Overview
You Are Buying Something That Does Not Yet Exist
Off-plan property is the most common type of purchase made by expats visiting Phuket, Pattaya, Chiang Mai and Bangkok on short trips. A show unit, a floor plan, a projected completion date and a persuasive sales team are enough to secure six-figure deposits every weekend.
The appeal is real. Pre-launch prices are often the lowest. Early buyers receive the best units. Payment is staged over the construction period rather than required in full upfront. For buyers who understand the risks, off-plan can be a sound investment.
The problem is that most buyers do not understand the risks. They sign a reservation agreement on the day of the sales pitch, pay a deposit, and only speak to a lawyer months later when problems have already started. We see this pattern regularly. We have also helped clients untangle serious problems that began with an off-plan purchase where no legal review took place.
Pook, Lead Barrister
Off-plan is where we see the most avoidable mistakes. A client in Phuket paid a 20% deposit on a beachfront development in 2022 and came to us in 2024 when the developer had stopped responding. The reservation agreement they signed had no completion guarantee, no escrow requirement and no refund provision. We recovered a partial settlement, but it was a fraction of what they had paid. The contract review they skipped would have cost a few thousand baht.
Section 1
Developer Risk Is Real
Thailand has no mandatory escrow system for residential off-plan sales. Developer insolvency, project abandonment and indefinite delays are documented events across all major property markets in the country. A developer who takes deposits and fails to complete is a recurring feature of the Thai property market, not a rare occurrence. We have helped clients recover funds from failed off-plan developments and represent buyers pursuing claims against developers who stopped construction. The experience consistently reinforces one lesson: contract terms agreed before the deposit are the only reliable protection.
This does not mean off-plan is to be avoided entirely. It means buyer protection must be built into the contract, because it will not be built in by default. We review and negotiate these protections into the contract before clients commit.
- No mandatory escrow requirement for off-plan residential sales in Thailand.
- Developer insolvency and project abandonment are documented risks.
- Delays of one to three years beyond the promised completion date are common.
- Construction quality may differ significantly from the show unit.
- Promised facilities (pool, gym, concierge) are not always delivered.
- The 49% foreign quota in a building may be filled before your transfer is processed.
Section 2
The Reservation Agreement
Most off-plan purchases begin with a reservation agreement and a deposit, often paid on the day of the site visit. These agreements are drafted by the developer's lawyers and are rarely buyer-friendly. They commonly contain provisions that forfeit the deposit if the buyer withdraws, while providing the developer with limited obligations if they delay or fail to complete.
Do not sign a reservation agreement or pay a deposit before having the document reviewed by your own lawyer. The cost of a same-day or next-day review is minimal compared to the deposit you are about to commit.
- Reservation agreements are drafted to protect the developer, not the buyer.
- Deposit forfeit clauses are standard and enforceable.
- Many agreements are silent on what happens if the developer delays or fails to complete.
- Review by independent legal counsel is essential before signing.
- Never let sales pressure or time-limited offers cause you to sign without legal review.
Section 3
What a Well-Drafted SPA Should Contain
The Sales and Purchase Agreement is the binding contract. When we review an off-plan SPA on behalf of a client, we look for specific protections that are not present in the standard developer template.
- A fixed completion date with liquidated damages for late delivery.
- A clear description of the unit including floor, aspect, area and specification.
- Written confirmation of all promised facilities and common areas.
- A refund provision if the developer fails to complete within a specified period.
- Confirmation of the foreign quota status of the unit.
- Clarity on what happens to payments if the project is cancelled.
- EIA (Environmental Impact Assessment) and building permit confirmation.
- Title deed details confirming the land on which the development is being built.
Section 4
Escrow and Payment Staging
Some reputable developers offer escrow arrangements for international buyers, particularly for high-value units. Where escrow is available, funds are held by a third party and released to the developer in stages as construction milestones are verified. We advise clients to insist on milestone-based escrow wherever possible and to have us verify the milestone conditions before each release is made.
Where escrow is not offered, staged payments tied to construction milestones provide the next-best protection. We advise clients to avoid paying large lump sums before construction begins, and to ensure that payment schedules are linked to verifiable progress rather than calendar dates. We have seen payment schedules structured so that over 80% of the price was paid before any structure was visible, a term we would never allow into a contract we negotiated.
Before You Sign an Off-Plan Agreement
Do not sign the reservation agreement on the day of the site visit.
Have the reservation agreement reviewed by your own lawyer before signing.
Ask the developer for proof of title on the land where the project is being built.
Confirm that an EIA approval and building permit have been obtained.
Review the developer's track record on previous completed projects.
Request a copy of the SPA template before committing to a deposit.
Confirm the foreign freehold quota availability in the specific building.
Understand the full payment schedule and what triggers each instalment.
Negotiate a refund provision and completion guarantee before signing.
Ask whether an escrow option is available.
Key Takeaways
Off-plan carries genuine risk in Thailand. Developer insolvency, delays and quality shortfalls are documented patterns, not theoretical concerns.
Thailand has no mandatory escrow system for residential off-plan sales. Buyer protection must be negotiated into the contract.
Reservation agreements are written to protect the developer. Never sign one without independent legal review, regardless of sales pressure.
A well-drafted SPA should include a fixed completion date, liquidated damages for delays, a refund provision, and a clear specification of what you are buying.
Payment staging tied to construction milestones is safer than lump sums based on calendar dates.
Confirm the foreign freehold quota position in the building before committing, as quota can be used up between reservation and transfer.
The cost of a contract review before signing is a fraction of the deposit at risk if something goes wrong.
Speak with Our Team
Don't sign before we've reviewed it.
We review reservation agreements and off-plan SPAs before clients commit any funds.
Property Law