Violation of construction deadlines by developers and unfinished construction

What to look for in the contract of purchase and sale of an apartment under construction?

Terms of construction and transfer of apartment ownership.

The construction completion date, year and month must be indicated. Developers usually use their rights for up to 1 year.

Consequences of violation of deadlines *

The first option, the actual termination of the contract by the buyer, the return by the developer of the funds received under the contract, and the payment of a penalty to the buyer (according to the contract, but not more than 15% per annum).

The second option, if the buyer agrees to wait for the completion of construction, he has the right to demand payment of a fine in the amount of 0.01% of the amount paid by him under the contract for each day of delay, but in aggregate no more than 10%. Upon reaching this amount, the buyer can terminate the contract.

The third option, in case of violation of the construction deadlines as a result of force majeure, the buyer can demand termination of the contract and payment of interest in accordance with the rate of the Krung Thai bank.

* according to the Model Agreement for the sale of an apartment in a condominium, approved by the Ministry of Internal Affairs of Thailand. Other conditions may apply for a leasehold.

When to sound the alarm

You should go to court only after the developer has violated the terms specified in the contract. If the construction is underway, but you suspect that it will not be completed on time, this is not a reason to sue. Perhaps the developer will complete the construction on time. If the transfer of ownership of the apartment is to be carried out in a month, and there is not even a foundation pit on the construction site - violation of the deadlines can be clearly demonstrated and their evidence can be proved in court, you can go to court before the date specified in the contract.

What to go to a lawyer with

For consultation with a lawyer, you need an agreement with the developer, receipts for payment of all payments, if any - correspondence with representatives of the developer, a copy of the passport. The original contract will be required later.

Which court to apply to

Depends on the court clause in the contract, as well as on the circumstances of the case. This can be a civil court of general jurisdiction, consumer protection, an economic court.

The difference between them is significant, starting with the amount of legal costs, and ending with the period of consideration of the case in court.

Legal costs

When filing a claim with a civil court of general jurisdiction, the court fee will be 2% of the amount of the claim, but not more than 250,000 Baht (for a claim amount up to 50 million Baht). The plaintiff, when filing an application for the protection of consumer rights, is exempted from paying the state fee. The arbitration fees depend on the value of the claim.

Other costs will include payment for translation of documents into Thai and translation services in court, payment for examination, and, of course, payment for the services of a lawyer.

Process

The first stage is drawing up and sending a claim to the developer. If the developer refuses to fulfill the claim or does not respond, an application to the court follows.

The term of consideration will depend on the complexity of the case and on the workload of the court. The first meeting will take place in a few months. At the first meeting, the parties will be asked to settle the dispute and sign a compromise agreement. If the parties cannot come to an agreement, the process may drag on for several years.

The physical presence of the plaintiff in Thailand may be required at the stages of testimony and announcement of the court decision. All other actions, including filing a statement of claim in court, can be assigned to a lawyer.

Bankruptcy proceedings

2 options

1. If the money is paid for the apartment to the developer, in respect of which the bankruptcy procedure has been initiated, it is necessary to join the procedure as a creditor. You can join the process after the first hearing. If you do not file a debt in the bankruptcy process, after its completion, it will no longer be possible to go to court with a claim for a refund, the defendant will be declared bankrupt, all debts will be considered paid off.

2. If the apartment is paid for in full by the buyer, the developer has already received the vouchers for the apartments, but for some reason the ownership or long-term lease has not been registered in the name of the client in the land department, the procedure will be different.

In this case, the property actually belongs to the buyer. Accordingly, the court that deals with the bankruptcy procedure must submit an application for the exclusion of the apartment from the company's assets and supporting documents (agreement and confirmation of 100% payment for the apartment). The petition must be filed before the first bankruptcy hearing. The court, at its discretion, may decide to exclude the bankruptcy apartment and assets without waiting for the first hearing or at the first hearing.

You can also join a bankruptcy case as a creditor for debt under guaranteed lease agreements. You can demand both the amount of debt for past periods, and those amounts that will not be paid for future periods, for the entire duration of the guaranteed lease agreement. In any case, the court will make the decision to satisfy such a claim at its own discretion.

Author: Alexandra Agapitova

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