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Running the real estate gauntlet: The ‘Dos and Don’ts of real estate’ in Thailand

As a general matter, real estate in Thailand can be an excellent investment. Unfortunately, however, horror stories are not rare enough. But if you adhere to our “nine points”, such tragedy can be avoided. Here are the first two:

Jerrold Kippen

Saturday 24 September 2016, 10:00AM

As development on Phuket continues to grow, avoiding the legal pifalls in purchasing a property have become increasingly important, especially for first-time buyers.
As development on Phuket continues to grow, avoiding the legal pifalls in purchasing a property have become increasingly important, especially for first-time buyers.

Beware of real estate agents

“Real estate agents”, “estate agents”, or (as they are more properly referred to under Thai law) “brokers” are middlemen who make their living by being paid a commission for putting a buyer and seller together. Only when the deal completes, the agent gets paid. Thus, agents have a financial interest in every deal completing.

That is why agents are commonly regulated in developed countries such as those in the Europe, the US and Singapore. Such regulation generally imposes a “fiduciary” duty on the agent to act in the best interests of their clients with significant penalties applicable if they do not. This makes sense since such agents (like lawyers and accountants) hold your finances in their hands during a deal and they should not be allowed to knowingly guide you into making an unwise investment for the sake of their commission.

In Thailand, however, agents are not regulated. We have first-hand experience of far too many agents putting their commission above the interest of the buyer. We should emphasise that we are not saying not to use an agent, but rather that you should be aware that it might be the case that your interests might not be the top priority of your agent.

Therefore, if you intend to use and agent and you start to feel uncomfortable with too many statements that do not make sense – such as “this is how it’s done in Thailand” and “it is standard that the agent holds the deposit on the sale” – trust your instincts and walk away, or at the very least get other competent independent/non-interested advice.

Get competent legal counsel

One of the best protections you can find when investing in real estate in Thailand is competent legal counsel. This should be obtained rather sooner than later – but certainly before you sign any agreement with an agent or seller.

However, “competent” is the key. We are often amazed by what people say they were told by law firms in Thailand. Thailand actually does have a well developed set of laws, most mirroring Western law. Thai law for the most part fits together logically, just like in most fully developed countries. Further, almost all the relevant Thai law is available in its English translation. Thus, if what you hear from a law firm in Thailand about Thai law sounds like it does not make any sense, if it sounds illogical, there is a good chance you are right.

In such case, ask them to show you the law in question to read it yourself. If they are unable to explain their point then with the text in front of you both, or if they refuse to do so, you are well advised to find another law firm that will.


Furthermore, “competent” counsel doesn’t just know the law – competent counsel is also ethical. By ethical we mean compliance with internationally recognised standards for lawyers.

Thus, you should expect that your law firm has a fiduciary duty to you, in other words, that they will put your interests first, even above theirs, including their financial interests. In this regard, you should expect that your law firm does not and will never have any conflict of interest in representing you. They should not have any interest (including any of their own) the advancement of which would be detrimental to yours.

For example, your law firm should never accept commissions from others, like real estate agents or developers, to refer you to them.

Nor should the law firm represent both you and the other side in a transaction. There is no such a thing as a “non-conflicted transaction”. Every contract is a give and take and your lawyer should be looking out solely for your interest.

An initial evaluation is easy enough. Ask your prospective counsel to show you their formal legal credentials. Then ask them what code of professional legal ethics they are bound by and to show them to you. If they do, verify those credentials and review their professional code. If they cannot, or if you find their response unsatisfactory – for instance, “I have lived in Thailand a long time, I speak Thai, and I know many government workers” – you should find other counsel.

Finally, do not assume you are going to get the easy or correct legal advice from Thai government officials. They are very often wrong even about the law they are charged with administering.

Stay tuned for more on the “Dos and don’ts of real estate in Thailand” in our next article in this series.

DUENSING KIPPEN is an international law firm specialising in business transaction and dispute resolution matters, with offices in Bangkok and Phuket, Thailand and affiliated offices in 45 other countries. Visit them at:




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