Contract To Buy A Condominium Unit - What To Look Out For

Published: 26th December 2009Author: David Tan



I expect to buy a condominium unit in two months time and the seller is asking me to sign a Sale Contract now. Before I sign the Contract, whatcontractual conditions should I look out for?


First of all, this Contract is not a sale of condominium unit ('Condo Unit') contract, not in the eyes of the Thai civil law. It is a contract whereby the seller promises to sell you the Condo Unit in two months time and you promise to buy the Condo Unit in two months time, better known as a TO sell and TO buy contract. The Contract will provide for all the binding conditions between the seller and you until the time of ownership title transfer i.e. in two months time.

Furthermore, under Thai civil laws, a sale of a condominium unit only takes effect upon payment of full purchase price to the seller and the registration of ownership title transfer by an official of the Land Office. These have not taken place yet.

The main contractual conditions which you have to look out for are:

(1) The seller agrees to transfer ownership title of the condominium unit to you at a specified date. Otherwise, you have the right to claim for the damages for breach of contract. Also, any deposit money, first installment payment etc. paid towards the purchasing of the Condo Unit must then be returned to you;

(2) The seller covenants or gives warranty that the Condo Unit shall be transferred to you free and clear of any encumbrances, mortgages or charges;

(3) All drawing plans of the Condo Unit, building materials e.g. teakwood for walls in kitchen, brochures on the Condo Unit and other specifications of the Condo Unit are considered a part of the Condo Unit and this is defined in the Contract. (Note: This is now a requirement under the Condominium Act No. 4 B.E. 2551 (2008) Please see my article Contract Protection for Buyers of New Condo Units published in the Pattaya Mail newspaper on August 28, 2009; and

(4) The party that is responsible for payment of the transfer fee, income tax, stamp duty or specific business tax. If these are not specified in the Contract, then the parties to the Contract will have to comply with the provisions under the tax laws i.e. you, the purchaser of the Condo Unit, is only responsible for 50% of the transfer fee.

If the seller is a married person and the Condo Unit is marriage property, the seller will have to produce a letter of consent from his/her spouse consenting to the sale of the Condo Unit.

Written by David Tan. David is a Lecturer of Business Law at Asian University and author of the book - A Primer of Thai Business Law (Second Edition), available online at . In Bangkok, the book is available at all Kinokuniya and Asiabooks bookstores. Any questions to David regarding lease of real estates, business and labour should be sent to A selected question and its answer will be published in the next issue.


David Tan Articles:

Does 90-year Lease Exist? - David Tan is a Lecturer of Business Law at Asian University. He has kindly provided us with a series of legal articles looking at property and employment law in Thailand. We start by clearing up the 90-year lease issue.

Foreign Ownership of Land? - David Tan continues his series of legal rights articles with an enlightening look at the thorny issue of foreigners owning land in Thailand.

Buying a Condo in Thailand - How to proceed with due diligence when buying a condo in Thailand.

Escrow Agents in Thailand - How to use escrow agents in Thailand when purchasing a property.

Property Purchase Deposits - If you pay a deposit or reservation fee to a property developer, does that mean you have a sale contract?

Lifetime Land Lease? - Is it possible for a foreigner to lease a plot of land for their own lifetime?

Employee Failing Probation - David Tan's series of legal articles move on to employment law. He starts with a look at the requirements for terminating employees who are on a probationary period.

Fixed Employment Contracts - Fixed period employment contracts are a technique employers can use to avoid having to pay severance and provide prior notice of employment termination to employees.

Sacking an Employee - What are the legal implications for an employer to sack an employee in Thailand?

Selecting Outsource Company - If you outsource in Thailand, what rights do the outsource company's employees have from your company?

Contract Protection for Buyers of Condos - How can you be sure your new condo will turn out like the pictures in the glossy brochure?



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