Review of Contracts
Sale and Purchase Agreements
When you buy property in Thailand, in most cases, the seller will provide a "Contract of Sale" or "Sale and Purchase Agreement" after you make the initial deposit. The Sale and Purchase Agreement is a binding and legal contract between two parties that obligates a transaction between the two parties: the buyer and the seller. This contract is typically used for real estate transactions. The agreement finalizes the terms and conditions of the sale and it is the culmination of negotiation of the sale. The contract may be in English or Thai. It is important to review this contract carefully before you sign it. Sometimes you may need to have the documents translated and execute both of the versions.
Importance of Contract Review
While the title deed for the property describes exactly what and where the property is situated and who currently has a right of ownership to the property, the sales contract describes exactly when and how the seller will sell you the property and upon what terms and conditions. In Thailand, the usual contract of sale only lists basic rights and does not list all the exhaustive rights and obligations of the seller and the buyer. More exhaustive sales contracts, as are common in many other countries, allow for all possible contingencies such as default by the seller or buyer. The terms and conditions set forth in the contract should not in any way jeopardize the rights of either the seller or the buyer. In any contract, the interests of both parties shall always be put into consideration. You should then have a contract reviewed. A contract review will enable both parties to:
- To make sure the sale goes smoothly, it is important to have a good understanding of what the sales contract says.
- In some cases the contract may be lacking some extra conditions which you have negotiated with your counterpart and agreed that it should be contained in the contract.
- The contract could be missing some other essential provisions that become real important once problems arise. For example, the original sales contract might not include a provision for whom will pay the taxes on the sale of the property.
- It could be lacking provisions regarding completion of construction of off-plan developments and makes no references to the penalties the developer must pay in the event of delays.
- Often sales contracts which are signed before development is completed will include the construction plans, schematics or blueprints. If the seller has to complete development before the transfer of property, the contract should clearly lay out a schedule and standard for the construction or other development.
While many sellers will say that their sales contract is standard, we have seen many errors and omissions in sales contracts. There is no need to use a so-called "standard" contract if it does not meet your needs. When executing any important contract, it is always a good idea to get a property lawyer's comments on the terms of the contract to make sure they are legal, complete, and enforceable if something goes wrong. This is especially true if you are in a foreign country.
Buying and Leasing of Land
If you are buying or leasing land with the purpose of constructing or building a structure on it, it is imperative to make sure that you are allowed to build a structure or house on the land if that is your plan. This is sometimes called the "right to superficies". This is a very important term that one should look into a contract whether it be a Lease Agreement or a Sale and Purchase Agreement.
Our Contract Review Service
Siam Legal International’s property services include:
- Reviewing the contract of sale to make sure that your interests are protected.
- Review the contract to make sure that it fully and accurately describes the each parties' duties and does not include any hidden charges.
- To ascertain whether the contract makes clear what will happen to the initial deposit and any other payments if the seller does not transfer the property to you.
- Upon review, our lawyers will negotiate with the seller to make any amendments necessary to meet your needs. These amendments would include protecting your rights if there is a delay in construction, and include late penalty payments and payment schedules.
- Once finalized, the amendments will be provided to the Seller for final ratification and agreement.