Sales Contract Review in Thailand

Buying or selling property is one of the most significant financial decisions a person can make. In Thailand, real estate transactions are common not only among locals but also among expatriates and international investors who are drawn to the country’s vibrant property market. Whether it is a condominium in Bangkok, a villa in Phuket, or a commercial property in Chiang Mai, the transaction always hinges on one crucial document: the sales contract.

A sales contract sets out the rights, obligations, and expectations of both the buyer and seller. It defines the property being sold, the purchase price, payment terms, timelines, and remedies in case of breach. In Thailand, however, property contracts are not always standardized, and they can sometimes be drafted in a way that heavily favors one party. This is why a careful sales contract review in Thailand is essential to protect one’s interests, ensure compliance with Thai law, and avoid costly disputes later on.

Why Sales Contract Review Matters in Thailand

Real estate transactions in Thailand differ from those in many Western countries. For one, there is less regulatory oversight at the contract drafting stage. Developers, sellers, and even some agents may present buyers with contracts that contain hidden risks or one-sided terms. Without professional review, a buyer might unknowingly agree to clauses that:

Limit their ability to claim compensation in case of defects.
Impose unfair penalties for delayed payments.
Shift responsibility for taxes and fees entirely to the buyer.
Fail to properly describe the property or its legal status.

Similarly, sellers may face risks if the contract does not clearly stipulate payment schedules, default remedies, or conditions for transfer of ownership. For both sides, having the contract reviewed by a legal professional reduces uncertainty and ensures fairness.

Common Issues Found in Thai Sales Contracts

A thorough review often uncovers clauses that may disadvantage one party or fail to comply with Thai law. Some of the most common issues include:

1. Incomplete Property Description

The contract should clearly describe the property, including its title deed number, land boundaries, and any buildings or fixtures included in the sale. Vague or incorrect descriptions can cause disputes at the Land Office or even invalidate the transaction.

2. Unbalanced Payment Terms

Contracts may include strict deadlines for buyer payments but little to no obligation on the seller’s side to deliver the property on time. A fair contract should set clear payment milestones linked to construction progress (for off-plan projects) or to the actual transfer date (for completed properties).

3. Hidden Taxes and Fees

Thai property transfers involve several costs, including transfer fees, specific business tax, stamp duty, and withholding tax. A poorly drafted contract may assign all these costs to the buyer, even when the law or industry practice would normally share them between both parties.

4. Lack of Warranties

Developers or sellers may omit warranties about the property’s condition, legality of construction permits, or absence of encumbrances. Without warranties, buyers have limited recourse if problems arise after the sale.

5. Default and Termination Clauses

Contracts often impose heavy penalties on buyers for delayed payments but provide minimal consequences for seller default. A fair agreement should address remedies for both parties, including refunds, compensation, or specific performance.

6. Foreign Ownership Restrictions

For foreign buyers, compliance with ownership rules is critical. Contracts must specify that the purchase is structured in line with Thai law—for example, confirming foreign quota availability in a condominium or properly recording a long-term lease agreement for land.

Key Elements of a Properly Reviewed Sales Contract

A good contract review ensures that all crucial elements are present, balanced, and legally enforceable. At minimum, the following aspects should be checked:

Parties to the Contract – Full identification of buyer(s) and seller(s), including marital status where relevant (spousal consent may be required).
Property Details – Title deed type, number, land survey information, and any structures included.
Purchase Price and Payment Schedule – Exact price, deposit amount, installment terms, and final payment timing.
Transfer of Ownership – Conditions under which the property will be transferred at the Land Office.
Allocation of Taxes and Fees – Clear division of responsibilities for transfer fees, taxes, and related costs.
Representations and Warranties – Assurances about ownership, absence of encumbrances, valid permits, and compliance with Thai law.
Default and Remedies – Provisions for late payments, construction delays, or failure to transfer ownership.
Dispute Resolution – Governing law (Thai law is mandatory for Thai real estate) and the chosen forum (Thai courts or arbitration).

Special Considerations for Off-Plan Purchases

Many foreign buyers in Thailand are drawn to off-plan projects—properties sold before construction is completed. These transactions carry unique risks, making contract review even more critical. Key points include:

Construction timeline – The contract should specify a clear completion date and remedies if the developer delays.
Payment schedule – Payments should align with construction milestones, not just arbitrary dates.
Escrow or safeguards – Funds should be protected to prevent loss if the developer defaults.
Developer’s track record – Buyers should confirm the developer’s licensing, reputation, and past project performance.

Thai consumer protection law requires certain standard protections in off-plan sales, but enforcement can vary. A strong contract supplements these legal safeguards.

The Role of Legal Professionals

Although some buyers try to navigate contracts on their own, engaging a qualified lawyer in Thailand is highly recommended. A lawyer can:

Conduct due diligence on the property, verifying title deeds and encumbrances.
Review the sales contract, identifying unfair terms and suggesting revisions.
Negotiate with the seller or developer to secure more balanced conditions.
Assist at the Land Office during the ownership transfer.

For foreign buyers, having a lawyer who can explain terms in both English and Thai is invaluable, as contracts are often drafted in Thai and official proceedings use Thai language.

Practical Tips for Buyers and Sellers

Never sign a contract you do not fully understand. Request an English translation and professional review before committing.
Check the deposit terms carefully. Some deposits are non-refundable, even if the sale does not proceed due to the seller’s fault.
Insist on written amendments. Verbal promises from agents or developers mean little if not written into the contract.
Plan for succession. Foreign buyers should consider how the property will pass to heirs under Thai succession law.
Be cautious with templates. Generic contracts may not reflect the specific risks of the property in question.

Conclusion

In Thailand, the sales contract is the backbone of any property transaction. While the property market offers attractive opportunities, buyers and sellers must recognize that contracts are not always balanced or fully protective by default. A professional sales contract review ensures that the agreement is fair, enforceable, and compliant with Thai law.

For buyers, this process safeguards their investment, clarifies financial obligations, and minimizes the risk of unpleasant surprises. For sellers, it ensures that payment terms are secure and that the transfer proceeds smoothly.

In short, a properly reviewed sales contract transforms a risky transaction into a secure one—providing peace of mind and laying the foundation for successful property ownership in Thailand.