Among the various ways of owning property in Thailand, the Foreign Freehold Condominium stands out as the most convenient and straight-forward. This way of ownership exists since the Condominium Act of B.E.2522 (1979), which set the regulations for all the modern condominium developments. In particular, it made it possible for a foreign individual to purchase condominium property in his personal name. Such a property must be part of a condominium development built according to its specific regulations, and can only be registered as foreign freehold in the proportion of 49% of the total floor area of the condominium project.
What to look for while choosing your Foreign Freehold Condominium
Not all developments are compliant with the regulations of the Condominium Act, so it's always safer ask whether a property can be purchased as Foreign Freehold. On the good side, while most condominiums are large and tall buildings, in Phuket there are many low-rise, low-density condominiums which also comply with the Condominium Act regulations, and may offer an interesting alternative compared to a small villa. Also, since the ratio of units that can be registered as Foreign Freehold is limited to 49%, these units tend to be sold-out quite quickly, so it's better to be fast when making an inquiry.
Going Forward with the Reservation Deposit
Once you have found the property of your dreams, or a juicy investment, that you really like and is available with Foreign Freehold ownership, the first thing to do is to place a Reservation Deposit. This will reserve the your right to purchase the unit for while you can proceed to the necessary legal checks. It usually amounts to a few hundred thousand THB, and is considered as part of the unit payment. From this moment you usually have 30 days to review the Sale and Purchase Agreement, as well as to proceed with the Due Diligence process. This means verifying all the legal documents regarding the property, and it is strongly advised to hire a Law Firm who will do it for you, as well as assist you with any modifications to the Sale and Purchase Agreement, all the way to the ownership transfer registration.
Verifying the Legal Documents
This step is a very important one, and should be done by a professional Law Firm that is familiar with Property Law. More than just checking the documents, a whole background check of the development is recommended, as well as the history of the Land Title Deed in some areas. Among the documents to be reviewed are the Sale and Purchase Agreement, Land Title Deed of the project, Building Permits, Company Certificate of the Developer, as well as any prior agreements made by previous owners if this is not a new unit. The unit and the project should also be checked for any outstanding liabilities and encumbrances, as well as the financial health of the developer if it's an off-plan purchase. You should also thoroughly review the Sale and Purchase Agreement, and not hesitate to point out to your attorney if there are any points you are uncomfortable with. Be sure the Sale and Purchase Agreement mentions you are purchasing the unit as Foreign Freehold.
Signing a Sale and Purchase Agreement
The main binding step in your purchase is then to sign the the Sale and Purchase Agreement. For the purchase to be complete, it also requires a sizable deposit to be made, usually around 30% of the purchase price for off-plan projects. If you are not in Thailand at the moment of the signature, you can be sign and exchange the Sale and Purchase Agreement electronically by virtue of the Electronics Act. The exchange of the signed hard copies of the Agreement can then take place later by courier mail.
From this stage on, the only step remaining is the registration, which is normally handled by your attorney. Again if you are unable to be in Thailand on the transfer date, you can make a Power of Attorney enabling your attorney to do it on your behalf. Once registered, you will have your name at the back of the Condominium Title Deed, and will be the rightful owner of the property without any restrictions. This makes life much easier for future transactions, such as re-sales and inheritances.