and total price
- Adjustment clause if final unit size differs after completion
Payments and Transfer of Ownership
- Payment schedule: booking fee, contract signing, installment payments
- Payments made at seller’s office with receipts issued
- Construction completion and transfer timelines
- Seller must notify buyer 30 days before ownership transfer
- Buyer may request earlier transfer with 7 days’ notice
- Buyer may assign rights to a third party with written notice (no extra fees)
Construction Obligations
- Compliance with approved specifications and government standards
- Extension of construction period (up to 1 year) allowed in force majeure cases with notification
- Responsibility for installation of utility meters
Transfer Costs
- Seller pays income tax, stamp duty, and specific business tax
- Transfer fee shared between buyer and seller
- These terms are aligned with the Thai Revenue Code
Penalties and Termination
Buyer’s Default
- Late payment penalty: up to 15% per year, capped at 10% of unit price
- Grounds for termination by seller:
- Single payment: any delay
- 24+ installments: delay of 3 consecutive payments
- Less than 24 installments: delay of 12.5% of total price
- Seller must issue written notice; contract may be terminated after 30 days of non-payment
Seller’s Default
If the seller fails to transfer ownership, the buyer may:
- Terminate the contract and request a refund with interest
- Claim a penalty of 0.01% of the unit price per day (capped at 10%)
Force Majeure
- Seller must refund all payments and pay interest based on the deposit rate of Krung Thai Bank
Construction Defects
- Warranty: 5 years for structural components, 2 years for others
- Defects must be fixed within 30 days after notification
Contract Attachments
- Company registration documents
- Land title deed (chanote)
- Construction permit
- Unit and common area specifications
- Marketing brochures
Practical Advice
In practice, developers either strictly copy the standard agreement without adapting it to the project, or heavily modify it to protect their own interests. Both approaches are far from ideal.
Signing a contract that disadvantages the buyer, hoping to resolve disputes later in court, is not advisable:
- Legal proceedings in Thailand are costly and time-consuming
- Courts generally treat the contract as mutual agreement to its terms
Author: Alexandra Agapitova.
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