Basic Details in a Written Contract when you Buy a Condo in Bangkok
We discussed in the article “Condominium Sale and Purchase Agreement” about the need to have a written contract when you are buying a condo in Bangkok, especially a condo which has been pre-owned. This contract is usually called a Sales and Purchase Agreement (“S&PA”) and should contain the key terms which have been agreed in respect of the sale.
The contract may be prepared by the real estate agent involved in the sale or the vendor’s legal advisor or your legal advisor. That is, if either of the parties have such an advisor, as many condo transactions take place without legal assistance. For new condos, the developer will usually prepare the S&PA.
Some of the key terms which need to be included are as follows:
1) Holding or Booking Deposit: sometimes the purchaser will make a Holding or Booking Deposit of, say, Baht 50,000 or 100,000 or whatever is agreed. This is to reserve the condo unit and take it off the market whilst the S&PA is being prepared. This Deposit is not payable in all cases but, if it is, you need to know what happens to this Deposit if there is a problem with the sale or you change your mind;
2) Deposit payable upon signing the S&PA, usually 10% of the agreed purchase price. When and how is it payable and who actually holds this pending completion of the transaction are key questions which need to be answered;
3) Balance of monies due, usually around 90% of the agreed price. Again, when and how is this paid? Via bank transfer or more likely cashier’s cheque(s), with probably part of it paid in cash to cover the transfer taxes associated with the transaction;
4) Which furniture (if any), fixtures and fittings are included in or excluded from the sale? A list of excluded items is usually the easiest to prepare, ideally with a photo-inventory;
5) Transfer taxes, stamp duty, local/withholding taxes: who is responsible to pay these? If these taxes are to be shared, what percentage will each party bear?
6) Default clauses: that is, if one party backs out of the transaction for no reason or with reason what happens to the Deposit(s)? Often, if one party backs out without a good reason, there is often a penalty payable. One thevendor side it may mean they have to return the deposit to the purchaser with an additional amount. On the purchaser side it may mean that the deposit(s) already paid is(are) forfeited.
In the event there is a good reason for the sale not to proceed such as a problem with the condo title or a lien on the property, the consequences will need to be addressed in the contract.
It’s wise to have a legal advisor to help with this contract unless your real estate agent is capable of helping guide you through the S&PA and associated processes.