Every autumn, it is customary to provide final recommendations before the start of the high season: for business owners — business plans, trademarks, licenses, taxes; for investors — primary and secondary real estate purchases. However, current realities require shifting focus to one of the most pressing topics of this year — and likely the next: refunds and legal protection through the courts.
This is a broad subject, so in this article we will focus specifically on construction delays in condominium projects, i.e. breaches of off-plan purchase agreements.
Contract Terms
Each developer uses its own standard sale and purchase agreement, but there are key provisions that require special attention.
Construction Timeline and Ownership Transfer
The contract must clearly specify the completion date (month and year). Developers often include a clause allowing for a delay due to force majeure or объективные причины, but such extensions are typically limited to no more than one year.
Some agreements may include additional milestones (such as construction start date or commissioning date), but this is less common.
Consequences of Delays
There are typically three possible scenarios:
Option 1 — Contract Termination
The buyer terminates the agreement, receives a refund, and is entitled to a penalty (as per contract terms, usually up to 15% per annum).
Option 2 — Continue Waiting
If the buyer agrees to wait, they may claim a penalty of 0.01% per day of the paid amount, capped at 10%. Once this cap is reached, the buyer may terminate the contract.
Option 3 — Force Majeure
If delays are caused by force majeure, the buyer may terminate the contract and claim interest based on the rate of Krung Thai Bank.
In this article, we focus on Option 1 — contract termination and penalty claim.
When to Take Action
A claim can only be filed after the contract has been breached.
This means that even if construction is clearly behind schedule, you must wait until the contractual deadline has passed before filing a lawsuit.
However, preparation should begin in advance. Drafting claims, preparing documents, and translating them into Thai takes time. Acting early ensures you are among the first creditors — which can be critical if the developer faces financial difficulties.
Where to Start
Several approaches are possible:
Option 1 — Negotiation
If the developer is open to dialogue, start with a formal claim for contract termination and refund. Make sure to obtain written confirmation of receipt (signature and stamp).
However, be cautious: if negotiations become prolonged without progress, it is time to involve a lawyer.
Option 2 — Legal Action from the Start
You may immediately engage a lawyer, who can also attempt pre-trial negotiations. An experienced lawyer may already be familiar with the developer and assess whether negotiation is worthwhile or if court action is necessary.
What to Bring to a Lawyer
Prepare the following documents:
- Original sale and purchase agreement
- Payment receipts (deposit and installments)
- Correspondence with the developer (if any)
- Passport
- Thai translations of documents (if available)
Which Court to Choose
This depends on the contract and case specifics. Possible options include:
- Civil Court
- Consumer Protection Court
- Commercial Court
The choice significantly affects legal costs and processing time.
Many buyers initially assume fraud and go directly to the police. However, not every breach of contract constitutes a criminal offense. Only in cases with clear evidence of fraud does a criminal case accelerate the recovery process.
Legal Costs
- Civil Court fee: 2% of the claim amount, capped at 200,000 THB
- Consumer cases: no court fee for the plaintiff
- Arbitration: fees vary depending on claim value
Additional costs include:
- Translation of documents into Thai
- Court interpreter services
- Expert evaluations
- Legal fees
The Process
Court proceedings are rarely quick and may take several years. Arbitration may offer faster resolution.
The plaintiff’s physical presence in Thailand is typically required only for:
- Testimony
- Court judgment announcement
All other procedures can be handled by a lawyer.
During proceedings, parties may reach a settlement, often involving mutual concessions. For example, the defendant may agree to repay the principal amount without covering legal costs.
If the case proceeds to judgment, the court will decide how costs are allocated.
The defendant has the right to appeal. If no appeal is filed, enforcement begins — and this is where the key issue arises:
whether the developer still has sufficient funds or assets to satisfy the claim.
Final Thoughts
Successful litigation with a perfect outcome is more of an exception than the rule. Legal disputes always involve time, money, and stress.
If it is possible to resolve the matter amicably — that is always preferable.
But if not, act quickly and decisively, and be prepared to defend your rights in court.
Author: Alexandra Agapitova.
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