In more detail
Scope of application
Pursuant to the Consumer Protection Act B.E. 2522 (1979), the OCPB's Committee on Contracts issued the Notification for the Business of Selling Condominium Unit with Reservation to be a Contract-Controlled Business, B.E. 2567 (2024) ("Notification"). The Notification aims to address the large number of complaints from consumers regarding the confiscation of reservation payments for condominium units.
This Notification applies to the reservation agreement for a condominium unit where the consumer agrees to give reservation payment or other similar benefits to the business operator. The Notification also applies to the condominium unit reservation via electronic channels, and the business operator still has its duties vis-à-vis consumers when using the digital platform as an intermediary.
Key requirements
The reservation agreement for a condominium unit will be required to contain clauses similar to the form attached to the Notification. The key clauses include the following:
- Termination rights of the consumer, e.g., upon a failure by the business operator to apply for and receive a building construction permit by the agreed date, or if the environmental impact assessment (if required) is not approved.
- Termination rights of the business operator, e.g., when the consumer is unable to secure a loan.
- Conditions for the return of the reservation payment and limited situations where the business operator can confiscate the reservation payment.
Moreover, the Notification prohibits certain terms in the condominium unit reservation agreement. The prohibited terms include: (i) the exclusion or limitation of the business operator's liability; (ii) a clause allowing the business operator to confiscate all or part of reservation payment while the consumer is not in default; and (iii) a clause requiring the consumer to pay an assignment fee for transferring the condominium unit reservation.
What's next?
The Notification will take effect after 120 days have lapsed from the date it was announced in the Royal Gazette, which will be on 31 January 2025. Therefore, there is still time for the developers to prepare a new form or amend the existing reservation template for a condominium unit to comply with the Notification.
Please contact our Real Estate Team if you have any questions or require any assistance.
