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BUYING THAILAND REAL ESTATE: PRE-CONSTRUCTION OR OFF PLAN CONDOMINIUMS The Thailand real estate market has seen a significant shift in property development for the past decade. The market for white picket fences dwindled, while the demand for the bold and imposing high-rise condominiums in Thailand sky-rocketed. Young professionals, executives, families, even retirees are all lured to invest in a condominium, especially in a country as beautiful as Thailand. The market is so vast that condominium units are mostly sold out even before construction is completed. Thus, the fascination of a more cautious investor: why are people willing to pay big amounts of money for an investment as intangible as a plan on a piece of paper? In a pre-construction or off plan condominium selling scheme, condominium units are sold to buyers at a very early stage in the construction process, in fact even before a single shovel actually hits the ground. At this stage, developers are more than willing to sell the condominium units at a relatively and substantially discounted price to finance the project. Although, inherently risky, buyers eagerly part with their hard earned money to buy off plan condominium units not only because of the substantially discounted prices but more so in consideration of the forthcoming appreciation of its value once completed. Property investment in Thailand is indeed fraught with risks, especially in a foreign country such as Thailand where property laws and regulations are pervaded with the peculiarities of its culture. However, a prudent buyer can significantly minimize his exposure to risk and safeguard his investment by employing the following precautionary measures. First, it is important to have a working knowledge of the Thailand real estate terms so as not to be bamboozled by the fever pitched monologue of a salesperson. Secondly, conduct due diligence to check the land title deeds in Thailand to ensure that it is free from liens and encumbrances, verify that the developer is the absolute owner of the land, ascertain the reliability and financial standing of the developer, and make sure that the necessary land development licenses are in order. Most importantly, before you sign any contracts make it a point to use the Thai Property legal services of Thailand Lawyer because the legal jargon in such contracts can be quite tricky. The following are among the essential provisions in a pre-construction investment contract: construction timeframe, price schedule, penalties for default or delay in payment or construction, rescission in case of default, and forfeiture of payments. These provisions are critical in defining the remedies and liabilities of the parties in the event of dispute. Thus, a mere cursory reading of the contracts can be a recipe for disaster. The services of registered and reputable lawyers are crucial and indispensable. Pre-construction investment can indeed be risky. However, with a measure of caution, proper due diligence, and sound contract, it can be a highly profitable venture in the long run.Siam Legal International is Thailand largest property conveyancing firm with law offices in Phuket, Pattaya, Hua Hua Hin, Chiang Mai, Samui and Bangkok. For a free copy of our Legal Guide to Thailand Real Estate please visit our website at www.siam-legal.com
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