Property Contracts Every Buyer and Seller Must Understand

Know Before You Pay, Reduce Risk Before Ownership Transfer

Buying or selling a house or real estate in Thailand is not simply about agreeing on a price and transferring ownership at the Land Office. In reality, there are three key types of contracts that directly affect the rights, obligations, and legal risks of both buyers and sellers.

Many buyers lose their legal advantage not because of price, but because they do not fully understand the contract they sign.

This article clearly explains Reservation Agreements, Agreements to Sell and Purchase, and Sale and Purchase Agreements, rewritten as a professional legal knowledge article suitable for websites and SEO purposes.

Important Note
Once ownership transfer at the Land Office is completed, the officer will hand over the land title deed together with Tor Dor 13 (TD.13) to the buyer. Ownership is then legally complete.

1) Reservation Agreement

A Reservation Agreement is a relatively new form of contract developed by real estate developers and sellers to replace the traditional Agreement to Sell and Purchase in certain situations. This practice is often used to bypass legal limitations, resulting in most risks being borne by the buyer.

How It Is Used in Practice

• The buyer pays a reservation fee and receives a receipt

• The contract often requires installment down payments

• It states that once the seller obtains construction approval or project approval, the buyer must enter into an Agreement to Sell and Purchase

Risks Buyers Must Be Aware Of

• If the seller fails to obtain construction approval or cannot proceed with the project

• The buyer cannot legally force ownership transfer

• The buyer can only request a refund of payments made (often without interest)

• This is because the contract does not clearly bind the seller to transfer ownership

2) Agreement to Sell and Purchase

An Agreement to Sell and Purchase offers stronger legal protection and is much easier to enforce under Thai law. While the law does not strictly require it to be in written form, in practice it should always be in writing.

Key Legal Principles

• If a deposit or partial payment has been made, the buyer may still sue even without a written contract

• If the transfer date arrives and the seller refuses to transfer ownership, the buyer may file a lawsuit to enforce transfer

Rights and Obligations

• Buyer: must pay according to the agreement

• Seller: must transfer ownership on the agreed date

Breach of Contract

• Buyer breaches → Seller may terminate the contract and forfeit the deposit or down payment

• Seller breaches → Buyer may choose to

  • Enforce ownership transfer through court, or

  • Terminate the contract and demand a refund with 7.5% annual interest, calculated from each payment date

3) Sale and Purchase Agreement

A Sale and Purchase Agreement for real estate must be made in writing and registered with the Land Office to be legally valid and to immediately transfer ownership.

Critical Legal Warning

• If a sale occurs without Land Office registration

• The contract is legally void

• It has no binding effect on either party

• Any money paid must be fully refunded

In practice, Sale and Purchase Agreements are typically executed using the standard Land Department form and signed on the actual transfer date.

Key Observations

• Reservation Agreement
  Serves only as a starting point and does not bind the seller. If the project fails, the buyer generally receives only a refund without interest.

• Agreement to Sell and Purchase
  Legally enforceable and allows ownership transfer to be compelled by court order.

• Sale and Purchase Agreement
  Must be registered with the Land Office. Without registration, no ownership transfer occurs.

Supporting Documents (Basic Requirements)

• Copy of buyer’s identification card

• Copy of buyer’s house registration

FAQ – Frequently Asked Questions

Q1: How is a reservation agreement different from an agreement to sell and purchase?
A: A reservation agreement does not legally bind the seller to transfer ownership. If the project fails, the buyer may only request a refund. An agreement to sell and purchase is legally enforceable.

Q2: Can a buyer sue if the seller refuses to transfer ownership?
A: Yes, if there is an agreement to sell and purchase and a deposit or payment has been made.

Q3: Must a sale and purchase agreement be registered?
A: Yes. Without registration at the Land Office, the contract is void.

Q4: What happens if the buyer breaches the agreement to sell and purchase?
A: The seller may terminate the contract and forfeit the deposit or down payment.

Q5: What documents does the buyer receive after ownership transfer?
A: The land title deed and Tor Dor 13 (TD.13) issued by the Land Office.