Condo Purchase and Sale Agreement and 10 Important Details That Must Be Included in the Contract

This article will focus on the condo format, which is one step in buying and selling a condo or a condominium. When the buyer has agreed to buy a condo, they will notify the owner of that condo of their intention to buy that condo.

However, just giving verbal notice does not create a legally binding effect to the point where both parties must keep a promise not to sell that condo to anyone else or to buy that condo within the specified time frame. Therefore, a sales contract must be made to be legally enforceable.

Let’s get to know the condo sales contract and at the end, we have a sample condo sales contract for you to download.

What is a condo purchase and sale agreement and what is its purpose?

A sales contract is a contract made to create a legal relationship between a condo buyer and a condo seller to express the intention of the buyer that he wants to buy the condo of the seller.

With a deposit as a guarantee that a sales contract will be made between them and the transfer of ownership will occur within the specified period. At the same time, it expresses the intention of the seller not to sell the condo to anyone other than the buyer during the period specified in the contract.

What are the consequences if there is a breach of the purchase and sale contract?

If after the said period, there is no transfer of ownership because the buyer changes his mind and does not want to buy, the buyer is considered to be in breach of contract and the seller can confiscate the deposit. The seller is obliged not to sell the property to any other buyers during the said period.

If the seller breaches the contract, the buyer can not only claim the deposit back but can also sue to sell the property to him, including other rights to claim damages.

However, if the sale is made according to the sale and purchase agreement, the deposit must be deducted from the sale price. The buyer will only pay the remaining amount after deducting the deposit.

How much deposit should you put down when buying real estate?

In the case of second-hand properties, the deposit is generally between 10,000-20,000 baht, or sometimes 5-10% of the selling price. However, if it is a new property, the deposit here is the reservation fee, which may be only 1-5%, depending on the conditions of each project.

However, the amount of the deposit will depend mainly on the agreement between the buyer and seller.

How long should the period be?

Generally, a period is set for the parties to sign a sales contract, transfer ownership, and pay the remaining amount from the deposit within 1-3 months from the date of the sales contract, which is more than enough time for the buyer to contact a financial institution to arrange for various loans.

Components of a purchase and sale contract

The contract to buy and sell a condo will consist of 10 parts:

Part 1 Contract Details

This section appears as the first part of the contract to record the date and place of execution of the contract. If no effective date is specified, the contract is deemed effective from the date entered into, which is the date shown in Section 1.

Part 2 Details of the Contracting Parties

The parties to a contract of sale in the case of a direct sale will consist of two parties, one party being the buyer and the other party being the seller. This section will specify information identifying both parties to the contract, such as their full names, ages, and addresses.

The details shown on the national ID card will be used. A copy of the national ID card will be used as an appended document to the sales contract.

Part 3 Real Estate Details

This section shows details of the property to be bought or sold. For condominiums, details of the condominium include the project name, name of the building where the condominium is located, the floor where the condominium is located, condominium number, room area, height, length, and width of the condominium, along with attached floor plan showing the location on the building and interior plan of the condominium.

In addition, the details of the building where the condominium is located must be specified, including the land title number, land number, sub-district, district, and province where the land is located. Almost all of the details will already appear on the condominium title deed (A.C. 2).

Part 4 Selling price and payment details

This section will state how much both parties agree to buy and sell the condominium. The amount is stated in both numbers and letters. It also clearly states how much of the purchase price is set aside as a deposit.

The payment method is by cash or if paying by bank check, specify the bank, branch, check number, date, and amount paid and specify the remaining amount to be paid on the day of the sales contract or transfer of ownership.

Part 5 Details of the transfer of ownership registration

The gist of this section is to specify the date on which the contract of sale and registration of transfer of ownership will take place. This can be a fixed date or a number of days from the date on which the contract of sale and purchase is made.

However, there must be a specific date set for when the sales contract will be made, which is an essential part of the sales contract.

In addition, it will clearly state which land office the sales contract should be made at. It also mentions the expenses in real estate trading, such as transfer fees, stamp duties, specific business taxes, brokerage fees, withholding taxes, and income tax.

It must be clearly defined that the buyer will be responsible for what and how much, and the seller will be responsible for what and how much. This must be clearly defined and cover all expenses.

So that when the day comes to make a sales contract, there will be no need to make any further agreements, which risks not being able to agree later.

Part 6 Details of condominium delivery

This section will specify when the seller will deliver the condo to the buyer after the transfer of ownership is registered and when the buyer will be allowed to inspect the condo before the transfer of ownership is registered.

If the inspection finds that it is correct and in accordance with the details specified in the contract, the transfer of ownership will proceed.

Part 7 Transfer of Rights and Seller’s Representation

In some cases, there will be a requirement from the seller regarding the transfer of the buyer’s rights to another person. The seller can specify in the sales contract that the buyer cannot transfer the rights to another person unless he receives written consent from the seller.

In addition, some also specify that if the buyer wants to transfer the rights to another person, the fee for transferring the rights to the seller must be paid at a rate of how many baht per time, and the person receiving the transfer of rights must also be under the terms of this contract.

The seller’s guarantee is a request from the buyer for the seller to guarantee that the condominium to be purchased and sold is free from any encumbrances, including forcing the seller not to use the condominium to create any additional encumbrances since the contract of purchase and sale was made.

Part 8 Breach of Contract and Termination of Contract

This section will discuss the enforcement of the sales contract and what the effects will be on the contracting parties if one party breaches the contract. Breach of contract will be divided into 2 cases.

• Case 1 is a breach of contract by the buyer. If the buyer breaches the contract by not registering the transfer of ownership and paying the remaining amount, in this case, the contract allows the seller to forfeit the entire deposit that was placed when making the sales contract.
• Case 2 is where the seller breaches the contract by not registering the transfer of ownership of the condominium to the buyer. The contract gives the buyer the right to sue and force the seller to comply with the contract, including the right to claim various damages.

Part 9 Other Terms and Conditions

An additional agreement agreed upon in advance by the parties to a contract as a solution in case of problems, such as in the event of late payment or refund, in which the parties have the right to charge interest to each other, specifying the interest rate to be used in the calculation and specifying that interest will start from the date of default.

If the postponement or extension of time affects the rights of each party, how does it affect the rights of each party? And if there is any demand or delivery of any documents, where should they be sent? Mostly, it is specified to be sent by registered mail to the address specified in the first part of the contract, and the recipient of the document is considered to be aware when the letter has been signed, etc.

Part 10 Signature of the parties and witnesses

After the contracting parties have acknowledged and fully understood the content of the contract, this is an important part that creates a legal relationship by expressing the intention for the contract to be enforceable between the contracting parties.

By signing the buyer and seller in the contract, with one witness from each party signing to acknowledge it, the contract of sale will be made in two copies with the same correct content, one copy will be given to each party to keep.

Summary of details of the contract to purchase and sell a condominium

A sample condominium purchase and sale agreement that you can use as a guideline when creating your purchase and sale agreement. Click here to download the condominium purchase and sale contract.