What Is the SPA in Thai Property Law?
Under Thai law, specifically the Civil and Commercial Code and the Condominium Act B.E. 2522 (and subsequent amendments), the SPA is the primary document that:
- Defines the exact property being sold (unit number, size, floor, view)
- Sets out the complete payment schedule
- Establishes both parties’ obligations and rights
- Specifies completion dates and grace periods
- Governs dispute resolution
- Determines what happens at handover
The SPA is not a simple document. For off-plan condominiums, you may encounter 20-50 page contracts that require careful review. Do not sign without reading everything, and ideally, do not sign without professional legal review.
SPA Signing Process
Step 2: Lawyer review Your Thai property lawyer reviews the SPA and provides comments. This typically takes 3-7 days. Revisions may be negotiated.
Step 3: SPA negotiation (if needed) Standard terms can often be adjusted: payment deadlines, force majeure definitions, snag rectification periods. Developers are more flexible on smaller points than on payment percentages.
Step 4: Signing SPA can be signed in person in Phuket or, for international buyers, via notarized Power of Attorney. Both developer representative and buyer (or authorized representative) sign. Both parties retain original copies.
Step 5: SPA payment The deposit amount (25-35%) is transferred, typically within 7-30 days of signing. This payment should come from your overseas account to obtain the FET certificate required for freehold registration.
Critical Clauses to Review in Every Thai Property SPA
Watch for: Vague milestone descriptions like “when developer decides foundation is complete.” Milestones should be tied to objective, verifiable construction stages.
2. Completion Date and Grace Period
This is one of the most negotiated clauses. The SPA should state:
- Target completion date (estimated handover)
- Long-stop date (latest acceptable completion, often 18-24 months after target)
- Buyer’s rights if long-stop date is breached (termination? compensation?)
Thai developers routinely request 12-24 month grace periods beyond projected completion. This is broadly accepted market practice, Phuket construction faces real challenges including monsoon season, supply chains, and permit processing. However, if the long-stop date offers no remedy for the buyer, this is a red flag.
3. Unit Specifications
Every specification you were shown in the sales presentation should be documented in or attached to the SPA:
- Exact size: gross versus net usable area (the difference can be 15-25%)
- Fixtures and finishes: brand names or specification level for kitchens, bathrooms, flooring
- Furniture package: if included, list every item with specification
- Views: “pool view” or “sea view” should be defined, how much sea visible? What happens if a new building obstructs the view?
- Appliances: brands, models or minimum specifications
Watch for: Phrases like “developer reserves the right to substitute materials of similar quality.” This language allows developers to downgrade finishes without recourse. Push to limit substitution rights or define minimum standards.
4. Common Areas and Facilities
The SPA should describe or reference the confirmed common areas:
- Swimming pool (size, type, infinity, children’s, etc.)
- Gym, reception, lobby
- Parking (ratio per unit, covered vs. uncovered)
- Garden areas, rooftop facilities if applicable
Common areas described in a developer brochure are not legally binding unless referenced in the SPA. If the developer promises a rooftop bar and infinity pool in the sales pitch, ensure those commitments appear in the contract.
5. Buyer Default Clauses
What happens if you can’t make a payment? Standard provisions:
- Grace period: 30-60 days before default is triggered
- Notice requirement: developer must send written notice before terminating
- Developer’s remedy: usually retention of all payments made to date up to a defined cap
- Deposit forfeiture cap: some SPAs limit forfeiture to 30% of purchase price even if more was paid
Negotiate for a clear termination and refund mechanism rather than open-ended forfeiture.
6. Developer Default Clauses
If the developer can’t complete the project:
- What triggers developer default? (insolvency, failure to obtain permits, long-stop date breach)
- What are your remedies? (full refund, compensation for interest, lost opportunity)
- Is there a surety bond or escrow protecting your payments?
Critical: In Thailand, buyer deposits are not automatically held in protected escrow unless the developer has voluntarily established one or if mandated by project financing. Ask whether deposits are held separately or commingled with developer operating funds.
7. Force Majeure
Post-pandemic SPAs should contain modern force majeure language. Check:
- What events qualify as force majeure (pandemic, natural disaster, government action)
- How long force majeure suspends obligations
- Whether force majeure permits permanent termination or only delay
- Who bears the cost of delays caused by force majeure
8. Transfer Tax Allocation
Standard in Thailand: buyer pays 2% transfer tax on the appraised value, seller pays Business Tax (3.3% if project held under 5 years) or Withholding Tax. However, many developers pass transfer taxes to buyers, confirm in the SPA exactly which party pays what, and factor this into your total cost. See hidden costs of buying property in Thailand.
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Bilingual SPAs: Thai vs. English Version
What this means for you:
- Have your Thai lawyer review the Thai version specifically
- Don’t rely solely on your reading of the English translation
- Ask your lawyer to flag any material differences between versions
- Key numbers (prices, percentages, dates) should be identical in both versions: discrepancies are a serious concern
What to Negotiate in a Thai Property SPA
| Clause | Typical Default | What to Request |
|---|---|---|
| SPA payment deadline | 30 days after signing | 45-60 days (more time for international transfers) |
| Long-stop date grace | 24 months | 12-18 months with buyback/compensation option |
| Furniture substitution | Broad discretion | Specific brand/specification minimums |
| Snag rectification period | 30 days | 60-90 days with retention right |
| Force majeure duration | Open-ended | Maximum 12 months then buyer termination right |
| Payment penalty interest | 2% per month | Request reduction to 1% per month |
SPA Review Costs and Timeline
| Service | Provider | Typical Cost | Timeline |
|---|---|---|---|
| Basic review (English) | Junior lawyer | 15,000-25,000 THB | 3-5 days |
| Full bilingual review | Senior lawyer | 30,000-60,000 THB | 5-10 days |
| Review + negotiation | Law firm | 50,000-100,000 THB | 7-14 days |
| Review + full deal management | Specialist firm | 80,000-150,000+ THB | Ongoing |
MORE Group works with established property law firms in Phuket and can refer buyers at no additional cost.
Pros and cons of signing the SPA quickly
| Pros of fast SPA signing | Cons of fast SPA signing |
|---|---|
| Locks unit price before the next price tranche | Less time for lawyer review of Thai text |
| Keeps construction payment schedule on track | Weak negotiation leverage on grace periods |
| Satisfies developer sales quotas for your floor plan | Buyer may miss escrow or surety bond gaps |
Insider tip: Request the draft SPA at reservation, not after you pay the booking fee. Two weeks of lawyer review is normal; developers who refuse draft access before reservation are a red flag.
Common SPA mistakes foreign buyers make
Mistake 2, Wiring from the wrong account. Funds must trace to the buyer named on the contract for freehold registration. Company accounts, friend transfers, or THB sourced locally create Land Office friction. Align with bank transfer rules first.
Mistake 3, Ignoring the snag period. Many SPAs allow 30 days post-handover for defect lists. Missing the window means you accept the unit as-is. Calendar the inspection before you fly home.
Mistake 4, Assuming brochure amenities are contractual. Pool renderings and rooftop bars belong in the SPA or annex, not in a sales deck alone.
The most expensive of them is signing before the specification annex exists, because every other mistake on this list can be argued about afterwards and that one cannot.
Buyer scenarios: which SPA clauses matter most to you
The same contract carries different risks depending on what you are buying and why, and knowing your own profile tells you where to spend your lawyer’s time.
Scenario A, the off-plan buyer on a multi-year build. Your exposure is time. The clauses that matter are the delay penalty with a figure attached, a long-stop date after which you can terminate and recover paid funds, milestones defined as verifiable construction events rather than calendar dates, and the final tranche payable after the snag list is closed. Also check the assignment clause, because if your circumstances change mid-build it is the only exit you have.
Scenario B, the buyer of completed stock. Your exposure is the asset’s condition and history rather than its delivery. The clauses that matter are what is included at the price, what condition the unit is warranted to be in, who bears outstanding CAM arrears, and the completion timetable. The diligence weight shifts from the contract to the juristic person’s accounts.
Scenario C, the villa buyer. Your exposure is structure. The lease or company arrangement is the purchase, and the SPA is only half the document set. What matters is who grants the lease renewals, whether a successor to the land is bound, how the building ownership is registered separately from the land, and what happens to the structure if the lease is not renewed.
Scenario D, the buyer relying on rental income. Your exposure is whether the income is lawful and achievable. The SPA rarely addresses this, which is the point: you need the hotel licence position and the house rules confirmed separately, in writing, and a management agreement reviewed alongside the purchase contract rather than after it.
Whichever profile fits, read the contract in full before your lawyer does, not instead of it. You know what you were told during the sales process; your lawyer does not. The most useful thing a buyer contributes to a contract review is a list of the promises that are missing from the document.
Decision framework: when to walk away from an SPA
Three situations justify ending the conversation rather than negotiating further.
The developer will not attach the specification schedule as a contractual annex. Without it, “premium finishes” is unenforceable, and you have no remedy at handover for a substitution you did not agree to.
The contract contains no delay provision and the developer will not add one on a multi-year build. That is asking you to accept the most probable adverse outcome with no recourse.
The receiving entity is not the party named in the contract, and no explanation reconciles the two. Money paid to the wrong entity is difficult to trace and harder to recover, and the question has a simple correct answer that a legitimate seller can give immediately.
Everything else, price, schedule, fee splits, inclusions, is negotiation. These three are structural.
Everything above assumes you have the SPA before committing money. If a reservation is being requested with the contract “to follow”, ask for a draft first: paying for the right to later read terms you have not seen is the weakest position available in this process, and a developer with a settled contract has no reason to withhold it.
Post-handover: SPA obligations that survive closing
The SPA does not end at key handover. Surviving obligations often include defect rectification windows, warranty on fixtures, completion of common-area items, and juristic person registration for the owners committee. Request a snag-list template and developer response SLA in writing before final payment tranches.
Developers sometimes schedule the last 5-10% payment at handover while retaining rectification duties for 30-90 days. If your SPA silent on retention holdback, negotiate a small escrow (often 50,000-150,000 THB) released when snag items close. That aligns incentives better than unlimited trust after the final wire.
Foreign buyers flying out after handover should appoint a local representative for snag walkthrough, many defects (AC drainage, tile grout, balcony waterproofing) appear only after first monsoon rains, 60-90 days post-completion.
Keep the signed contract, the annexes and the snag list together with the title documents; the obligations that survive completion are only enforceable if you can produce what was agreed, and these papers are needed again when you eventually sell.
Frequently Asked Questions
Yes. Many developers allow remote SPA signing via notarized Power of Attorney (POA). You sign the POA in your home country (notarized and potentially apostilled depending on the developer's requirements), and your representative in Thailand signs the SPA on your behalf. Some developers also accept digital signatures for certain stages, though the Land Office transfer still requires physical presence or POA.
The SPA is the private contract between buyer and developer. The Land Office transfer is the government registration that legally changes ownership and is recorded on the title deed. Both are required. The SPA happens first (at contract signing), and the Land Office transfer happens at handover when the property is completed. Your FET certificates must be presented at the Land Office to register foreign freehold.
Yes, in Thai property transactions, the SPA (Sale and Purchase Agreement) is functionally equivalent to what other jurisdictions call a contract of sale, purchase agreement, or conveyance agreement. It is the primary binding document between buyer and developer. In Thailand, the SPA is a private contract that creates obligations for both parties, but ownership only legally transfers at Land Office registration.
If a developer enters bankruptcy or insolvency proceedings, your position as an SPA holder depends on whether your deposits were held in escrow (protected) or in the developer's general operating account (at risk). You become an unsecured creditor in the insolvency proceedings, meaning recovery may be partial or take years. This underscores the importance of buying from established developers with completed project track records, and verifying payment escrow arrangements.
From reservation to signed SPA typically takes 30-60 days. The timeline: developer presents draft SPA (1-3 weeks after reservation), your lawyer reviews and raises questions (1-2 weeks), negotiation of any revisions (1-2 weeks), final SPA agreed and signed, SPA payment made. International wire transfers add 2-5 business days. Budget 45 days as a comfortable working timeline to avoid rushing any stage.
The three clauses worth negotiating hardest
Most of an SPA is standard and not worth the fee to argue over. Three clauses repay the effort.
The completion mechanism. Establish whether each payment is triggered by a named construction milestone or by a calendar date, what compensation applies if handover slips, on what timetable, and at what point delay becomes a ground to terminate and recover what you have paid. A schedule tied to milestones protects you; one tied to dates protects the developer.
The specification and the variation right. Developers routinely reserve the right to substitute materials and adjust layouts. Ask for that right to be limited to items of equal or better quality and for a defined tolerance on floor area, with a price adjustment or a right to withdraw if the delivered area falls outside it.
The quota clause. Where you are buying freehold, the contract should say what happens if the building’s foreign floor-area allowance is exhausted before your transfer: whether a registered lease is substituted, at what price adjustment, and whether you may withdraw with your money back. Without that clause the risk sits entirely with you.
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