Buying a condominium in Thailand may not be as simple as it would be in your home country. There are certain steps that need to be taken and some procedures that need to be obeyed. If you want to buy a condominium in Bangkok, or perhaps you are in the middle of it right now – our 6 easy steps will make the process much simpler.
Step One – Due Diligence on the Condominium
Upon finding the condominium you wish to purchase it is recommended that you hire an Estate Agent or lawyer and ask them to make a due diligence of the property which include for instance checking the copy of the title deed given by the seller against the original kept at the land department office and insuring that the information given by the seller are consistent with the information contained in the original title kept at the Land Office.
Among other the due diligence will allow the buyer to confirm that:
– The seller is the actual owner of the unit.
– There is no mortgage or other charge on the unit.
– The size of the unit is as stated by the seller.
– The due diligence may also include checking with the Court that there are no legal proceedings against the seller that could affect the outcome of the sell
– The assessed value of the unit as some of the government fees will be calculated based on the sale value of the building
– The previous transactions executed on the building which will enable you to know at what price the seller purchased its unit (note that this information is correct when the seller purchased his units from a developer. If he/she purchased from another individual the parties may have declared a lower selling price to reduce the transfer tax)
If the buyer is a foreign person it is recommended to check with the juristic person of the condominium the ratio of foreign ownership in the building. (Note: condominiums allow usually 49% of a building to be foreign owned).
The buyer should also request to see a copy of the Tabien Baan and to check whether the seller registered the condominium unit as its personal registered address. If it is the case the seller will have to move its registered address out of the condominium unit.
Step Two – Sale and Purchase Agreement
The second step in buying a condominium in Thailand is to execute a sale and purchase agreement and to negotiate the sale and purchase price, the amount of the deposit, and the allocation between the seller and the buyer of the costs of transfer including taxes. The amount of the deposit is anything from 5 to 20%. Our recommendation is to keep the amount of the deposit as low as possible and to organize the transfer of the unit as quickly as possible after the date of the execution of the land department. Note: In the case of the sale and purchase of a real estate property the transfer of ownership is only complete upon registration of the transaction at the Land Department Office
Usually taxes and costs of transfers are shared between the seller and the buyer 50/50 but depending of the outcome of the negotiations the seller or the buyer may be liable for 100% of all costs and taxes
Individual sellers do not in general offer any warrantee on the condominium unit. If the condominium unit is older than two years the guarantee of the developer will have already expired.
Step Three – Transfer of The Funds
In order to be allowed to be buying a condominium in Thailand freehold the foreign buyer will have to prove that the whole amount of the purchase price declared at the land department is to be paid out of foreign currency transferred to Thailand by the foreign buyer. To be able to provide this proof the name of the foreign buyer must appear at one or the other end of the transaction.
– The fund must be transferred in foreign currency only.
– The fund must be transferred from an account under the name of the foreign buyer or to an account in Thailand with the name of the foreign buyer.
– Add on the transfer mention that the funds are transferred to purchase a condominium.
– If you purchase the condominium unit jointly with your wife add a mention that the money is transferred on behalf of both spouses (not mandatory).
Step Four – Document Preparation
If the buyer is an individual, he/she shall provide to its agents lawyer the following documents or information:
– Copies of the buyer passport including the page showing the visa showing the date of the buyer latest stay in Thailand (The parties do generally not attend the transfer but have representative handled the formalities on their behalf the date of latest stay is necessary in order to prepare the Power of Attorney the buyer grants to his representative)
– Copies of the Buyer married certificate and of the passport of the spouse. (Marriage certificates in English language do not need to be translated. Other languages need to be translated and the translation certified)
– If the buyer (the person buying a condominium in Thailand) is married but purchase the condominium unit under his/her name solely letter of authorization allowing the buyer to purchase the unit solely
– Name, first name of the buyers parents and of the parents of his/her spouse if they purchased the unit jointly
If the seller does not have a lawyer, the buyer lawyer should remain the seller to obtain the letter from the juristic person attesting the foreign ownership ratio and that the common area fee for the units has been fully paid. Without this document the transaction may not proceed. If the seller is late with the payment of its CAM Fees the seller must clear the debt before the sale being able to proceed
The seller shall request his/her bank to issue the Foreign Currency Exchange forms that will serve to prove that the sale and purchase price is paid out of foreign currency transferred to Thailand
If the unit is mortgaged the seller must contact the bank that hold the mortgage and request the bank to calculate the final amount due to clear the mortgage and to send an officer at the land department on the date of the transaction to clear the mortgage prior to the transfer.
Step Five – Payment Preparation
The Buyer and/or the Seller will pre-calculate the amount of taxes to be paid at the land department office on the date of the transfer of ownership.(2) The Buyer will prepare cashier check (or draft if the transaction is outside Bangkok) equivalent to the amount of the purchase price.
– If the unit is mortgaged and it is necessary to pay the bank the buyer shall prepare a cashier check equivalent to the amount of the debt to be settle to the bank.
– The buyer must prepare a cashier check (or draft(s)) at the order of the seller of an amount equivalent to the net purchase price of the unit (taxes and expenses not included) or of the balance due to the seller after payment of the bank mortgage (if any).
Once the cashier check(s) (or draft(s) have been purchased the buyer will send the copies of the check(s) (or draft(s)) to the seller and/or his bank to give them the opportunity to verify with the issuing bank that the check(s) or (draft(s)) are indeed real.
The Seller and/or the Buyer must prepare in cash the amount necessary to paid the taxes and government fees due on the date of the transfer.
Step Six – Registration of the Sale and Purchase of Units at the Land Department
The parties scheduled the date of the transfer at the land department.
The Buyer, Seller and the Bank (if the unit is mortgager) or their authorized representative must all attend the Land Department on the agreed date of the transfer. If one party is missing or not represented the transaction cannot go ahead.
The buyer representative will shows the original cashier check to the seller and or the bank representative.
Upon the seller representative giving the cashier check to clear the loan the bank will file the documents to release the mortgage on the unit (if any).
The seller and the buyer or their representatives will sign the sale and purchase form prepared by the land officer and the documents required for the transfer of the unit and will remit all the required documents to the land officer including the seller original duplicate of the title deed to the Land Officer. If one required documents is missing the transaction shall not go ahead.
Upon the Land Officer informing the parties that he is ready to remit the original duplicate of the title deed mentioning the name of the buyer as the owner of the unit to the buyer or the buyer representative the buyer or the buyer representative will remit the check to the seller or the seller representative and the parties will paid the taxes and costs due for the transaction.
The buyer or his representative receives the original duplicate of the title deed showing the name of the buyer as the new owner of the unit.
The seller representative will remit the keys of the unit to the buyer representative (and the key card) to the buyers representative (in some cases the keys may be with the agent or with the juristic persons). The seller representative remits to the buyer the house registration certificate (Tabien Baan). The house registration certificate is blue if the seller is a Thai and yellow if the seller is a foreigner (note that if the seller is a foreigner who never applied to be officially registered on the unit then the house registration will be blue as well).
The Tabien Baan is blank if the previous owner did not register the unit as its principal registered address. If the seller has registered the unit as its principal address he will have to remove himself from the Tabien Baan before or after the sale is completed. If the Tabien Baan is missing the new buyer may upon declaration of the loss apply for a new Tabien Baan.
The seller must prepare the documents for the transfer of the electricity and water meters to the buyer. Note that the buyer will have to refund to the seller the deposit paid by the seller to the electricity authority if this matter was not included in the sale and purchase price.
Conclusion on Buying a Condominium in Thailand
As you may see, buying a condominium in Thailand takes a bit more formalities and steps then let’s say in the US or UK. We are sure that if you follow these 6 steps, you will have no trouble with buying and owning a property in Thailand.