Contract Review in Thailand

The usual practice dictates that when a party pays the initial deposit enroute to a purchase of a property, the seller of the said property will provide the buyer with a “Contract of Sale” or “Sale and Purchase Agreement.” This contract may be in Thai or in English yet even if the contract is in English, the need for such contract to be reviewed carefully will still be the same if it is written in Thai.

Be it in Thai or in English, there may be a need to have the contract translated and then executed on both languages.

However, the purchasing party should put in mind that he has to have the contract thoroughly reviewed preferably by a lawyer with extensive background in Thai property laws before he will affix his signature on the document. This is to ensure that the rights of the buying party are protected and that there are no hidden clauses included in the contract that may eventually become detrimental to the buyer in the long run.

Why is Contract Review needed?

While the Title describes who exactly owns the property and where it is located, the Sales Contract on the other hand provides the exact description on the sale, how and when this will be sold and on what terms and condition. It is worth mentioning that the usual Thai practice when it comes to sales contracts is that the exhaustive rights and obligations of both parties are not included but only the basic rights therein.

The following are other important reasons why a Sales Contract needs to be thoroughly reviewed first before it is signed upon.

  • The buyer deserves to have a smooth buy of the property and this can achieved by him if he has a good understanding of what is contained in the contract.
  • There can be instances in which the contract does not contain the provisions previously negotiated and agreed upon by both parties.
  • The sales contract may not contain an otherwise important provision such as the assignment of who should pay the applicable taxes related to the sale of the said property.
  • It may not also contain provisions pertaining to the completion of the said property nor a mention of the responsibilities i.e. penalties to be imposed on the developer in case of delays on the completion of an off-plan property.
  • The schedule and standard in the development of the property should be included in the contract if the said property is an off-plan property.

It is not surprising when sellers of properties would claim that the sales contract that they have adhere to the standards. Firstly, the so called “standard” in sales contract should be based on the needs of the buyers. This is the primary reason why a sales contract should be first reviewed by a competent property lawyer.

We provide a wide range of property-related services such as title search, due diligence, contract review. We do our job by thoroughly checking whether the sales contract actually provides protection and fairness to the buyer’s interests. And if the contract warrants for amendments to preserve the rights and interests of the buyer, we make sure that these amendments are included by negotiating with the seller of the property.

 

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