Real Estate Auction Practice Guidelines

With the growth of online auction systems during the COVID-19 pandemic, where a large number of properties may be offered for sale simultaneously, it is essential to reaffirm professional standards for auctioneers, both in physical auction rooms and online platforms.

PROPERTY AUCTION HOUSE Co., Ltd. (“PAH”) is committed to developing real estate auction systems in compliance with Thai law, business ethics standards, and consumer protection principles, in order to establish the highest level of confidence among sellers, investors, and auction participants.

Professional Standards and Ethics

PAH auctioneers must conduct business with honesty, transparency, fairness, and professionalism.

If a client requests the Company to act in a manner that may contravene Thai law, professional standards, or principles of good governance, the Company has a duty to clarify and refuse such action to mitigate legal risks.

This approach aligns with the principle of good faith under:

• The Civil and Commercial Code of Thailand

• The Consumer Protection Act B.E. 2522 (1979)

Compliance with Applicable Laws

Real estate auctioneers in Thailand must comply with relevant laws, including but not limited to:

1. Civil and Commercial Code (Title on Auction Sales)

2. Consumer Protection Act B.E. 2522 (1979)

3. Price of Goods and Services Act B.E. 2542 (1999) (regarding price display)

4. Anti-Money Laundering Act B.E. 2542 (1999)

5. Personal Data Protection Act B.E. 2562 (2019)

6. Relevant tax laws, including the Revenue Code

1. Disclosure of Personal Interest

If the Company, its directors, employees, or related persons have any interest in the property being auctioned, such interest must be clearly disclosed to prevent conflicts of interest and reduce potential legal liability.

2. Anti-Money Laundering (AML) Compliance

The Company must conduct Know Your Customer (KYC) procedures, verify buyer identity, and maintain transaction records as required by law.

Suspicious transactions must be reported to the Anti-Money Laundering Office (AMLO) when there is reasonable cause for suspicion.

3. Consumer Protection and Advertising

The Company must not engage in misleading advertising practices, including:

• Setting an unrealistically low Guide Price without genuine intent to sell at that level

• Bait advertising

• Incomplete or distorted disclosure of information

Guide Price and Reserve Price

1. Guide Price

The Guide Price is the price published at the commencement of marketing. It may be stated as a single figure or a price range.

It must be determined with consideration of:

• The seller’s minimum expectation

• Appropriate valuation data

• Current market conditions

If the Reserve Price is changed after publication, the information must be updated immediately to avoid misleading communication.

Reserve Price

The Reserve Price is the minimum price below which the auctioneer is not authorized to sell, unless the seller provides written approval.

The Reserve Price should be confirmed prior to the auction date and documented for evidentiary purposes.

Additional Payments

If additional payments are required from the buyer, such as:

• Buyer’s Premium

• Administrative fees

• Contribution toward brokerage or legal costs

They must be clearly disclosed in:

• Property particulars

• Special conditions of sale

• Any addendum issued thereafter

Buyers must be able to calculate the total acquisition cost prior to participating in the auction.

In cases of Conditional Sale, it must be clearly stated whether any deposit will be forfeited or refunded if transfer of ownership cannot be completed, and under what conditions, in order to prevent future disputes.

Announcement of Auction Results

1. If the highest bid does not reach the Reserve Price, the property must be announced as “Unsold.”

2. Misleading statements implying a sale has occurred are prohibited.

3. Published auction results must be accurate and complete.

4. Where VAT applies, it must be clearly stated whether the price is inclusive or exclusive of VAT.

For conditional sales, the property must not be announced as “Sold” until all conditions have been satisfied and ownership transfer has been completed.

Standard Auction Conditions

To ensure industry consistency, PAH should establish “PAH Standard Auction Conditions,” comprising:

1. Auction Conduct Conditions

2. Sale Conditions

3. Memorandum of Sale Form

4. Tenancy and Arrears Schedule (if applicable)

All conditions must undergo legal review and must not conflict with Thai law or consumer rights.

Risk Management and Governance

PAH auctioneers should:

• Conduct regular ethics and legal training for staff

• Establish internal AML and PDPA manuals

• Maintain transparent auction records with audit trail capability

• Review all special conditions amended by the seller’s lawyer prior to publication

Real estate auction is not merely a bidding process; it is a legally regulated transaction subject to consumer protection obligations and business ethics standards.

Adherence to transparency, accuracy of information, and strict compliance with Thai law enhances PAH’s credibility and reduces long-term legal risk.