Secure Your Place inParadise - Thailand RealEstate Legal Guide 2013
Secure Your Place in ParadiseThailand Real Estate Legal Guide 2013Thailand Real Estate Legal Guide 2013 Reasonable acquisitions structures for an invest- ment in villas, resorts, condominiums and land Field-proven techniques to identify and resolve typical and unexpected land issues and hurdles Contracts and agreements - which are required, which are advisable and which should be avoided Signing and closing - without proper registration and documentation the deal is not done
In reality there are just three options to invest inreal estate in Thailand Buy Thai land and do not Buy a condominium use a Thai nominee (or just lease it) Rent the land (and build Use a Company Limited your villa on your own) (but be very careful)
The acquisition of real estate in Thailand• As a general rule, a foreigner (or foreign company) is not allowed to own land in Thailand. Most important exception is the purchase of a condominium. There are some special regulations for industrial sites.• The use of "nominees", that means Thai to hold the legal ownership on behalf of a foreigner, is prohibited and subject to criminal fines• It is no secret that large parts of industrial, agricultural and touristic areas of Thailand are controlled by foreigners. Typical acquisition structures are the use of a ✓Limited company ("Co. Ltd.") with Thai majority shareholding but foreign majority voting rights and ✓long-term lease agreement of 30 years with one or more extension options.• Both structures have specific risks and disadvantages, which have to be reviewed carefully.• The acquisition process should include a comprehensive real estate due diligence with, above all, a title search.
Acquisition of a condominium unit from thedeveloper (or from the previous buyer) Section 19 bis of the Condominium Act: "Ownership by aliens in each Standard format of purchase and sale condominium ... shall not exceed 49% of agreement (Aor. Chor. 22 form) as the total area of such condominium ... promulgated in the relevant Ministerial Regulations. Any deviations from Aor. Chor. Additional transactional documents 22 standard form must be for benefit of ✓Original Reservation Agreement buyer only, otherwise void and subject to ✓Acknowledgements of Receipt by sanctions. Standard form is intended to (Original) Buyer favor and protect purchaser. Most Developer Developer developers are using standard agreement with additional terms and condition. Additional closing documents ✓Land office form of the condo unit sale and purchase agreement ✓Title deed for condominium unit Condo Unit Sale and Only in case of a ✓Land office official receipt for the Purchase Agreement pre-used condo unit registration of conveyance of the unit ✓Acknowledgements of receipt of purchase price and registration fees ✓Household registration booklet (Original) (Original) Novation Second Second ✓Certificate of construction granted by Buyer Buyer Agreement Buyer Buyer the Civil Construction Department to certify that the construction was in compliance with the applicable law and regulations
Some typical issues in the planning and negoti-ation of condo sale and purchase agreements• How is it efficiently guaranteed that the registration as foreign quota is accepted at the land office ("direct freehold")?• Additional thoughts, steps and documents required if buying in pre- construction projects ("off plan"), especially late completion, construction standards and insolvency risks• Additional thoughts, steps and documents required if buying not from the developer but from the current owner, especially the drafting of the novation agreement• Issues with the management and financing and its impact to the buyer• Issues with the common property which includes the condominium management office, common area facilities and equipment, any other property or facilities maintained with funds paid by unit owners as common property service fees• Use of escrow agents under the Escrow Act 2551 (2008) - a valid option?• Tax planning of the investment for the long-term benefit of the buyer, above all under an exit scenario
Condominium customer protection• Standard Purchase and Sale Agreement ✓Standard format (Aor. Chor. 22 form) defines minimum standards to favor and protect buyer. Section 6/2 of Condominium Act No. 4 (2008) ✓Any deviations must be beneficial for the buyer or are void and subject to fines and criminal sanctions for violations by seller ✓Generally all advertising and marketing materials are deemed to be integral part of the contracts• Special licensing requirements for a condominium ✓Condominium plan must be provided showing the access to public road system, details of individual units and common property owned by all condominium owners jointly ✓Project common areas and facilities must be clearly described in advertising and marketing materials. ✓Developers must certify of being lien-free with exception for the projects mortgage.
The up-to-date and complete presentation isavailable for you as a free download at ✓www.scribd.com/collections/4054603 ✓www.pugnatorius.com
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