Thailand Property Solicitors

Certainly, there is no dearth of literature regarding Thai real estate business. The numerous real-estate publications in the form of magazines, broadsheets and brochures published by property developers and are either distributed freely or sold at bookstores attest to this fact. While this can be seen as an indication of a flourishing real-estate business in the kingdom, most of these free available publications are not written with the vision of guiding the reader about Thailand real estate but to lure them through the magazines’ dazzling images and catchwords.  Indeed, these magazines are written from a solid marketing viewpoint with the immediate goal of converting the reader into a potential buyer for the property being advertised. Indubitably, the Thai real-estate sphere is abundant with this type of literature.

 

Thailand’s unregulated real estate business demands caution especially on the part of buyers who suffer the most if something goes wrong with their real-estate transactions. While the Thai government has recently been amending property laws geared towards better protection of buyers’ interests, these amendments are very minimal and are yet to be fully realized and implemented. It is thus still best to exercise personal caution when engaging in a real-estate transaction. You can do so by gaining sufficient information regarding the ins and outs of the property business in Thailand. Those who have the means may immediately enlist the service of a qualified lawyer for professional advice. But those who are on a tight budget can just rely on available information to understand what’s going on and to, hopefully remedy any problems.  It’s at this point that a ‘genuine’ property guide which delves into the legal issues surrounding Thai real-estate business would come in handy.

Whether you are a property developer, a buyer, a broker or simply a person interested in venturing into the real estate business in Thailand, it is worth exploring the following current major topics or issues to gain a rudimentary grasp of how the Thai real estate business operates:

Buying property in Thailand

When purchasing a property in Thailand, the first thing you have to do is selecting a reputable real-estate agent or a lawyer to act on your behalf.  The best benefit of using a property agent is that they will act as a liaison between you and the Seller.  They will obtain a fair price for you and act on your behalf to represent your best interests throughout the entire process. Second, you need legal planning. Before you sign any deposit agreement or contract, you should sit down with a lawyer or solicitor to discuss the legal process. Conducting a title deed is the third important thing to consider. You need to verify that the Seller has clear and legal title of the land before you enter into a contractual agreement.  

Then you have to make a deposit. When you feel satisfied with the property, you will be asked to make a deposit to show your good faith to continue the process.  In return, the Seller will reserve the property for you and start the process by drafting the contracts for purchase.  Since the Seller will write the contracts, it is highly recommended that you have a lawyer or solicitor review the terms and conditions before signing them. Finally, your payment schedule should be reasonable and practical. Normally, a first payment is 25 percent.  Thereafter payments are made on a progressive basis:  25 percent when the roof is on, 25 percent when the door and windows are secure; and 25 percent when the fixtures and fittings are completed.

Purchasing a Condominium

Purchasing a condominium is by far the most popular and relatively straightforward method for a foreigner to acquire a property in Thailand. Although purchasing a condominium unit in Thailand is a fairly simple process, there are nevertheless certain steps which should also be considered as part of the due diligence. First is to check in the contract how much the monthly maintenance fee and sinking fund is. This should be in all the contracts for new condominium units although some units in the secondary market may omit this in their documents. Second is to obtain a copy of the Rules and Regulations of the Condominium before you decide to buy the property. Third is to ensure that a good and reputable management company is looking after things in an orderly and transparent manner. Finally, that there are some other formal means of airing your concerns or grievances aside from the general meetings.

Off Plan Investments

Engaging in an off-plan allows you to acquire your dream property in Thailand in a relatively low price but also can be of risk if you don’t observe some precautions especially with contracts. The important elements to consider in a contract are, among others; time frame, price, payment penalties, developers default or a guarantee that your payment is fully refunded should the construction wouldn’t be completed for any reasons, building floor plan and specifications, recitals and alternative dispute resolution in the form of arbitration.

Planning a Property Development Project in Thailand

Property development is a complex business process and like all businesses, proper planning is essential. Unlike many businesses, however, property development involves many intricate steps and solid financial management. In general, the steps in a development project can be broken down into five stages. They are, in respective order, inception and feasibility, design, tendering, construction and handover and maintenance.

Property development is an inherently risky business as capital expenditure is often high and liquidity is, by nature of having property as its main asset, extremely low. Financial management is crucial to the success of a project development and in order to have good financial management, it is essential to have good planning of all the technical aspects of the project.

Escrows in Thailand and Property Financing

In real estate terminology, an escrow can be defined as an impartial holding of documents or funds related to the sale and transfer of a property. An escrow is designed particularly with consumer protection in mind safeguarding your rights should anything go wrong before the transfer of the property. Nevertheless, an escrow system does offer equal protection to all parties involved including the seller, developer. Recent legislations have seen the introduction of the use of escrows in Thailand although it is still early days yet.

As for other financing options, you may find it convenient to apply for property financing to assist you in your property purchase. There are more choices now for foreign buyers and you may apply for a loan under Bangkok Bank or UOB in Singapore to help you with your financing. Several local banks also offer real-estate financing assistance at competitive interest rates.

Superficies and Usufructs

Superficies is essentially a right which can be granted to an individual, irrespective of nationality, to own the land the buildings, structures or plantations. The right may be granted for a period of time (maximum of 30 years) or for life of either the owner of the land or the person granted the right.  One positive characteristic of superficies is that it is fully transferable to your loved ones unless drafted otherwise in the agreement. And the most important thing about it is that it is a fully registered right giving you an inalienable right on the property for the duration of the superficies.

Usufruct is another tool in the arsenal of civil codes available for home buyers in Thailand. Usufruct works in many ways like a lease. It is a legal property right and is registered at the local Land Office to offer the usufructuary the enjoyment to the property. A usufruct can be registered for the life of the usufructuary or for a maximum of thirty years. During the period of the usufruct, the owner cannot sell or transfer the property to other third parties. Another benefit is that it would allow you to apply for a House Registration Certificate providing you with greater security on the property.

Considering the complicated maze that makes up Thai property laws, it is just prudent to come up with a straightforward property literature to shed light into these issues. This literature should act as a guide to prospective buyers and eventually for the promotion of consumer confidence. It is indeed a challenge for property developers, real-estate agents and law firms to be more sensitive to the needs of their clients when disseminating information through their publications. After all, greater consumer confidence by homebuyers in the property sector can only mean greater benefits for developers and agents and the real-estate market in general.