Sinking Fund and Common Fee in Thailand: Documents, Rates, and Traps

In 2026, disputes between condominium management companies and unit owners in Thailand continue to rise, with fee transparency at the center of most conflicts. For international investors buying a condo in Phuket or Bangkok, the sinking fund and common fee together can account for 15-20% of total ownership costs over the first five years. Understanding the documents that govern these payments is not optional - it is essential due diligence.

The sinking fund is a one-time contribution to the condominium's reserve fund, paid at the time of title registration. The common fee is a recurring monthly charge covering shared facilities: the pool, lifts, security, cleaning, and landscaping. Both are governed by the Condominium Act B.E. 2522 (1979), as amended in 2008. Neither is a tax. Both are obligations to the condominium's juristic person - the legal entity that manages the building on behalf of all owners.

Quick Answer

• Sinking fund rates in Phuket in 2026 range from 350 to 800 THB per sqm for mid-range and premium projects
• Common fee ranges from 35 to 120 THB per sqm per month, depending on the project class
• Both payments are defined in the condominium regulations (the building's governing charter) and ratified by the general assembly of owners
• The sinking fund rate can be revised by an owners' meeting with a quorum of at least 50% of votes
• When reselling a unit, the new buyer does not pay the sinking fund again if the previous owner already settled it
• Any outstanding common fee debt blocks title transfer at the Land Department

Scenarios and Options

Scenario 1: Buying a New Unit from a Developer

When purchasing directly from a developer, the sinking fund and first common fee payment are included in the closing package. The developer provides:

• Sale and Purchase Agreement (SPA) specifying the sinking fund amount
• Condominium Regulations (the building charter), which sets the common fee rate
• Payment receipt for the sinking fund, required at Land Department registration

A critical point: until management is formally transferred from the developer to the juristic person, the developer sets the common fee rate. After the handover, the rate is determined by the owners' general assembly. This transition is where many investors are caught off guard. There are well-documented cases in Phuket where common fee rates increased by 30-50% after handover, because developers had deliberately set artificially low rates to attract buyers during the sales period.

Scenario 2: Buying on the Secondary Market

When purchasing a resale unit, request these documents before proceeding:

• Debt-free Letter from the juristic person. Without this, the Land Department will refuse to register the transfer.
• Copy of the most recent Annual General Meeting (AGM) minutes, where current rates were approved
• Sinking fund confirmation showing the previous owner made the contribution
• Audited financial statement of the condominium for the past year

If the seller has unpaid common fee arrears, those debts do not automatically transfer to the buyer. However, registration cannot proceed until the debt is cleared. In practice, sellers settle outstanding balances from their sale proceeds before closing.

Scenario 3: Investment Purchase with Rental Management

If a unit is rented out through a management company, the owner pays the common fee - not the tenant. This is standard practice across all project categories. When calculating rental yield, treat the common fee as a fixed operating cost. For a 45 sqm unit in a project charging 80 THB/sqm/month, the annual common fee is 43,200 THB (approximately $1,200 USD), a figure that directly reduces your net yield.

Comparison Table

Main Risks and Mistakes

1. Ignoring the Condominium Regulations. The building charter is the primary legal document defining payment amounts, procedures for changes, and penalties for non-payment. Many buyers sign it without reading it. The regulations are written in Thai - commission a certified translation into English before signing.

2. Skipping the Financial Audit Review. A healthy sinking fund should hold at least 10% of the condominium's annual operating budget. If the reserve is depleted, expect a special assessment vote within one to two years of purchase. In Phuket, emergency levies of 20,000-50,000 THB per unit for roof repairs or lift replacement are not uncommon in older or underfunded buildings.

3. Misunderstanding Voting Rights. Each unit carries voting weight proportional to its share of total floor area. A studio owner with 25 sqm has significantly less influence than a penthouse owner with 150 sqm. An investor holding multiple units can effectively control key votes at the general assembly - including decisions on fee increases.

4. Buying into a Poorly Occupied Building. If more than 30% of units are unsold or abandoned, the common fee pool will be chronically underfunded. Facilities deteriorate, and unit values decline faster than the market average. Before committing, ask the juristic person for the current occupancy rate.

5. Confusing Condominiums with Villa Estates. The sinking fund and common fee framework applies specifically to registered condominiums under the Condominium Act. Villas within gated estates operate under a separate maintenance agreement governed by general contract law - not the Condominium Act. The documents, obligations, and dispute resolution mechanisms are different.

FAQ

What happens if I stop paying the common fee? The juristic person can impose penalties (typically 1-1.5% per month on the outstanding balance), restrict access to common areas, and pursue legal action. Any unpaid balance blocks the unit's title transfer upon sale.

Is the sinking fund refundable when I sell? No. The sinking fund is a non-refundable contribution to the building's reserve. It stays with the condominium, not with you.

How often can the common fee rate change? Typically once a year at the Annual General Meeting. A simple majority is sufficient to approve a new rate, provided a quorum of at least 25% is present at the first meeting. If quorum is not reached, a follow-up meeting may proceed without a quorum requirement.

Does common fee include utilities? No. Electricity and water consumed within the unit are billed separately. Common fee covers shared infrastructure only: corridors, lifts, pool, security, cleaning, and landscaping.

Who controls the sinking fund money? The juristic person holds and manages the funds. The financial accounts are subject to an annual independent audit and must be approved by the general assembly. Sinking fund reserves are legally required to be held separately from the operating budget.

Do foreign owners pay a higher common fee rate? No. Rates are uniform for all owners regardless of nationality. Differential pricing by nationality is prohibited under the Condominium Act.

What documents should I request from the developer before paying the sinking fund? Request: the condominium regulations with the stated rate, a calculation sheet for your specific unit, payment details for the juristic person account, and a sample receipt template.

Can the general assembly abolish the sinking fund? No. The sinking fund is a legal requirement under the Condominium Act and cannot be eliminated. The assembly can modify the rate or introduce additional special assessments, but the fund itself is mandatory.

Where are sinking fund assets held? In a bank account held by the juristic person. By law, these funds must be segregated from the operating budget. Always verify this in the audited financial statements before purchasing.

Pre-Purchase Document Checklist

Before signing any agreement, collect and review:

• Condominium regulations in Thai with a certified English translation, reflecting current rates
• Minutes from the last two AGMs, including budget resolutions
• Audited financial statements for the most recent fiscal year
• Sinking fund balance report, confirming adequacy of reserves
• Debt-free letter (required for secondary market purchases)
• Management agreement between the juristic person and the property management company
• Sinking fund calculation specific to the unit you are buying

A well-funded sinking fund and a transparent common fee structure are direct indicators of an asset's future liquidity. Buildings with depleted reserves lose value faster than comparable projects when market conditions tighten. Review the numbers before you sign - not after.

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