Property in Thailand has become a highly profitable asset throughout the recent years. Thailand is one of the best resort places on our planet. Many tourists visiting the country decide to buy property in the Kingdom. Speaking about prices real estate in Bangkok, Pattaya, and other areas of the country, can bring their owners a high ROI. The legislation of the Kingdom for concluding a contract for the purchase of real estate has a number of advantages and features. In order for the transaction to pass safely, it is necessary to carefully consider the documents when signing a deal for the purchase of an apartment or house. There are also some myths worth considering when investing in real estate in Thailand.
Real estate in Thailand
It is possible that none of the parties may be in the country at this time to conclude the transaction. Remote transactions is a common practice, especially such transactions have become in demand during the pandemic.
Here are the things that may worry the buyer:
- Do not lose money during the transaction
- Protect yourself from incorrect actions on the part of the seller or developer
- Purchase the selected property at market value
Action algorithm:
- It is necessary to decide what you are going to buy – an apartment, a house or a villa. Define the purpose of the purchase – temporary or permanent residence, long-term lease of the property for income generation or own residence or short-term lease.
- Legal due diligence – any buyer is interested in the security, transparency and purity of the transaction. To fulfill this, before signing a deal between the seller and the buyer, carefully check the following documents:
- Real estate construction permit and environmental certificate.
- Payment of taxes, information about the leaders and the right to sign a deal.
- A copy of the chanot for the land plot where the facility is being built. Make sure that there are no encumbrances before the construction of the condominium begins.
- Check the sample of the proposed contract of sale for compliance with the requirements of Thai law.
Contract obligations
Each of the parties signs the contract at the actual location, remotely if needed. It is not necessary to be in Thailand to sign the contract – this is allowed by law.
You send the signed contract to the email address specified in the contract from the email address that you indicated in the signed contract as a buyer. In this case, all electronic correspondence signed between the buyer and the seller is considered official.
Further, the original contract in 2 copies is sent to you at the postal address specified in the contract. One copy remains with you, the second you send to the address of the developer. Next, you pay for the contract according to your payment schedule.
If the developer has built a property that does not meet the specified parameters in the contract, delays the construction process, or evades registration of ownership, in these and other possible disputes between the buyer and the developer, you can resolve these issues with the help of a special mediator.
In most cases, all disputes are resolved in a pre-trial order and solutions are found that meet the requirements of the buyer. Developers are trying to resolve the conflict without leading to litigation. The court in the Kingdom, as a rule, takes the side of the buyer and if all the conditions of the contract are met, there are no problems with the recovery of damages.
The interests of foreign citizens in the courts of the Kingdom can only be represented by licensed Thai lawyers.
Myths about property in Thailand
Myth No. 1 Guaranteed income of 12-20% per annum
A favourite marketing technique of real estate agencies and small developers in Thailand is the promise that after construction and payment of 100% of the cost of the apartment, you will receive a title deed (Chanot) and the developer’s management company will rent out your apartment. But the developer’s management company is not an international hotel chain that has well-functioning management, staff and sufficient experience in managing apart-hotels. And it will take years to achieve a stable tourist flow.
Myth No. 2 Hotel license – a guarantee of your income
Of course, having such a license is a nice bonus, but the most important question remains: who will lease and manage? Does the developer company hire a management company from outside or create its own?
The management company may not have operational experience in managing a large number of rooms, marketing, working in a high season load, and maintaining a multi-unit condo. Thus, your income depends on the company and its experience in property management.
If the developer remains a management company, this is a rare exception when the company is a good developer and a professional service manager.
Myth No. 3 Leasehold is safe and profitable
In Thailand, there are two types of real estate registration: freehold and leasehold.
Freehold – 100% ownership. The owner has the right to sell, donate, and inherit. The right of ownership is enshrined in the legislation of section 19 of the Condominiums Act of 1979. Any foreign citizen has the right to issue an apartment in the property.
Leasehold is a long-term lease. This method of registration of real estate is not property and does not imply the right to dispose of it. The real estate developer legally remains the owner of the property. The lease agreement is drawn up for a period of not more than 30 years and is registered with the Land Department of Thailand. This period can be extended only with the participation and consent of both parties. In this option, the design makes it possible to minimize costs, since the buyer does not need to pay the state fee. You need to be sure that the developer is 100% reliable for the next 30 years, and if necessary, selling apartments on leasehold (e.g., in 5-10 years) will be more difficult than when owning Freehold.
Property for sale in Thailand
So that your investments are profitable, and transactions are guaranteed to be safe, use the help of the Thailand-Real.Estate website. With their database of the real estate in Thailand you will definitely find something for your taste and budget.
Article Submitted By Community Writer
