Purchasing a dream home in Phuket

March 26th, 2013

The Real Estate Industry in Thailand is poorly regulated and this article will assist you in buying property.

Due diligence on title and the property

A property due diligence should always be conducted on the land title and building permit for any structure, and verification of road access should be made. Further, a surveyor should verify the size and particulars of the location of the land as there are certain areas where construction is prohibited by law.

Legal information on purchase and holding rights to property

Subject to limited exceptions, freehold title to land is not available to foreigners, although foreigners may hold the ownership of buildings and condominium units. Therefore, acquisition of an interest in land in a foreigner’s personal capacity must be by leasehold, usufruct or usage rights for land. As a result, while houses can be purchased or built in  the name of a foreigner the developer/seller will remain as the land owner and will be the purchaser’s lessor under a land lease.


Property under construction generally requires payment through installments determined by milestones in completed construction stages. The payment schedule should accommodate the purchaser’s budget and the milestones themselves to ensure that the payments fairly reflect the value of the works completed at each stage and are not unduly front-loaded thus leaving sufficient funds for the developer to complete the structure.

Contract signing

After the purchaser has made his decision to buy, the next step usually requires a Reservation Form and payments of a deposit. This commits both parties to the process and triggers a defined time within which the contract terms should be settled. Having made a reservation, the parties will need to gare on the sales contracts. The contracts will need to be carefully drafted according to the best interests of both parties. Competent developers will have all the necessary base documents in place to ensure a smooth transmission for the purchaser and his lawyer to review. For purchasers, a local attorney or adviser is beneficial and need not be expensive as it’s common to agree to a fixed fee rather than an hourly rate basis. A reputable firm will have no hesitation to provide an initial free consultation.

Ownership or rights to property

A properly drafted contract is the purchaser’s best security, and it’s best if the contract provides that the purchaser will hold ownership of the house. As for the land, a land lease in Thailand is for a term of 30 years. Purchaser’s should require that their long term land lease contracts be renewable and may be transferred to a third party, and that the lease rights are inheritable. Lesser known vehicles with which to acquire land interests in Thailand such as Usufruct can extend for the life of the purchaser. Your local attorney can advise.


Any property will suffer small defects after construction is completed and a good developer will promptly remedy the same.  While new condominium unit purchases carry a statutory one year warranty by law, the purchaser of a villa will have to rely on his contract. Typically the structure itself will have a two year warranty, with non structural items (water pumps and appliances, for example)guaranteed for one year. The supplier or manufacturer should provide separate warranties for swimming pools. The laws in Thailand do not provide protection against latent defects (those defects which might appear at a later stage but which previously were undetectable to he naked eye) so these need to be provided for within the construction contract itself.

Article courtesy of Sam Fauma, Director International Law Office

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