Sample condo contract payment terms

FOR A RESALE OR OFF-PLAN CONDO IN THAILAND

In case of the sale of an existing condo unit/ apartment in Thailand (as opposed to off-plan) the purchase price for the unit could be paid by cashier's check to the seller at the time of transfer of ownership of the condominium at the land office (standard practice). The buyer pays when his name is registered as the new owner of the unit. In this case the foreign buyer of the condo must obtain a cashier's check AND the foreign exchange documents (FET form) from his bank in Thailand. The foreign exchange transaction form is required for registration of foreign ownership under Thai condominium laws.

Condominium ownership

The expenses of the condominium under section 18 of the Thailand Condominium Act relates to maintenance fees and are each owner's share in the costs incurred by the condominium juristic person in maintaining and managing the condominium. It relates to the common expenses of the condominium.

Buying a condo in Thailand

The Thailand condominium law allows outright foreign ownership of an apartment unit in a condominium registered and licensed as a condominium with the Thailand Land Department. The Thailand Condominium Act contains in section 19 the restrictions and requirement for foreign ownership of a condo.

Any foreigner who can enter Thailand legally can buy a condominium and register foreign ownership within the foreign ownership quota of the condominium building (section 19 bis of the Condominium Act B.E.2522) but he must qualify for foreign ownership under section 19. Becoming eligible for foreign ownership a non resident foreigner must have transferred the full purchase price for the condo in foreign currency into Thailand. The receiving bank in Thailand will issue proof of the remittance and exchange of foreign currency into Thai baht that must be submitted with the Land Department.

Read More...

Condo transfer taxes and fees

Payable at the transfer of ownership

When a condominium is transferred from one person to another taxes and fees are on the spot at the time of transfer imposed by the provincial or local land branch office where the conveyancing of the condominium takes place. The taxes could be paid either by the seller or the buyer of the condominium or divided between them. The land office will calculate the payable amounts and issue a receipt specifying the total amounts of transfer fees, specific business tax, local municipality tax, stamp duty and income withholding tax. These calculation are based on the registered sale value of the condominium or the government assessed registered value of the condominium.

Read More...

Licensed condominiums vs unlicensed apartment buildings

Not all apartment buildings in Thailand are registered and licensed as 'condominium'

In tourist resort areas, such as Pattaya, Phuket, Hua Hin and Koh Samui, holiday 'leasehold' apartments are often confused with condominiums licensed and registered under the Thailand Condominium Act. On the outside these buildings could look the same but legally they cannot be compared. Buying a condo in a building registered under the Condominium Act is far from the same as buying a leasehold unit in a residential apartment building having no license or condominium registration with the Land Department.

Dispose of a condo by will to another foreigner

Bequeath a condominium under provisions of a will

A foreigner who complies with the Condominium Act can own a condominium unit in Thailand outright, but upon his death his right of foreign freehold ownership won't pass to his foreign successors/ heirs. Any foreigner who receives a condo in Thailand by inheritance must qualify for ownership under section 19 of the Condominium Act or he must sell the unit within one year of acquisition by inheritance.

Condos in Thailand may be inherited by foreigners through testamentary or intestate succession, however, in order to legally register ownership of the unit with the Land Department the receiving foreigner must proof that he qualifies for ownership under section 19 of the Condominium Act.

Read More...

The condominium lease option

Lease ownership of a condominium under a registered lease agreement

When the 49 percent foreign ownership quota in a condominium project is sold-out it is possible to lease the remaining condominium units under 30-year apartment unit lease agreements to foreigners, as long as a Thai person is the freehold owner of the condominium unit.

Lease of a condominium unit is governed by the Civil and Commercial Code and not the Condominium Act. As opposed to foreign freehold ownership of a condominium there is no special laws regulating lease of condos by foreigners in Thailand and the same rules apply as in any other real estate lease. There is in principle for foreigners no FET-form (foreign exchange transaction form issued by a Thai bank) needed to register a lease agreement at the land office but local land offices (like Phuket) may ask for one. It is in any case recommended to obtain a foreign exchange transaction form for the remittance of foreign currency into Thailand.

Read More...

Foreign Exchange Transaction Form

Bringing foreign currency into Thailand

The Foreign Exchange Transaction form (previously and for some still known as Thor Tor 3) is the official document prepared under BOT regulations to report foreign currency exchange transactions in Thailand and the document also proofs the remittance of foreign currency into Thailand and the exchange of foreign currency into Thai baht inside Thailand. The FET form is issued by the authorized financial institution (bank) inside Thailand that handled the exchange of foreign currency and contains at least the following information:

What is condominium under the Thailand Condominium Act

Licensed and registered under the Condominium Act

The Thailand Condominium Act defines a condominium as a building that can be separated into units for individual ownership and which include personal and common properties (land on which the building sits, hallways, elevators, etc.). The Condominium Acts does not specify in any detail the specific requirements necessary in order for it to be identified as a condominium. As long as the building is able to hold ownership separately according to the area, whereby each area consists of private ownership in the property and joint ownership in the common property. There are no specifications outlining height or space requirements, nor are there any specifications outlining the minimum amount of individual units necessary within the building under the Condominium Act.

Contract price and final price

Price calculation is an off-the-plan condominium

Price variations in the contract

Selling condominiums freehold in Thailand is a government contract controlled business (not the leasehold sales of units in a condo project). The sale and purchase contract in an off-the-plan condo project must comply with ministerial regulations issued under the Condominium Act and minimum consumer protection standards. The contract must be a fair contract and comply with the law or the content is not enforceable (section 6 Condominium Act).