Property Contract Review

Phuket is not only a premier travel destination for worldwide visitors, but it has also become a residence for professionals, business owners, families, and retirees who seek to live life in this tropical paradise or invest in its properties.

Buying or leasing a property in Thailand is extremely common for foreigners and the revised laws have made the process much simpler. However, before deciding to enter into any type of property contract, foreigners should completely understand all underlying regulations and nuances regarding property ownership in Phuket in order to avoid regrettable mistakes.

Buying and Leasing Property in Thailand

If a foreigner is considering buying or leasing a property in Phuket or elsewhere in Thailand, he or she should be aware of the ownership structures and what laws are applied to foreign buyers.

Though foreigners are not permitted to own land in the Kingdom as of date, they are allowed to possess the structure or building constructed on the land. One type of property that a foreigner can purchase and claim ownership of is a condominium unit provided that at least 51% of the total floor area of the condominium is owned by Thais.

Another option is a leasehold contract where foreigners can lease properties for as long as 30 years with the possibility of extension.

It is difficult to say which option is superior to the others as each of them has its benefits and drawbacks. It is best to discuss the preferences and conditions with a property lawyer in Phuket to obtain expert advice not just on the ownership alternatives, but also on the property contract.

Why is Property Contract Review Important?

Whether you choose to purchase or lease a property, the contract is the groundwork that will determine the rights and obligations of the buyer and the seller. It is a critical step of the transaction process as it binds the two parties by law. In case there is a breach of contract, provisions stated in the signed contract will significantly affect the end results. Therefore, a comprehensive and well-prepared property contract can help prevent the parties from violating the agreed terms. It can also provide clear and correct information to ensure both the buyer and the seller understand all important elements being mentioned.

Generally, the seller will be the party arranging the contract and the contract may be drafted either in English or Thai depending on the circumstance. For a foreign potential buyer, the contract drafted in Thai must be translated for the buyer’s full acknowledgment. Yet, regardless of which language the contract is written in, it shall be thoroughly reviewed by a competent lawyer who is aware of the appropriate and common practice for a property transaction in Phuket before the contract is executed.

What are the Advantages of Property Contract Review?

A property contract contains all the important information concerning the seller, the buyer, and the property including provisions on how the property will be sold or leased, payment terms along with the outcome upon abusing the contract.

Oftentimes, foreign buyers may find the property contract in Thailand too general and only consists of basic terms and conditions. Having the contract reviewed by an experienced property lawyer can help address any loopholes that may eventually become a concern to the buyer. In case of some missing details that may trouble the buyer, the lawyer can assist in modifying the contract provided that both parties agree with the revision. For off-plan property, in particular, the contract should clearly state the timeline for completion including the liability of the developer or the seller in the event that the agreed schedule cannot be met.

The review process will help clarify any aspects and identify hidden clauses in the contract. This is to ensure a smooth process in obtaining the property and to protect the benefits of both the buyer and the seller before making a financial commitment.

Property contracts can contain ambiguous or complex legal terms which can cause misunderstandings and disagreements between the parties. The contract review can also be a solution in such situations.

Furthermore, it can save the buyer time and money as potential issues can be pinpointed and analyzed by a qualified property lawyer during the review process. This immensely reduces the risk of having to go through litigation should something problematic occur down the road.

Property Contract Review Process in Phuket

Depending on the situation, the property contract may be prepared by the seller or the buyer. In some instances, the proposed contract can be very broad or considered a standard contract without crucial provisions detailing the needs of the buyer. If that is the case, the potential buyer can request to disregard the proposed contract and ask the lawyer to draft a new one or make necessary adjustments.

Hence, the first step is to consult with a property lawyer in Phuket to discuss the buyer’s unique circumstances and clarify any concerns that the buyer may have regarding the transaction and the contract itself.

The lawyer will carefully examine the contract to make certain that all essential provisions and the buyer’s needs are incorporated into the contract and are enforceable by law. This may include the identification details of the owner and the buyer, the payment terms and schedule, the size and dimensions of the property, and the basic rights and responsibilities of both parties, for instance.

Other fine points will also be scrutinized, such as matters regarding property tax, deposit payment, penalty, and liabilities in case of contract breach or unsuccessful transaction. It is the lawyer’s responsibility to make sure that there are no obscure clauses that may elicit troubles in the long run.

Once the amendments are concluded, there shall be a negotiation with the seller to come to an agreement on the changes. Then, the contract can be finalized after both parties concur on its content.

Should You Hire a Lawyer for Contract Review?

A thorough contract review requires the expertise of a qualified lawyer. A Thai property lawyer who has years of experience in drafting and reviewing the contract will be able to spot any potential problems and suggest solutions considering the interests of the buyer. As the buyer may not be comfortable with legal terms, the lawyer can provide a detailed explanation and ensure that the clauses in the contract are enforceable by Thai law. In addition, a Thai lawyer who is proficient in English can assist with the translation of the contract.

Our legal representatives in Phuket are familiar with key information regarding property transactions and developers in the area. Apart from contract review and amendments, we can provide support in negotiating with the seller for the fairness of the contract. Contact us today and get expert advice on your property concern.

Siam Legal (Phuket)

123 / 27-28 Moo 5, Bangtao Place, Cherngtalay, Thalang, Phuket, 83110, Thailand
Phone: +66 76 326 322

Siam Legal Phuket