A developer contract in Thailand: Thai quota by mistake, the transfer certificate and the addendum

A foreigner loses the right to freehold in Thailand through two mistakes: the contract is marked Thai quota instead of the 49% foreign quota, or the money for the unit did not come from abroad. Both surface on registration day, when almost nothing can be fixed. Both are caught by reading the draft contract.

Can you read the contract before reserving?

Yes. In Thailand the draft sale and purchase agreement is open information: the developer sends it on request even before you choose a unit. Reviewing the contract before signing is the buyer's legal right.

A practitioner with 12 years in the Thai market advised always doing so: sometimes the wording of the contract decides whether to buy at all. The contracts are long and need to be read in full.

Why is a “Thai quota” tick dangerous?

In a condominium 49% of the area may belong to foreigners and 51% to Thais. The quota is counted in square metres, not in the number of units, and the foreign part sells out first.

If the contract states Thai quota by mistake, it goes into the system automatically. When ownership is being registered, the buyer will be told their unit sits in the Thai part.

Moving a unit from the Thai quota to the foreign one is practically impossible: there are almost never any free foreign square metres. The reverse move — from foreign quota to Thai — is done without restriction.

Why do you need a certificate of transfer from abroad?

To register a unit as freehold, you must prove that the whole amount arrived in Thailand from abroad. The bank issues the certificate, and it is presented at the land department at the moment of registration.

• the sending country does not matter: a Russian citizen may pay from an account in Estonia;
• the money must arrive by SWIFT bank transfer;
• without the certificate, ownership will not be registered in a foreigner's name.

The market has offers to “sort out” the certificate after the fact. The land department knows about them and challenges such papers. There is one workable route — paying from abroad from the very start.

Can the developer's contract be changed?

It can, through a supplementary agreement — an addendum. Developers dislike it: the text is prepared by their lawyer, and every amendment has to be agreed with them.

The contract is drawn up in two languages, Thai and English. At the end there is a clause stating that both versions are identical, and a proviso: disputes are settled under the laws of the Kingdom of Thailand.

What to check in the draft

• the quota is foreign, not Thai;
• the form of title is freehold, not a lease;
• the payment schedule and what it is tied to — dates or construction stages;
• the terms for refunding the deposit;
• who pays the registration fee.

For how the transaction itself works, read our piece on buying from a developer step by step.

Frequently asked questions

Will a Thai developer show the contract before the reservation is paid?

Yes. The draft contract is sent on request before signing and before a unit is chosen — it is the buyer's right.

Can a unit be moved from the Thai quota to the foreign one?

Practically not: the foreign quota of 49% of the building's area is usually used up. The reverse move is possible without restriction.

Where must the money for a freehold unit come from?

From abroad, by bank transfer. The bank issues a certificate of receipt; without it the land department will not register ownership in a foreigner's name.