Thailand is a country that limits land ownership to its citizens. As a general rule, foreigners are prohibited from having any direct interest in real property subject only to a few notable exceptions such as when the Thai Board of Investment determines that foreign ownership is needed to further a promoted industry or project. Another well-known exception is the purchase and ownership of condominium units. As a result, foreign individuals and corporations have both turned to acquiring condominium units as a viable alternative to direct ownership.

In recent years, Thailand has been the venue of an industry wide real property boom. In a recent study, it was determined that the country has experienced a rapid growth in the number of condominium units and facilities due largely to its developing real estate sector. Majority of these newly built condominiums are conveniently located in world famous tourist destinations such as Bangkok, Phuket, Hua Hin and Pattaya. More of these sites are expected to be constructed in the near future as an increasing number of real estate developers look towards the condominium industry as a lucrative and developing trade.

Foreign individuals and companies who desire to purchase a condominium unit in Thailand have to take note of several conditions imposed upon them by Thai law. First, payment of the purchase price is generally required to originate from an off-shore source in the form of Thai currency or Baht. This is significant because it limits the options available to foreigners in procuring financial assistance only to foreign institutions. Also, before any transfer of title over the unit could take place, the presiding official of the Land Office tasked with registering the sale will require the presentation of evidence showing that the purchase price was paid from a foreign source. This fact may be proven by a foreign financing bank through a document called a Foreign Exchange Transaction Certificate or Form which usually requires two (2) days to issue. Without this requirement, no transfer of title will take place.

Moreover, it is also required that any and all foreign exchange transactions occur within the country in order to qualify the purchase as being valid. Foreign residents possessing Permanent Resident Certificates are however exempted from any foreign fund requirements. Last, the Land Office also requires a letter from the seller showing that foreign interest over the total unit floor space does not exceed forty-nine percent (49%) as this is the limit imposed upon foreign ownership in all condominium projects. In the event that foreign interest over the condominium project exceeds this percentage, a lease rather than a sales agreement may be entered into covering the excess. The same goes for companies, the majority shares of which are owned by foreigners. Note that leasehold agreements over condominium units are generally frowned upon since it lacks the security of tenure that direct ownership provides as there is no guarantee that the owner would agree to extend the lease. Also, leasing arrangements are known to cost as much as freehold contracts thereby making them an unattractive form of investment.

The following precautions play an important role in ensuring the successful purchase of a condominium unit:

Inspection of the condominium building, if possible, is strongly advised in order to appraise one’s self of the unit’s physical condition. Defects in the construction and the physical integrity of the tenement may be noticed at the onset thereby averting any future problem. Information regarding the building’s construction and operation budget may also prove to be an important consideration in making one’s choice. The costs spent in raising the building and the amount needed for its upkeep tell how well a condominium operates and how much is needed to keep it functional.

Moreover, an exhaustive investigation into the title of the land and building may prove to be a very useful tool in ensuring that no fraudulent scheme is taking place. It provides the buyer relief from any future complications and guarantees him or her undisturbed and peaceful occupation.

Additionally, it is encouraged that one must be knowledgeable of the persons he or she may live with. Factors such as a diminished expectation of privacy and participation in the homeowner’s association dictate a more active social lifestyle. In these situations, it helps if most if not all of the co-owners share the same social background in order to lessen or completely avoid any potential conflict. A simple background check may yield positive results and provide key information about the persons you intend to share your home with.

A condominium operates following a set of rules that govern the use of enjoyment of its common property. These stipulations are usually found in documents commonly designated as its “Rules and Regulations”. The unavailability or scarcity of English translations of these rules and the severity with which they are enforced may also affect one’s decision in choosing the right condominium. It is recommended that one peruse the conditions and restrictions found in any condominium Rules and Regulations.

Another important factor to consider is a condominium’s monthly maintenance and sinking fund fees. These amounts are usually measured according to the amount of space occupied by the unit owned and are expressed in terms of amount per square meter. Most condominium contracts stipulate these amounts openly for the buyer’s consideration and are included in the condominium’s rules and regulations. In any event, it is strongly advised that any buyer take his or her financial condition into account.

The most important consideration in purchasing a condominium unit is the juridical entity tasked with its management otherwise known as the Condominium Juristic Person. It is a legal entity vested with the obligation to maintain the condominium in a tenantable state. Care should be taken in choosing a reputable and trustworthy company. It is considered a legal right and a good practice for any purchaser to ask for an updated account of the Juristic Person.

In any event, what determines a successful condominium unit acquisition possible occurs even before the purchase agreement is drafted and signed. The amount of work and labour put into this stage eventually pays off making condominium life both an ease and a joy.