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Reservation Agreement in Thailand: 12 Clauses That Protect Your Deposit in 2026
A buyer once transferred 200,000 baht as a reservation deposit on a Phuket condo. Three weeks later, the project was quietly frozen. The money was never returned. The reason was straightforward: the reservation agreement contained no refund deadline, no penalty clauses, and not even the developer's registered legal name.
The reservation agreement is the first document you sign when purchasing property in Thailand. It records the intention of both parties and locks the unit for you for a set period. The deposit typically ranges from 50,000 to 300,000 baht. Yet this document is not governed by any dedicated law, which means developers can write almost anything they want into it.
That is precisely why the reservation agreement represents the highest-risk moment in any Thai property transaction. The checklist below covers 12 specific points you must verify before signing.
Quick Answer
- Deposit at reservation stage ranges from 50,000 to 300,000 baht (sometimes up to 5% of the unit price)
- A reservation agreement is not a sale-and-purchase contract and does not transfer ownership
- Reservation periods typically last 14 to 30 days, after which the main contract (SPA) is signed
- Thailand has no law requiring a developer to refund the reservation deposit if the buyer withdraws
- Developers must hold an EIA (Environmental Impact Assessment) licence for projects exceeding 80 units under the 2008 Condominium Act
- The foreign ownership quota in any condominium is capped at 49% of total floor area - if that quota is full, your reservation is worthless
Scenarios and Options
Scenario 1: Off-Plan Pre-Sale Purchase
This is the most common situation. The developer offers a 10-20% discount for early commitment, and the reservation agreement is signed before construction begins. The primary danger here is that the project may never receive a Construction Permit or an EIA approval. Verify that both documents exist before you sign anything.
If the developer says permits are 'in progress,' do not sign. At minimum, insist on a clause guaranteeing full deposit refund if the required approvals are not obtained.
Scenario 2: Completed Unit or Resale Property
Risk is lower but not absent. Confirm that the seller is the genuine owner by requesting the title document from the Land Department. In Thailand this is called a Chanote (Nor Sor 4 Jor). The reservation agreement must reference the specific Chanote number for the unit.
Scenario 3: Remote Purchase Without Visiting Thailand
This carries the highest risk profile. Buyers sign documents via email or messaging apps and transfer funds to an account they have never encountered before. The minimum safeguard: insist that all payments go only to the developer's corporate bank account at a Thai-registered bank. Never send money to a personal account belonging to a sales agent or manager.
| Parameter | Off-Plan Pre-Sale | Completed Unit | Remote Purchase |
|---|---|---|---|
| Typical Deposit | 100,000 - 300,000 THB | 50,000 - 200,000 THB | 100,000 - 300,000 THB |
| Reservation Period | 14 - 30 days | 7 - 14 days | 14 - 30 days |
| Primary Risk | Project never built | Unit sold to another buyer | Payment fraud |
| Key Documents Required | EIA, Construction Permit, Company Registration | Chanote, Tabien Baan | All of the above plus Power of Attorney |
| Deposit Refund Likelihood | Medium | High | Low without legal counsel |
| Legal Counsel Requirement | Essential | Recommended | Critical |
The 12-Point Reservation Agreement Checklist
Print this checklist and review the agreement line by line.
1. Full legal company name. Not the brand or marketing name - the exact name as registered with Thailand's Department of Business Development (DBD). Verify it at datawarehouse.dbd.go.th.
2. Company registration number. A 13-digit identifier. Without it, you cannot run any official background checks on the developer.
3. Precise unit description. Building number, floor, unit number, and area in square metres. Not 'Unit Type A' - a specific unit with a unique identifier.
4. Price in Thai baht. The full unit cost stated in baht. If the price appears in US dollars or any other currency, treat it as a red flag: all Thai property transactions are settled in baht.
5. Deposit status. Is the deposit credited toward the purchase price, or is it a separate non-refundable fee? This distinction is critical and must be explicit.
6. Refund conditions. What happens if the buyer withdraws? What happens if the developer fails to deliver? If there are no refund conditions at all, do not sign.
7. Reservation expiry date. A clearly stated date by which the Sale and Purchase Agreement (SPA) must be signed - normally within 14 to 30 days.
8. Payment schedule. Even as a preliminary document, the agreement should outline an approximate schedule: how much is due at SPA signing, during construction, and at handover.
9. Delay penalty clause. Reputable developers include a compensation clause for construction delays. The market standard is 0.01% of the unit value per day of delay.
10. Foreign ownership quota confirmation. The agreement must confirm that the unit falls within the 49% foreign freehold quota. Without this, freehold registration in your name is legally impossible.
11. Foreign Exchange Transaction Form (FETF) details. To register freehold ownership as a foreign buyer, you need a FETF proving funds were remitted from abroad. The agreement must include the developer's bank details for an international wire transfer.
12. Dispute jurisdiction. Which court or tribunal handles disputes - a Thai court or arbitration? A clause pointing to a court outside Thailand is effectively unenforceable when the property itself is located in Thailand.
Main Risks and Mistakes
Mistake 1: Signing without verifying the company. A DBD database check takes five minutes. You will see the registration date, registered capital, directors, and annual filings. A company registered less than two years ago with 1 million baht in capital selling a 500-million-baht project warrants serious scrutiny.
Mistake 2: Transferring funds to a personal account. Money must go only to the developer's registered corporate account. Any other arrangement puts your capital at immediate risk.
Mistake 3: Missing EIA for large-scale projects. Projects exceeding 80 units must obtain an EIA before commencing sales. Without it, the project cannot legally be built.
Mistake 4: Trusting 'guaranteed rental yield' figures. If the reservation agreement mentions guaranteed returns of 10-15% per year, treat it as a marketing device. Actual rental yields for Phuket condominiums average 5-7% based on current market data.
Mistake 5: Signing a Thai-only document without translation. In Thai courts, the Thai-language version of any agreement takes precedence. Always request a bilingual version (Thai and English) or a certified translation.
Mistake 6: Overlooking unilateral termination rights. Some developers include a clause allowing them to cancel the agreement without refunding the deposit. This clause must be removed or rewritten before you sign.
FAQ
Is a reservation agreement legally binding in Thailand? Yes. Under the Thai Civil and Commercial Code, any signed agreement between two parties carries legal force. However, it does not transfer ownership - that requires a fully executed SPA and registration at the Land Office.
Can the reservation deposit be refunded? It depends entirely on the terms written into the agreement. If the document states 'non-refundable deposit,' recovering the money is extremely difficult. Always negotiate a refund clause that applies when the developer fails to meet its obligations.
How much does a lawyer charge to review a reservation agreement? Typically 10,000 to 30,000 baht per document review. That is a modest cost relative to the deposit amount it protects.
Do I need to be physically present in Thailand to sign? No. You can issue a Power of Attorney to a representative in Thailand. The document must be notarised and legalised at the Thai consulate in your home country, or authenticated by a notary and apostilled.
What if the developer refuses to amend any terms? This is a significant red flag. Established developers - particularly those listed on the Stock Exchange of Thailand (SET) - typically use standardised contracts and are open to negotiation. If a smaller developer refuses all amendments, consider choosing a different project.
How does a reservation agreement differ from an SPA? A reservation agreement records intent and reserves the unit. The Sale and Purchase Agreement (SPA) is the full legal contract covering the payment schedule, technical specifications, and ownership transfer conditions.
Can a reservation agreement be signed online? Technically yes, but Thai courts have not yet established consistent precedent on electronic signatures in real estate transactions. Signing a physical copy or using a notarised Power of Attorney remains the safer approach.
What additional checks apply when buying a villa rather than a condo? For villas, the critical question is land ownership. Foreigners cannot directly own land in Thailand. The standard structure is a long-term leasehold arrangement (typically 30-year terms). The reservation agreement must specify the type of land title (Chanote, Nor Sor 3 Gor) and the ownership structure.
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