Buying A Condominium
One of the most common methods of legally acquiring property in Thailand is to buy a condominium. Although many foreigners have chosen to buy property of this type, “Caveat Emptor” (or buyer beware in English law) should still be kept in mind.
Buying and selling Condominiums has proved to be a very lucrative business in Thailand, but over supply in some regions such as Bangkok, Pattaya and Phuket have encouraged buyers and developers to seek new opportunities in less known, and in many cases more desirable locations, thus maintaining a thriving market. For those foreigners wishing to buy a condominium in Thailand (or perhaps more than one) there are several caveats (or cautionary warnings) which must be considered, and adhering to such caveats will ensure that compliance with Thai Law is met.
For the purposes of this article, we will refer to them as “Tips”.
Tip 1: The foreign buyer must meet with the conditions as set out in the Condominium Act of Thailand and having complied with such terms, he may then be able to purchase a condominium. Basically, the terms stipulate that the foreigner must have permission to reside in Thailand (i.e. an acceptable visa) or that he or she is a certified resident as defined by the immigration laws of Thailand.
Tip 2: Having established that the foreigner can legally reside in Thailand, he can then purchase a condominium but is restricted from owning more than the allowable maximum limit of condominium units, which is currently 49%. This is usually based on the total floor area of units or apartments in a given condominium project. There are however some exceptions to this rule, but they are generally limited to certain municipalities within Bangkok, Pattaya etc.
Tip 3: You must consider whether to buy Freehold or Leasehold. Freehold is generally accepted as the preferred method as the legal title can be in your own name, and easily transferable to a new owner. Having said that, leaseholds are also a safe and recognized method of acquiring a condominium, and can be agreed for a maximum of three 30 year terms which run concurrently. You can read more about this subject in our article Leasehold Vs Freehold.
Buying a condominium unit directly from an established developer is more advantageous as these developers are more experienced in the field or have greater financial backing.
Tip 4: You may wish to consider who you are actually buying the condominium or apartment from. Building and selling condominiums and apartments has become big business in recent years and can be very lucrative for the developer. As such, it can attract inexperienced and under qualified developers and contractors who are all keen to benefit from relatively easy sales. It is very important to consider the history and reputation of the developer before committing to buy any apartment or condominium in Thailand.
Tip 5: Know your market! This is especially true if you are buying an apartment or condominium for rental income purposes or as a general investment. Make sure that the project is in a good location in which you yourself would be happy to stay. Obviously, the better the location… the better the return. Also, it is often the case that ground floor units are sold for less than an upper floor unit by the developer. The shrewd buyer will be aware that a “garden unit” is often more attractive to many people than a sea view unit, and genuine bargains can be had.
Tip 6: Ensure that you are aware and familiar with the payment terms which should all be clearly set out in writing prior to the purchase agreement. Deposits can range from anywhere between 5% and 20% depending on the developer and his legal commitments based on loans he may have secured in building the project. Make sure that you are clear on annual maintenance fees, and if a management program has been set up in which you wish to be included, make sure you understand the terms of the agreement.
Tip 7: Thai Laws regarding not only the purchase of condominiums and apartments, but other property too are subject to change. As a result of this, and to ensure that conflicts and errors do not occur, it is very important to consult a legal expert for up to date advice.
Contact us to speak with one of our legal representatives.