Thai Property Real Estate Related Articles

House or Condo development contracts

Housing and condo developments in Thailand

There are two types of property developments in Thailand:

  1. the official government licensed condominium and housing projects and
  2. the private property housing and apartment developments.

The official government licensed condo and larger housing developments seem somewhat safer because there is government control and these developments must have obtained various licenses and approvals. In addition the sale contracts must comply with minimum contract standards (sample regulation and sample news article) and consumer protection laws. The standard sale contracts must comply with ministerial regulations and are approved as part of the licensing procedure of the project. It offers some protection and guarantee for the freehold purchasers in these developments.

Consumer protection and leasehold contracts

The drawback for foreigners is that consumer protection and minimum contract standards ONLY apply to the freehold sale contracts offered to Thais and foreign purchasers in a licensed condominium development but NOT in any way apply to leasehold sale contracts (read hire of property) in the same project offered to foreigners. The leasehold sale contracts in a government licensed housing or condominium project or in private developement are in content similar and are drafted to generate sales and usually contain promises which merely hold the illusion of contract (e.g. a longer lease term through renewal options like the commonly used 90 year lease (read sample wording in contract download) which is under Thai hire of property laws only enforceable by legal action for a 30 year term read more). 

The contract structure of a leasehold 'purchase' could go either way, pro lessee or pro lessor, but Thai hire of property laws itself are considered pro-lessor and Thailand does not know advanced tenant protection. Protection for the lessee must be created in the lease contract structure. In any case it is essential to have some understanding of what leasehold and contract promises in a Thai lease agreement mean before entering into a real estate leasehold agreement in Thailand.

Dubious property developments

The additional drawback in private developments is that building and development rules are easy to cheat and foreign purchasers find very little protection in the law (read warning for foreign buyers). Some private projects are completely illegal and built on protected nature reserve or agricultural land, sometimes with the involvement of currupt officials - read sample Samui article or sample Phuket news item which are typical examples where foreigners (outsiders) lost large amounts of money to powerful locals (insiders) but no one was arrested (and the money handed over for the deal was lost). Foreigners should be aware that cheating and corruption is often considered normal business practice in Thailand.

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