What triggers each milestone payment?
The single most important distinction in an off-plan contract is whether payments are triggered by construction progress or by calendar dates. Everything else follows from it.
A progress-linked schedule ties each tranche to a verifiable physical stage: foundations complete, structure topped out, external walls closed, mechanical and electrical installed, unit handed over. If the building slows, your payments slow with it, and your exposure stays roughly proportional to what has actually been built. That is the schedule you want.
A date-linked schedule requires payment on fixed dates regardless of what is standing on the site. If construction stalls, you keep paying into a project that is not progressing, and by the time the problem is undeniable you may have 60% of the price committed to a hole in the ground.
| Typical milestone | What should evidence it |
|---|---|
| Reservation | Unit held, written terms, refund conditions stated |
| Contract signing, 20-30% | Sale and purchase agreement executed, title and quota confirmed |
| Foundation complete | Engineer or architect certificate, dated site photographs |
| Structure complete | Certificate confirming the frame to the relevant floor |
| Walls and roof closed | Certificate plus your own inspection or your lawyer’s |
| MEP and finishes | Certificate, unit visible and identifiable |
| Transfer, 20-30% | Snagging complete, quota confirmed again, registration ready |
Insist that the certifying party is independent of the developer, or at minimum that you have the right to inspect before paying. A milestone certified only by the company being paid is not a control.
Full Phuket off-plan context: Off-Plan Property Phuket Guide. Due diligence workflow: Due Diligence Thailand Step by Step.
What delay penalties should a strong SPA include?
| Purchase price | 0.02%/day | Per month (~30d) |
|---|---|---|
| $250,000 | $50/day | ~$1,500 |
| $300,000 | $60/day | ~$1,800 |
| $400,000 | $80/day | ~$2,400 |
Penalties are not optional philosophy, they are cash. If your SPA has penalties for buyer default, check whether developer delays carry equivalent buyer protections (rental compensation, exit right, or fee abatement).
What happens if the buyer misses a payment?
| Default stage | Typical contract response |
|---|---|
| 1-14 days late | Reminder + possible late fee |
| 15-30 days | Formal notice |
| Beyond grace | Termination risk, deposit at risk |
Red flag: SPA silent on grace period but aggressive on developer termination rights for buyer default.
Can you assign the contract before completion?
| Item | Typical range | Planning note |
|---|---|---|
| Assignment fee | 2-5% | May still beat resale closing costs |
| Developer consent | Required | Not guaranteed |
| Timing | Pre-completion only | Verify eligibility |
Treat assignment as optionality, not a guarantee, you still need a willing buyer and developer approval.
What should a lawyer-led protection checklist include?
Engage independent counsel, not the developer’s in-house lawyer and not a firm the sales office recommends without alternatives. These are the clauses your lawyer should be reading for, in the contract itself rather than in the brochure:
- Payment triggers tied to certified construction stages, with the certifying party named.
- A long-stop date, being the date after which you may terminate and recover funds, distinct from the estimated completion date.
- Delay penalties that accrue automatically, at a rate that means something, without you having to prove loss.
- A specification schedule annexed to the contract, naming products and grades. “Premium finishes” is not enforceable.
- Foreign quota protection, stating what happens if the quota is unavailable at registration after years of payments.
- The refund mechanism, including who holds the money, how long repayment takes, and whether interest accrues.
- Assignment rights, so you can sell the contract before completion if your circumstances change.
- Restrictions on the developer changing the design, the common areas or the unit layout without your consent.
- The identity of the contracting entity, and whether it holds the land or merely develops on it.
- Which law governs and where disputes are heard, which matters more than buyers expect.
Cost context: Hidden Costs Buying Property Thailand.
What refund and termination clauses actually say?
Read these before signing rather than when you need them, because by then they are the only thing that matters and they will not have improved.
When the buyer defaults. Most Thai off-plan contracts allow the developer to terminate and forfeit sums already paid if you miss a payment beyond a grace period, which is commonly 15 to 30 days. Some forfeit everything; some forfeit a defined percentage and return the balance. The difference is enormous and it is one clause.
When the developer is late. Contracts frequently give the developer far more latitude than they give you: a long grace period, generous force majeure, and a penalty small enough to be cheaper than accelerating the build. Look for whether the penalty accrues automatically or requires you to demonstrate loss, and whether there is a point at which you may simply terminate and recover.
When the buyer wants out. Ordinary change of mind almost never triggers a refund. Your realistic route is assignment, selling the contract to another buyer, which is why the assignment clause matters so much. Check whether the developer must consent, whether they charge a fee, and whether they can refuse without reason.
What “refundable deposit” usually means. Frequently it means refundable only during a short window before the sale and purchase agreement is signed, and only if the developer fails specified conditions. Get the conditions in writing, at reservation, before the money moves.
Ask your lawyer one blunt question about the whole set: if this developer stopped work tomorrow, what exactly would I be entitled to, and how long would it take? If the answer is uncomfortable, that is the risk you are being asked to accept, and the payment schedule is your main protection against it.
How should you plan cash for each tranche?
| Week before due date | Action |
|---|---|
| 45 days | Confirm milestone evidence received |
| 30 days | Initiate wire from source account |
| 14 days | Confirm funds landed in developer account |
| 7 days | Lawyer confirms registration/FET paperwork |
Practical rule: Fund the next milestone as soon as the previous milestone is verified, not when the due date approaches.
How do foreign buyers align FET with each tranche?
| Tranche | FET task |
|---|---|
| Each installment | Inward remittance documentation |
| Final transfer | Cumulative FET supports Land Department registration |
Coordinate each inbound transfer with your lawyer, not one messy chain at the end. Tax context: Thailand Property Tax for Foreigners. Purchase roadmap: Buying Property Phuket Guide.
What should you do when a milestone is disputed?
| Evidence type | Strength |
|---|---|
| Third-party engineer report | High |
| Independent quantity surveyor | High |
| Developer letter only | Lower |
Keep emails factual, photograph everything, and route communications through your lawyer when stakes rise. A $70,000 installment is not the moment for casual texting.
What site visit cadence works for serious off-plan buyers?
Payment schedules are not “payment plans.” They are risk allocation between you and the developer. The stronger the milestone objectivity, the more sleep you keep.
This guide is for education and budgeting, not legal advice. Payment schedules, penalties, and developer practices vary by project, always confirm milestone definitions, remedies, and funding requirements with independent counsel before you sign or send money.
What a typical Phuket schedule looks like
Schedules vary by developer and by how much of the project is already sold, but the shape is recognisable.
| Stage | Share of price | Timing |
|---|---|---|
| Reservation | THB 100,000-500,000 | On agreement to proceed |
| Contract signing | 20-30% | Within 30 days of reservation |
| Construction milestones | 30-50% across 3-6 tranches | Over 18-36 months |
| Transfer and handover | 20-30% | On completion and registration |
Two patterns are worth recognising when you see them.
A front-loaded schedule, where 50% or more falls before the structure is complete, transfers risk from the developer to you. It is common on projects that need funding rather than on projects that are selling well, and it is a signal about the developer’s position as much as a commercial term.
A back-loaded schedule, where a large final tranche falls at transfer, is more buyer-friendly but requires you to have the money ready at a date you do not control. Buyers who invested the balance in something illiquid, or who assumed the completion date was firm, meet this the hard way.
Neither is inherently wrong. What matters is that the amount you have paid at any given moment stays roughly in line with what has actually been built, so that if the project stops you are not the only party with money at risk.
How do escrow and bank guarantees work in Thai off-plan deals?
| Mechanism | What it means | Buyer question |
|---|---|---|
| Project escrow account | Funds released on certified milestones | Who certifies release? |
| Bank guarantee | Developer posts guarantee for refunds | Expiry date and trigger events |
| Direct developer account | Highest counterparty risk | Why no escrow? |
Listed developers and major banks sometimes offer milestone-linked accounts, verify the account name matches the project entity, not an unrelated subsidiary.
What happens in a worked developer-delay scenario?
| Item | Amount |
|---|---|
| Daily penalty | $60 |
| 180 days | $10,800 theoretical |
| SPA cap (if any) | Often limited, read cap clause |
| Your carrying cost | Mortgage opportunity + FX |
Even with penalties, your capital is illiquid longer than planned, factor delay as a scenario, not a surprise. Cross-read Off-Plan Property Phuket Guide red flags.
What pre-signing checklist closes the most off-plan disasters?
Before you sign, confirm each of these:
- The contracting entity’s name matches the entity that owns the land, and you have seen the title.
- The construction permit has been issued, not merely applied for.
- Payments are tied to certified stages, with an independent certifier or your right to inspect.
- A long-stop date exists and you know what it entitles you to.
- Foreign quota is confirmed in writing, and the contract says what happens if it is gone at registration.
- The specification schedule is annexed, with named products.
- You can assign the contract, and you know on what terms.
- Your own lawyer has read all of it, and you have read their report.
Insider tip: photograph the site monthly after each payment, with the date visible. If nothing has changed between two seven-figure-baht tranches, you have evidence before a dispute rather than frustration afterwards. Owners who can produce a dated sequence are in a far stronger position than those relying on recollection.
How do payment schedules interact with total budget planning?
| Cost bucket | When it hits |
|---|---|
| Scheduled tranches | Construction phase |
| Transfer fees + tax | Completion |
| Sinking + CAM deposit | Handover |
| Furniture pack | Pre-rental |
Link to Hidden Costs Buying Property Thailand and Budget Planning First-Time Phuket Buyers for all-in cash sizing.
How do zero-interest post-handover plans change risk?
| Plan type | Cash-flow appeal | Hidden risk |
|---|---|---|
| 0% post-handover 12 mo | Easier year-one liquidity | Higher total price |
| Handover-heavy 30/70 | Fewer mid-build wires | Concentrated completion risk |
| Long 5-year developer loan | Low monthly | Default clauses, registration timing |
Read **total cost of ownership and **title transfer timing, some plans delay chanote transfer until finance is cleared.
What force majeure clauses actually do to milestones?
| Clause element | Strong | Weak |
|---|---|---|
| Extension cap | 90-180 days max | Open-ended |
| Buyer exit right | Refund after cap | No exit |
| Penalty continuation | Penalties after cap | Penalties waived |
If force majeure can extend indefinitely without exit, your tranche schedule becomes optional for the developer, not balanced risk.
When should you walk away from a payment schedule?
Walking away costs nothing; wiring the wrong 30% costs everything. Pair this guide with Due Diligence Thailand Step by Step before reservation.
Bottom line: A payment schedule is a risk map, not a convenience feature. The best schedule is not the one with the smallest deposit, it is the one that ties your cash to proof, gives you time when the developer slips, and leaves you liquid when the market changes your plans. Each tranche should buy verified progress, balanced delay remedies, and a credible exit if the map changes. Stack this guide with Off-Plan Property Phuket Guide and Buying Property Phuket Guide so milestones, FET and handover cash stay in one workbook. Keep cash early, document the site, and let independent counsel read the SPA before your first wire. Developers who resist objective milestones are telling you how they plan to use your capital; believe them. Your schedule should protect your sleep, not only the developer’s cash flow. If a milestone feels rushed, pause the wire, liquidity retained is leverage kept. No discount on the payment plan is worth a blank milestone definition. Proof before payment, every time. Your capital deserves milestones, not marketing dates. Off-plan success is mostly contract quality, the render is only the preview. Read the SPA like your money depends on it, because it does. Then read the full SPA contract document again carefully with your independent lawyer.
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Frequently Asked Questions
A commonly discussed structure is 30/20/20/20/10 tied to construction milestones, but developers use many variations including 30/70.
Contracts should define milestones with evidence such as construction certificates or defined completion stages, not vague dates.
SPAs may include late-completion penalties, but terms vary. Independent legal review is essential.
Contracts often include grace periods, late fees, and potential termination. Read default clauses carefully.
Some projects allow assignment with developer consent and a fee, commonly discussed around 2-5%,confirm in your contract.
Maksim Shchegolev
Founder, MORE Group
Founder of MORE Group. Four years in investment banking before moving to Phuket, where he has worked in the local property market since 2018. Oversees developer relationships and every engagement above $300K.
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