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May 29, 2015

Completing Your Construction Project in Thailand

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Bangkok Post, Corporate Counsellor Column

Before you embark on designing and building your dream home—or business—in Thailand, pause for a moment.  As exciting and full of potential as your project may be, the process of completing a construction project involves many rules and regulations, as well as reliance on contractors. Therefore, before committing yourself, you should know what you are getting yourself into and plan accordingly.

First, consider the nature of your construction project. Thailand has environmental and land-use restrictions that may impact possible locations for your project. Land-use and environmental restrictions are governed by the Town and City Planning Act B.E. 2518 (1975), by amendments to this act, and by ministerial regulations arising out of it.

The restrictions under the Town and City Planning Act differ from town to town and city to city. Their purpose is to formulate, execute, and enforce comprehensive city plans that promote sanitation, convenience, orderliness, attractiveness, utilization of property, public safety, economic development, social and cultural development and preservation, and so on. Land-use regulations in Thailand usually come in the form of Euclidean zoning plans that limit the uses of land in particular zones. The possible zones in Thailand include:

  • low-population residential zones;
  • medium-population residential zones;
  • commercial and high-population residential zones;
  • industrial and warehouse zones;
  • special industrial zones;
  • rural and agricultural areas;
  • recreational and environmental preservation areas;
  • national park areas;
  • educational institution areas;
  • Thai culture promotion areas;
  • religious institution areas;
  • government office and public utilities areas; and
  • communication and transportation areas.

On top of land-use regulations, there are often overlapping, location-specific environmental regulations. These regulations usually include height restrictions for buildings and restrictions on the percentage of land that can be developed.

Second, consider the design of your project. Thailand has standards for the design of building projects. These standards are outlined in the Building Control Act B.E. 2522 (1979), in amendments to this act, and in ministerial regulations issued under it. They can include standards relating to restrictions on the size, shape, and height of buildings; regulations regarding the number and design of bathrooms and toilets; and regulations prescribing the aesthetic features of buildings. Restrictions can vary based on Province, so it is important to contact the Land Department Office local to where you want to build to obtain detailed information on the restrictions.

Third, consider the construction of your project. Thailand’s construction, renovation, and alteration standards can be found in the Building Control Act B.E. 2522 (1979), in amendments to this act, and in ministerial regulations issued under it. Construction standards include quality and durability regulations regarding construction materials; regulations governing electrical, water, and gas systems; fire safety standards; requirements regarding the distance between buildings and the road or public land; safety standards in regard to construction; and so on.

Fourth, compile a reference list of permits, reports, and inspections that will be necessary for the completion of your project. A permit is required for most construction projects in Thailand. There are different types of permits, reporting requirements, and inspection requirements for construction projects, depending on their location and scope. For example, different permits and procedures are required for construction, alteration, demolition, removal, and change-of-use. Permits for construction projects can be obtained at the Land Department Office.

In order to be issued a building permit, you must already have—among other things—relevant infrastructure permits (such as water and electricity permits), relevant land development permits, and completed architectural plans. The exact list of permits, reporting requirements, and inspection requirements that will be relevant to the completion of your project will depend on the specifics of your project.

Fifth, remember that trust is good but control is better. Consider carefully who to engage in the design and construction of your project, and under which terms. Contract work is governed in Thailand by the Title pertaining to Hire of Work in the Civil and Commercial Code (Sections 587 to 607), but you will want to create a written contract between you and your contractors to ensure that expectations are clear. This will help you avoid problems down the road. A good contract should include, for example:

  • the goals and parameters of the contracted-for job, including a copy of the construction plans;
  • the price mechanism for determining the cost of the job;
  • the terms and method of payments;
  • the completion date;
  • liquidated damages for delays or breach;
  • who will provide materials and equipment;
  • quality specifications;
  • at what time the title to materials and equipment provided by the contractor passes to you;
  • insurance requirements for the project;
  • post-construction liability; and
  • mechanisms for dispute resolution.

These considerations should not stop you from pursuing your construction project in Thailand, but they should be born in mind. Otherwise, you may be opening yourself up to heavy fines, a prison sentence, the demolition of your construction project, and lawsuits.

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