Buying residential real estate in Thailand is not just about choosing a property, hiring an expert, negotiating the agreement and getting the deal done. If you intend to purchase property in the country, you need to learn the importance of supplemental contracts while buying real estate in Thailand. It will make things easier for you.
What are Supplemental Contracts?
When you want to buy property in Thailand with the help of the real experts, you must understand that foreigners are not allowed to own land in Thailand. You need to get the property as a lease agreement that is extendable easily. The lease agreement also includes service and maintenance agreements.
What does the Law say?
The lease or tenancy laws in Thailand say that a leasehold is under Thai law is a tenancy or rental contract which can be terminated before its term completes if you fail to comply with the contract structure. As lease agreement also includes maintenance and service agreements, if you fail to comply with them, you might lose the lease agreement too. If a tenant doesn’t abide by the contracts, it can lead to the eviction of the tenant as well.
Calculation of Management and Maintenance Fees
Maintenance and management fees are decided by the developer at his or her discretion. Some developers can even demand an annual maintenance fee of $7000. As the maintenance contracts cannot be terminated with ease, this could put a financial burden on the lessee.
Leasehold Projects Complaints
The annual management fee and maintenance fee, as well as poor services, are some of the complaints associated with leasehold projects. Some people assume that in the case of poor performance, the annual fee could be withheld. This is not the case because it might be considered as a breach of the lease and may give the owner the right to take legal action against the lessee. Though this may seem unfair, it is the truth. So, you would be smart to double check all the contracts before you give the green light to a leasehold arrangement. You should also know that the property laws in Thailand are considered pro-landlord and there is nothing substantial when it comes to real tenant protection laws.
Seeking a Democratic System is Smart
There are many developers of leasehold property in Thailand who have set up a more democratic system when it comes to the management of the project. They allow the residents to have some control and the model is similar to how a condominium is run. If you are a foreigner, you should seek such developers. Also, remember that finding such developers would be a tough job as most developers want to control everything from the costs to the terms and conditions.
Hire the Experts
As supplemental contracts can be a costly trap, you would be smart to seek the services of a legal expert who guides you on everything from the benefits of Thai property investment visa to how to make the supplemental contracts more democratic.