You are using an outdated browser and your browsing experience will not be optimal. Please update to the latest version of Microsoft Edge, Google Chrome or Mozilla Firefox. Install Microsoft Edge

May 31, 2013

Buying a House in a Land Development Project: Look Before You Leap

Subscribe to Updates
Bangkok Post, Corporate Counsellor Column

Recently, consumer interest in purchasing residential homes in Thailand has skyrocketed. In response to this, developers have launched numerous residential development projects catering to both domestic and foreign purchasers. Consumers now have the opportunity to contemplate purchasing homes of varying quality while also factoring in developer reputation and risk. When thinking about buying a home in a land development project, there are a few major issues buyers should consider both before and after making the purchase.

Is the project protected under Thailand’s Land Development Act?

Under Section 4 of the Land Development Act of 2000, “land development” means the sale of land divided into sub-lots from one main lot of land or from several lots of adjoining land in return for property or benefit as remuneration if at least 10 sub-lots are sold. This includes projects where the land is divided into fewer than 10 sub-lots but subsequent divisions are made within three years, resulting in the combined land being at least 10 lots.

Buyers should note that a developer might seek to avoid compliance with the Act by dividing the land into less than 10 sub-lots, so that the project may not have to provide public facilities or services, such as roads, parks, or children’s playgrounds.

Is the project being completed as described in the contract or as in the developer’s advertising materials?

Advertisements purporting to provide services or public facilities are regarded as contractual obligations between the buyer and the developer (Section 11 of the Consumer Case Procedure Act of 2008). Therefore, the land developer must fulfill promises made in the house sale advertisements, as they are contractual terms.

Furthermore, the land developer must request a bank or financial institution to conclude a guarantee with the Land Development Commission. If the land developer fails to provide for public facilities or services, the bank or financial institution will pay the commission the amount specified in the guarantee, so the commission can spend it on the provision of those public facilities or services (Section 24 of the Land Development Act).

How will the public facilities or services be maintained both during and after purchase?

Sometimes, after developing a project, a land developer fails to maintain public facilities or services in good working condition. Thai law provides that buyers of at least half the sub-lots under a project can pass a resolution to establish a developed-estate juristic entity, which is registered with the land official and controlled by an executive committee and the buyers. The management of public facilities or services can then be transferred to this developed-estate juristic entity (Sections 44 and 45 of the Land Development Act) to ensure they are maintained effectively.

Will there be any issues related to the collection of common fees?

Once the developed-estate juristic entity is established, all buyers of the developed land become members. If there are any sub-lots that have not yet been sold or which are transferred back to the land developer, the land developer becomes a member of the developed-estate juristic entity (Section 47 the Land Development Act).

Buyers of developed land are liable to pay common fees for the management and maintenance of public facilities or services, and land developers are liable to pay common fees for sub-lots that have not been sold (Section 49 of the Land Development Act).

To enforce contractual obligations in case of default, the developed-estate juristic entity can file a civil claim against a buyer or land developer who fails to pay the common fees.

What will happen if there are manufacturing defects?

If defects are found before the transfer of ownership, the buyer should submit a written objection (preferably acknowledged by the developer or its representative’s signature) outlining the list of defects (with photos) and requesting the land developer to repair the defects within the prescribed contractual period. If the land developer fails to repair the defects or does so inadequately, then on or before the transfer date, the buyer should present objections and supporting evidence of those defects to the land officer, informing the officer that the transfer cannot proceed unless and until the defects have been fixed.

If the defects are discovered after ownership transfer, the land developer is likely contractually liable. Exceptions include: (1) if the buyer knew or would have known of the defects at the time of sale; (2) if the defects appear at the time of delivery and the buyer accepts the house without objection; and (3) if the house was sold by public auction. The law allows buyers to take action concerning liability for defects within one year from the date the defects are discovered (Sections 472, 473, and 474 of the Civil and Commercial Code).

What are the key steps before making a purchase?

Before buying a house in a land development project, buyers should study the project and the environment to determine whether the government has any plan to use the land or adjacent land or if the land could be subject to expropriation, such as for future transport projects.

Buyers should review the corporate land developer by considering its previous projects and its corporate and financial status. Buyers can also conduct due diligence on the developer’s authorized directors to determine whether they have the authority to sign the sale and purchase contract. This may include investigating whether the developer or its directors have been involved in previous consumer claims.

Finally, buyers should examine the land and the relevant title deeds and prior title rights to confirm whether the developer owns the land or has the right to use it with no risk of encumbrance.

Download Full Article
Related Professionals

Practices

Dispute Resolution and Litigation

Real Estate

Location

RELATED INSIGHTS​ 

August 11, 2026
Cambodia’s Ministry of Justice has launched a new platform on its official website to publish notices of forced sales issued by each municipal and provincial court of first instance. The platform’s stated purpose is to inform the public and facilitate greater participation in forced-sale auctions conducted in connection with court-ordered enforcement proceedings. How the Platform Works The platform publishes forced-sale notices from courts of first instance across Cambodia’s municipalities and provinces and includes a link where the public can view properties currently subject to forced sale. To participate in a forced-sale auction, individuals can download Khmer-language bidding application forms through links provided on the platform. The form typically requires the applicant’s name, sex, year of birth, identity card number and issue date, and address, together with details identifying the immovable property (including its ownership certificate number), the relevant enforcement case number and date, and the reference to the public auction or tender announcement issued by the court. Completed application forms must be submitted directly to the specific municipal or provincial court that issued the forced sale. For further inquiries about a particular forced sale, interested parties should likewise contact the relevant municipal or provincial court. Forced Sale of Immovable Property in Cambodia The publication of these notices relates to the forced sale procedure for immovable property under Cambodia’s Code of Civil Procedure (CPC). Unlike property seizure by a court, a forced sale is a compulsory execution proceeding—a subsequent enforcement step that arises only after an underlying dispute has been adjudicated and a debtor fails to pay the debt or outstanding amount due under a final and binding judgment or other enforceable title of execution. For the purposes of this procedure, the term “immovable property” under the CPC refers to land, registered buildings, jointly held shares of such property, registered
Read More
August 6, 2026
Every month, VAT-registered businesses in Thailand calculate their output and input VAT and file a return to pay the net amount due or claim a refund. Yet a common and costly dispute arises when a business that has paid input VAT to its supplier—and done everything asked of it—later finds that input VAT rejected on the grounds that the tax invoice was issued by “a person not entitled to issue tax invoices.” In these cases, a buyer may have confirmed the supplier’s VAT registration on the Revenue Department’s website, paid through the banking system, received a complete tax invoice, and kept full payment and inventory records. Even so, if the Revenue Department later determines that the supplier did not genuinely make the sale or collected the VAT without remitting it, the department can disallow the input VAT and assess additional tax, surcharge, and penalty—often more than a year after the transaction. A new article from tax and dispute resolution specialists at Tilleke & Gibbins in Bangkok examines how the Revenue Department and the courts approach these disputes, including two recent Supreme Court (Tax Division) decisions confirming that the taxpayer bears the burden of proving a supplier genuinely sold and delivered the goods and received payment. It considers why the VAT registration system offers no legal safe harbor, why the evidentiary burden falls hardest on online and cross-border transactions where buyers and sellers never meet, and how the Revenue Department’s own digital infrastructure could detect non-remitting suppliers at the source rather than shifting the loss to good-faith buyers. The article also sets out practical guidance: how to build a comprehensive “know-your-supplier” file at the time of a transaction, the procedural steps and strict deadlines for challenging a VAT assessment, and why dispute readiness belongs alongside tax planning at the center
Read More
July 3, 2026
Thailand will keep its reduced government fees for property sale and mortgage registration in place for another year. Two Ministry of Interior notifications, issued following a cabinet resolution on June 30, 2026, and published in the Government Gazette on July 1, 2026, extend the previously reduced fee levels through June 30, 2027. The reduced registration fees apply to the sale and mortgage of the same property types covered in prior versions of the scheme: detached houses, semidetached houses, row houses, commercial buildings, land transferred together with such buildings, and condominium units. To be eligible for the reduced fees, the purchase price, the officially assessed value, and the mortgage amount must each not exceed THB 7 million, and the buyer must be a Thai individual. The reduced registration fees for eligible sales and mortgages are calculated as follows: Sale: 0.01% of the official assessed value (reduced from standard rate of 2%) Mortgage: 0.01% of the mortgage amount (reduced from standard rate of 1%) The reduced mortgage registration fee applies only if the mortgage is registered at the same time as the sale of the property.
Read More
June 29, 2026
Thailand’s cabinet has approved the draft Act on Liability for Defective Goods, commonly called Thailand’s “Lemon Law.” The Draft Act is currently pending consideration by Parliament. The draft law aims to strengthen buyers’ position in pursuing cases against sellers. While the Civil and Commercial Code offers provisions governing liability for defective goods, it is difficult in practice for buyers to successfully make a claim against sellers, particularly where defects are latent and not discoverable at the time of sale or delivery. By introducing product-specific rules and clearer remedies, the new law is intended to modernize Thailand’s consumer protection framework and align it more closely with international standards, and to help relieve the buyer’s burden of proof against the seller in product liability cases. If enacted, the draft act will take effect 180 days after publication in the Government Gazette, giving businesses a transition period to assess their compliance obligations. This article provides an overview of the key provisions of the draft act and highlights some practical considerations for businesses operating in Thailand. Scope and Key Definitions The draft act applies to sellers—defined as persons who sell goods in the ordinary course of business—and protects buyers, a term defined broadly to include not just the original purchaser but also transferees and successors in title. This expands the class of people who can bring claims. The law does not apply to used goods, live animals, or goods exempted by future ministerial regulation. It also leaves intact any separate warranties, promises, advertisements, or other guarantees a seller has given; those remain enforceable alongside the new statutory rights. General Liability for Defective Goods Sellers are liable for defects that exist at the time of delivery, regardless of whether the seller knew about them. Liability arises where a defect reduces: The benefit intended under
Read More