A sales contract is a legally binding agreement that outlines the terms and conditions of a property transaction in Thailand. Whether buying or selling real estate, reviewing the contract carefully is essential to protect legal rights, avoid disputes, and ensure compliance with Thai laws.
Many buyers, especially foreign investors, sign sales contracts without fully understanding the legal terms, payment obligations, and potential risks. A well-drafted and reviewed contract safeguards both parties from fraud, misrepresentation, and hidden liabilities.
This guide explains why sales contract review is important, key clauses to check, legal risks to avoid, and the role of lawyers in contract review.
1. What is a Sales Contract in Thailand?
A sales contract (purchase agreement) is a legal document that details the terms of a property transaction. It ensures that both the buyer and seller agree on:
✔ Price and payment terms
✔ Property details and ownership verification
✔ Transfer procedures and responsibilities
✔ Warranties and penalties for contract violations
💡 Example: A foreign buyer purchases a condominium in Bangkok. The sales contract confirms the purchase price, deposit schedule, and transfer date. Reviewing the contract ensures no hidden clauses or unfair terms.
2. Why Sales Contract Review is Important
🔴 Prevents Fraud and Scams – Some contracts contain false claims or hidden costs.
🔴 Ensures Legal Compliance – Thai property laws restrict foreign ownership of land.
🔴 Clarifies Payment Terms – Some contracts have unclear deposit and refund policies.
🔴 Protects Against Hidden Liabilities – Unreviewed contracts may include undisclosed debts or encumbrances.
💡 Tip: Always review the sales contract before signing or paying any deposit.
3. Key Clauses to Review in a Sales Contract
3.1 Property Details and Ownership Information
✔ Full legal description of the land, house, or condo unit
✔ Verified title deed number (Chanote, Nor Sor 3 Gor, or Nor Sor 4 Jor)
✔ Seller’s full name and ownership status
🔴 Risk: Some sellers list properties they don’t legally own, leading to fraud.
💡 Tip: Check the title deed at the Land Department to confirm ownership.
3.2 Purchase Price and Payment Terms
✔ Total purchase price in Thai Baht (THB)
✔ Deposit amount and due date (usually 10–30% of the price)
✔ Payment schedule and installment conditions
✔ Final balance payment and transfer date
🔴 Risk: Some contracts state “non-refundable deposits”, making it difficult to cancel.
💡 Tip: Negotiate a fair refund policy in case of contract termination.
3.3 Foreign Ownership Restrictions (For Foreign Buyers)
✔ Foreigners can only buy condos (up to 49% foreign quota)
✔ Land purchases must be through leasehold agreements or Thai companies
✔ Contract must comply with the Condominium Act or Land Code Act
🔴 Risk: Some agents illegally offer “nominee structures” for land ownership, which is illegal in Thailand.
💡 Tip: Foreign buyers should consult a lawyer before signing contracts.
3.4 Property Condition and Warranties
✔ Confirmation that the property is free from encumbrances or legal disputes
✔ Warranty that the property has no unpaid taxes, utility bills, or maintenance fees
✔ Developer or seller guarantees legal construction permits
🔴 Risk: Some properties have outstanding debts, lawsuits, or illegal construction.
💡 Tip: Request a legal property check from a lawyer before signing.
3.5 Transfer of Ownership Clause
✔ Date and process for transferring the title at the Land Department
✔ Agreement on who pays transfer taxes and fees
✔ Any obligations for seller to assist in legal registration
🔴 Risk: Some contracts do not specify tax responsibilities, leading to unexpected costs.
💡 Tip: Negotiate tax and fee responsibilities before signing the contract.
3.6 Penalty and Termination Clauses
✔ Penalty fees if the buyer or seller cancels the contract
✔ Conditions for refunding deposits in case of legal issues
✔ Agreement on dispute resolution (court or arbitration)
🔴 Risk: Some contracts include one-sided penalty clauses favoring the seller.
💡 Tip: Ensure the contract has fair terms for both parties.
4. Legal Risks of an Unreviewed Sales Contract
❌ Fake Sellers & Fraudulent Documents – Some properties are sold by scammers or unauthorized persons.
❌ Hidden Property Debts – Some properties have unpaid loans, taxes, or lawsuits.
❌ Unclear Refund Policies – Buyers may lose their deposits if terms are unfair.
❌ Illegal Foreign Ownership – Foreigners buying land through nominee structures risk government seizure.
❌ Zoning and Land Use Restrictions – Some properties are in areas where construction is illegal.
💡 Tip: A property lawyer can identify hidden risks before you sign the contract.
5. Role of a Lawyer in Sales Contract Review
A real estate lawyer in Thailand can:
✔ Verify title deeds and seller legitimacy
✔ Review and amend contract terms
✔ Ensure compliance with Thai property laws
✔ Negotiate fairer payment terms and refund policies
✔ Represent the buyer in contract disputes
💡 Tip: Even if the contract is in Thai, a lawyer can translate and explain the key terms.
6. Steps for Reviewing a Sales Contract in Thailand
Step 1: Obtain the Draft Contract
✔ Get the contract from the seller, agent, or developer.
Step 2: Conduct Due Diligence
✔ Verify the title deed, zoning laws, and ownership rights.
Step 3: Review Contract Terms
✔ Ensure payment terms, property details, and ownership conditions are correct.
Step 4: Negotiate Amendments
✔ Request fairer terms or additional legal protections.
Step 5: Sign and Register the Contract
✔ Sign the final contract and register the property transfer at the Land Department.
7. Special Considerations for Foreign Buyers
✅ Buying Condos – Foreigners can own condos under the 49% foreign quota rule.
✅ Leasehold Agreements – Foreigners can lease land for 30 years (renewable).
✅ Company Ownership – A foreigner can own property through a Thai Limited Company (with conditions).
✅ Land Office Registration – All property transfers must be registered at the Land Department.
💡 Tip: Foreign buyers should hire a lawyer to avoid legal mistakes.
8. Conclusion
Reviewing a sales contract in Thailand is crucial to ensure a secure and legal property transaction. Many buyers face hidden fees, fraud, or legal disputes due to poorly reviewed contracts.
✔ Key Takeaways:
- Always review the title deed and confirm ownership before signing.
- Ensure fair payment terms and refund policies in case of cancellation.
- Foreign buyers must comply with Thai ownership laws (e.g., leaseholds, condos).
- Legal assistance is essential to avoid fraud, hidden debts, and unfair clauses.
- Negotiate tax and fee responsibilities before signing the contract.