Issue 3 | Feature brought to you by Bangkok Base Law Group, Antares Advisory Ltd
Think you can get away with not hiring a lawyer to review that property you want? Think again.
Ask anyone in Thailand’s real estate industry: the number one recommendation professionals make to expatriate home buyers is to hire a local lawyer before signing anything.
This piece of advice may sound obvious to some, but it is a key component to the buying process that often gets overlooked. Perhaps it’s because home buyers deem it unnecessary, naively trust an agent or land office, or wrongly assume that processes and standards are the same in Thailand as they are in their home country. Whatever the reason one wouldn’t hire a lawyer before making a purchase, it puts the buyer at a serious risk of being in an extremely expensive and often irreparable situation.
Khun Laksamon Dhamminch, L.L.M. a property-focused lawyer at the renowned Bangkok Base Law Group, Antares Advisory Ltd, has seen it all. From problems with private sellers to major developer issues, she says that if a contract was signed, there’s often nothing that a lawyer can do to help. This is why prevention, (hiring a lawyer to review everything from the paperwork to the property), is irrefutably the best method in safely and successfully buying real estate.
“There is a lot of great property in Thailand, and there are a lot of honest sellers, but even seemingly safe purchases can have hidden problems,” Khun Laksamon said. “Yes, it ’s an investment to hire one, but you take an enormous risk if you don’t.”
From businesses going bankrupt, to agents or partners suddenly becoming unresponsive or disappearing altogether, in Thailand there are many social reasons why lawsuits or settlements are next to impossible to conclude in a reasonable amount of time, at reasonable operation costs.
“It can be difficult to point fingers here; authorities can be paid off, and insurance is too expensive and hard to come by in Thailand,” Khun Laksamon said. “But if you see a lawyer at the beginning of the process, they will tell you the truth about a property—they can advise you to make certain demands which will save you a lot of trouble and money in the future.”
Distressing or entertaining, call these anecdotes what you will; but they’re all firsthand accounts from Khun Laksamon’s legal experience:
A private seaside property, without water
“I had a Norwegian client who was very interested in a luxury property in Phuket. There was no other property he would even consider—he had found ‘the one.”
When we did our due diligence inspecting the property we were not able to find a clear water supply to the residence. We were told that it was provided by the development’s own water-treated pond, but we were not satisfied with this answer, as it would mean that every property in the development was relying on only one source.
To investigate, we went to the pond’s management team and asked to see the deed, however we were told it was not possible to review… because the pond was on leased property. The lease was only for three years! If and when the lease would run out, everyone in the development would be completely cut off from their only water supply.
Our client still was adamant about buying the property though, so we made a demand to have the developer put in a 200k THB water supply directly under the property before the purchase was made. Thankfully our client called us to review before he signed the contract, otherwise he would have been stuck with a water-less mansion, three years later.”
“Katod Krap; your villa is in our way”
“A few years ago we were approached by a foreigner who was in a heated debate with the electric company, which claimed that his land plot was overlapping some land that was designated for a public road. They wanted to put a new electric pole right through the living room. Unfortunately, the client had signed his contracts without having a legal professional review it and hadn’t realized the overlap in land ownership.
We did sue the developer, however they had already claimed bankruptcy. In the end, the villa had to be destroyed and the buyer walked away with nothing but a piece of paper from the court.”
You want to buy this sliver of land? That’ll be 30 million baht please.
It’s not just private home owners who can run into problems. Even major developers are at risk without an assiduous lawyer.
“We had a case with a foreign developer who had his eye on a plot of land that was occupied by some local people and their houses. After a long debate, the developer won the sale and bought the land from them. It was a big area; enough to build a large condominium on, which the developer then invested 100 million baht constructing. When the project was nearly done and it was time to connect it to the road with a driveway, the developer realized a major, major issue.
The original land owners had withheld a very thin piece of land between the road and the new development from the sale, landlocking the building from public accessibility. The developer’s hands were tied, and he was forced to pay an additional 30 million baht for the road access.”
Bottom line; don’t be another disaster story
“All of these situations could have been so easily avoided with a simple legal review before contracts were signed, but sometimes it’s just too late,” Laksamon said. “Even if a lawsuit happens the defender has many ways of prolonging the process, making the plaintiff spend a lot of money on his lawyer. The plaintiff often has to give up, determining that their investment was less than the costs and struggles involved with the lawsuit.”