What a Thai Sale & Purchase Contract Must Contain

Whether you are a buyer or a seller, you should first understand what a sale and purchase contract is and what it needs to contain — this is essential to a successful transaction.

Houses and land are high-value assets classified as immovable property. By law, the process of buying and selling a house is different from an ordinary goods transaction: simply paying the price does not complete the transaction. Instead, it must be done through a formal written contract and registered before a government official (Civil and Commercial Code, Section 456).

For this reason, when buying and selling a house and land, a written “sale and purchase contract” must be signed, to serve as evidence that buyer and seller have reached a purchase agreement. This document can also support a loan application to a financial institution, or serve as evidence in legal proceedings if the contract is breached.

Before you prepare to buy or sell a house, whether as buyer or seller, we recommend first understanding what a sale and purchase contract is and what it needs to contain. Here is a summary of the key information:

What Is a Sale and Purchase Contract?

A sale and purchase contract is a written contract that establishes the legal relationship between buyer and seller. It expresses both parties’ intent to buy and sell, and typically includes terms on the deposit payment, to ensure that ownership of the property will be transferred within the period agreed by both parties, in accordance with the law. A sale and purchase contract only formally takes effect once both parties have completed all legal procedures and registered it at the Land Office.

Types of Sale and Purchase Contracts

Sale and purchase contracts fall into two broad categories, depending on the type of property:

1. House and land sale and purchase contract:
   • Used for transactions involving a house together with land, or land alone. The contract must include the land title deed number, a description of the building (if any), and the transfer date, among other key information. This type of contract applies to purchases of a detached house, a townhouse, or undeveloped land.
2. Condominium sale and purchase contract:
   • Used specifically for purchasing a condominium unit. The contract must specify the condominium title deed number, the project name and unit number, and include provisions on common facilities and rights of use. The transfer timeline for a condominium can vary depending on construction progress, ranging from 1–3 months for a completed unit to 12–24 months for a unit still under construction.

When Do You Need a Sale and Purchase Contract?

A sale and purchase contract is needed in situations such as:

• When the buyer needs time to raise funds or apply for a bank loan.
• When the seller needs time to prepare the relevant documents or handle other matters.
• When the condominium being purchased is not yet complete, in which case the contract serves as the buyer’s guarantee of obtaining the property once it is completed.
• When buyer and seller need to set special purchase conditions, such as installment payments or repairs to be completed before handover.

A sale and purchase contract is an important tool for protecting both parties’ interests, particularly when the transaction cannot be completed immediately.

What Is the Land Sale and Purchase Document (Written Contract)? When Is It Used?

The land sale and purchase document, also known as the “land transfer document” (form Tor.Dor.13), is a written contract based on a government-standard format, which must be registered at the Land Office. Once buyer and seller have reached agreement under the sale and purchase contract and completed the relevant payments, the Land Office will formally register the transfer of ownership, establishing the buyer’s legal title.

How Does the Sale and Purchase Contract Differ From the Land Transfer Document?

These two types of documents have similar names and both relate to house and land transactions, which can cause confusion, but they differ in the following ways:

1. Relationship:
   • The sale and purchase contract is a written agreement expressing the intent to “buy and sell in the future,” usually signed at the early stage of the transaction. It includes both parties’ detailed information, the property details, the land title deed number, and the terms of the deposit payment. This contract generally does not itself transfer ownership, but it sets the deadline for transfer, so the buyer can prepare accordingly.
   • The land transfer document (Tor.Dor.13) is the document formally registered by the Land Office once buyer and seller have completed everything agreed, establishing the buyer’s ownership of the land.
2. Legal effect:
   • The sale and purchase contract does not itself have the legal effect of transferring ownership, but it can serve as the basis for legal proceedings or as supporting evidence for a loan application.
   • The land transfer document (Tor.Dor.13) is the formal document confirming ownership of the property, and only takes effect once registered at the Land Office.
3. Purpose:
   • The sale and purchase contract sets out the terms of the transaction and protects both parties’ interests, and can be used in legal proceedings or claims.
   • The land transfer document formally confirms the transfer of ownership once registered at the Land Office.

What Key Details Should Be in the Sale and Purchase Contract?

Sample House Sale and Purchase Contract

Download the sample house sale and purchase contract

1. Date of signing: The date of signing must be stated at the top of the contract, as the date the contract takes legal effect.
2. Information on both parties: Includes both parties’ names, ages, addresses and other details; all information must be accurate, otherwise the contract may be invalid.
3. Property details: Includes the land title deed number, a description of the building, the land’s location, and similar details.
4. Price and payment terms: Must clearly state the purchase price, the deposit amount, the payment method, and the timing for payment of the remaining balance.
5. Contract term and transfer date: Sets out the transfer date agreed by both parties.
6. Transfer costs: Specifies who is responsible for paying the transfer fee, taxes, and other costs.
7. Liability for breach: Sets out how a breach will be handled, such as forfeiture of the deposit or damages.
8. Other clauses: Includes additional terms such as contract cancellation, deposit refund, and property warranties.
9. Signatures and witnesses: The contract must be signed by both parties at the end, and confirmed by a witness.

Recommendations Before Signing the Contract

• Check the current condition of the house or land.
• Verify both parties’ identity information, and confirm the seller is the genuine owner of the land.
• Read the contract terms carefully to make sure everything is accurate.

How to Handle a Breach of Contract

When a breach occurs, whether you are the buyer or the seller, you should take careful, methodical steps to address it. First, carefully review the contract’s breach-of-contract clauses and any related penalties. Next, both parties should try to reach agreement through negotiation, looking for a solution acceptable to both sides. If negotiation fails to reach agreement, the aggrieved party can issue a formal notice of breach.

If the issue remains unresolved after a notice of breach has been issued, the aggrieved party can consider terminating the contract or making a claim under its terms. In this situation, seeking legal advice is very important, especially where the matter is complex or involves a large sum — a professional lawyer should be consulted. It is also worth trying a non-litigation dispute resolution method, such as mediation, before resorting to legal action, as this can be faster and more economical.

Legal action should be a last resort, since litigation is often time-consuming and expensive. Throughout the process, keep all correspondence and related documents as evidence, and carefully assess the legal and financial implications of each step, to make sure the decision reached is the most favorable for both parties.

The Land Sale and Purchase Document (Tor.Dor.13)

The formal name for the house sale and purchase document is the “land transfer document,” a necessary document to ensure the sale of a house and land is legally valid. Once buyer and seller sign and complete the relevant procedures for the “land transfer document” (Tor.Dor.13) at the Land Office, the buyer’s ownership is legally secured.

Once the land transfer document is registered at the Land Office, it serves as the formal proof of the transfer of land ownership. A copy of this document is kept at the Land Office, and the buyer retains a copy. For house and land transactions, this is an important legal procedure that protects both parties’ interests and ensures the transaction proceeds smoothly.

If you have questions about your Thailand property purchase contract, or renting out the property afterward, ask Zagdim.

Have a question about this guide? Leave a comment below, or ask Zagdim directly.