Thailand’s New Notification on Condominium Reservations
The Office of the Consumer Protection Board’s (OCPB) Contract Committee has issued the Notification Prescribing the Business of Selling Condominium Units Through Reservations as a Contract-Controlled Business B.E. 2567 (2024). Published in the Government Gazette on October 3, 2024, the notification will take effect on January 31, 2025, and seeks to prevent developers from exploiting consumers during the reservation process for condominium units.
Scope of the Notification
The notification applies to all cases where a consumer enters into a reservation agreement with a developer and makes a payment to reserve a condominium unit. This reservation can be made through traditional methods or electronic platforms, ensuring consumers are protected regardless of how they interact with developers.
The notification establishes that such agreements are now classified as contract-controlled business, meaning developers must comply with standardized contract forms that guarantee consumer protection. This includes specific contract terms and prohibitions to ensure fairness and transparency.
Key Requirements for Developers
Under the new rules, developers are required to use a standardized reservation contract that includes several consumer protection measures, such as:
- Termination Rights: Consumers can terminate the reservation if the developer fails to meet key conditions, such as obtaining the required construction permits or environmental approvals within the agreed timeframe.
- Refunds: Clear guidelines ensure that consumers are entitled to refunds under specific circumstances, with limitations on the developer’s ability to confiscate reservation payments unless the consumer defaults.
These provisions apply equally to reservations made through electronic channels, where developers are obligated to ensure compliance with electronic transactions laws.
Prohibited Terms in Reservation Contracts
The notification also specifies terms that developers cannot include in reservation agreements, such as:
- Limiting the developer’s liability for breach of contract.
- Allowing the developer to confiscate reservation payments unless the consumer is at fault.
- Charging additional fees for transferring a reservation to another party.
These prohibitions are designed to prevent unfair practices and give consumers more power to hold developers accountable.
Penalties for Non-Compliance
Developers must update their reservation agreements by January 31, 2025, to ensure compliance with the new standards. Failure to do so could result in fines of up to THB 200,000 and potential imprisonment for violations.
Next Steps for Developers
In preparation for the January 31 deadline, developers should review and amend their existing contracts to ensure full compliance with the notification’s requirements. Contracts must be written in Thai and conform to the terms outlined in the Standard Reservation Contract attached to the notification.
Final Thoughts
These changes represent a significant shift in how condominium unit reservations are handled in Thailand. By making these contracts contract-controlled business, the government is providing stronger consumer protections, which developers must now integrate into their operations.
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