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February 22, 2023

Residential Building Renovation Business in Thailand to Be Controlled

The Contract Committee of Thailand’s Consumer Protection Board has issued a new notification relating to home renovation business operations. The Notification of the Contract Committee Re: Services for Providing Renovations of Buildings for Residential Purpose as a Controlled Business in Relation to Details Regarding Payment Receipts B.E. 2566 (2023) (the “Notification”) was published in the Government Gazette on February 13, 2023, and will come into effect after 90 days (i.e., on May 14, 2023).

Once the new Notification is effective, a contractor who provides residential building renovation services will be required to provide a receipt for the payment received from the customer which contains specific details, terms, and conditions as required under the Notification.

Key Definitions

Under the Notification, a “service for providing renovations of buildings for residential purposes” is defined as a business in which a business operator is engaged by a customer to make additions, modifications, alterations, repairs, or improvements to a building (including any house or any structure) which can be used for residential purposes, either in whole or in part.

“Residential purposes” means for residing in the building (in whole, or in any part), whereby the building will not be sold, leased out, hire-purchased, or subject to other arrangements relating to the building with compensation or other benefits involved.

Key Required Content

The Notification requires that the payment receipt be provided by the business operator to the customer immediately upon receiving payment in whole or in part. The receipt must be clearly legible in Thai language, with a minimum font size, and include the following material terms and conditions:

  • Details about the business operator, customer, and service, including contact information, milestones and payments, the daily penalty rate, and other related information.
  • If the business operator is unable to complete the work within the agreed period, or there is any delay, without any fault on the part of the customer, which makes it foreseeable that the work cannot be completed within the agreed period:
    • The customer has the right to terminate the agreement, demand from the business operator any payment which was paid to the business operator in advance for the uncompleted work, and file a claim for damages from the business operator;
    • In the event of a delay where the customer does not exercise its right to terminate the agreement, the business operator would be subject to a daily penalty at the agreed rate, but not less than 0.01% of the contract price, by deducting such amount from the undue contract price. If the customer collects a penalty of up to 10% of the contract price, and views that the business operator is still unable to complete the work, the customer will have the right to terminate the agreement; and
    • If the business operator cannot rectify defects or the quality of the work, the customer will have the right to terminate the agreement and engage others to rectify such defects or perform such work at the business operator’s expense, without prejudicing the customer’s right to file a claim for damages from the business operator.
  • Clearly handwritten full name and signature of the business operator (or its authorized person) and payee.

Prohibited Content

The Notification also prohibits the payment receipt from including any of the following contents, or similar contents:

  • Restrictions or exemptions of liabilities for the business operator, in the case of its willful misconduct or negligence.
  • Allowing the business operator to adjust the work, price, details, or the quality of the materials and tools, without written consent from the customer.
  • Prohibiting the customer from terminating the agreement.
  • Allowing the business operator not to return any amount to the customer, in any case.
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