Before Buying Thai Real Estate (reproduced extract)

Before Buying Thai Real Estate

extract from old BLB newsletter –

As lucrative and promising that investing in Thai Real Estate may be, the eager prospective proprietor has to exercise much prudence and caution as there are many crucial legal aspects that have to be looked into before jumping onto the buy Thai bandwagon.

Factors for consideration include, inter alia:

Foreign Ownership Restrictions

Can you legally own what you are purchasing? Do you fall within the limited exceptions? Is your ‘holding’ vehicle legally tact? What are the legal implications of the form in your ‘usufruct’, ‘superficie’, Thai PLC, etc. in face of adversity?

Form & Method of Conveyance

Do you have a Sales & Purchase Agreement? Is your Sales & Purchase Agreement protective enough, or is it lopsided? Is it enforceable?

Taxes

Are there specific tax liabilities involved? Is the House & Land Tax applicable and what is its method of computation?

Fees

What are the official fees involved in the conveyance? Who is responsible for payment of such fees?

Structural / Environmental Assessments

Have these been duly conducted by the developer?

Specific Liabilities

What are the specific liabilities that may be shouldered by the parties in such specific circumstances?

Property Due Diligence

Do you know what you are really buying into behind those enticing promises of ROIs and loose assurances? Know what you are buying. Caveat Emptor!

Legal Consultation is strongly recommended for Real Estate transactions in Thailand as there are truly far reaching consequences for taking small steps in err.

The Sale & Purchase Agreement

The Sale & Purchase Agreement (SPA) is fundamental, if not the benchmark to any sale & purchase transaction of real property. The SPA has to be in writing and registered with the Land Office.

Is your SPA intact? Thai localization of an SPA is necessary and the nuances of Thai law and practice should see accommodating adjustments to such salient terms as:

  • Description of the Property
  • Terms of Payment
  • Vendor’s Representations & Warranties
  • Date of Title Transfer
  • Liability for Transfer Fees & Taxes

Common, mandatory representations and warranties include, inter alia:

  • The Vendor’s valid title to the property
  • The property is free of all forms of encumbrances, including mortgages, claims, charges, liens and c.
  • The property is free of pending investigation, actions, suits or legal proceedings that seek to prohibit, challenge or restrict the sale of the property

Notwithstanding these warranties, Property Due Diligence is much emphasized as a legal claim for breach of contract could take years to reach an outcome.

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For more information on the foregoing, please contact the author JOEL LOO SEAN EE, the Bangkok-based Senior Regional Counsel at Kelvin Chia Thailand and a member of Kelvin Chia Partnership’s Regional Practice Group at Joel.Loo@KCPartnership.com.

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This article is published to provide general information only and is not offered as specific advice on any particular matter – This information is to be taken subject to proper consultation with a lawyer.

All written material on BANGKOK LEGAL BLOG (BLB) including this post are the Copyright of Joel Loo Sean Ee. Any attempt to plagiarize or reproduce these materials in whole or in part, in verbatim or in paraphrase, or in any other form that it can be conceivable that such attempt is being made is an offense in law and will be an invitation by offenders to face charges and prosecution in a Court of Law.

 

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