Defects at Property Handover in Thailand: How to Protect Your Rights

Short Answer

If you discover defects at the handover of property in Thailand, you have two levels of protection: the developer's contractual warranty (normally set out in the sale and purchase agreement) and the statutory liability of the seller for defects in the thing sold under the Thailand Civil and Commercial Code. The key to protecting yourself is a thorough snagging inspection with written documentation of all defects before you sign the handover certificate and before making full payment. The more you record in writing, the stronger your negotiating position.

Where Liability for Defects Comes From

In Thailand, buyer protection rests on two foundations, and it is important to understand the difference between them.

• Developer's contractual warranty. The sale and purchase agreement for a new-build property (particularly with larger developers) normally sets out a warranty period. This often operates on two levels: a longer period covering structural and load-bearing elements of the building, and a shorter period covering finishes, engineering systems and fixtures. The specific periods are determined by the contract, so there is no single 'statutory' number of years - you need to read your own contract.
• Statutory seller's liability for defects. The Civil and Commercial Code provides that the seller is liable for defects in the thing sold that reduce its value or fitness for ordinary use. This includes latent defects that could not have been noticed on a reasonable inspection at the time of purchase. This liability applies even where the contract does not expressly state it.

Important note: the law permits the parties to limit or exclude liability for defects by agreement, but such an exclusion will generally not apply where the seller knew of the defect and concealed it. A developer therefore cannot fully shelter behind a disclaimer clause where the issue involves deliberately concealed defects.

Latent Defects: What to Watch For

A latent defect is one that existed at the time of handover but was not and could not have been discovered on a reasonable inspection. Typical examples in Thai condominiums and villas include:

• roof, balcony and bathroom leaks that only appear during the rainy season;
• waterproofing failures and mould inside walls;
• concealed defects in electrical wiring and plumbing;
• subsidence of floors and cracks in structural elements;
• a non-functioning or incorrectly installed air-conditioning system.

Under the law, timeliness matters for a claim based on defects in goods: once a defect is discovered, the buyer must act without undue delay. The right of action for defects is subject to a limitation period that runs from the moment the defect is discovered (not from the date of purchase). You therefore cannot afford to delay submitting a written claim: silence may be interpreted as acceptance of the property in its current condition.

Snagging: Your Primary Tool

Most disputes are won or lost at the snagging stage, not in court. Snagging is a formal inspection of the property before the handover certificate is signed.

• Carry out the inspection before signing the handover certificate and before making the final payment or registering the transfer of title at the Land Department.
• Compile a snag list in writing, with photographs and video, dated. Deliver it to the developer against a signed acknowledgement or by official letter or email with confirmed receipt.
• Do not sign any document stating that the property is accepted 'without reservation' if you do have reservations. If you are pressured into signing, add a note referencing your list of defects.
• Consider engaging an independent building inspector: this is common practice in Thailand, particularly for villas and high-value condominiums.
• Keep the entire contract, brochures, specifications and marketing materials: a discrepancy between the actual quality and what was promised in the specification is also a ground for a claim.

Developer's Warranty vs. Statutory Liability: Comparison

Remedies Available to the Buyer

Depending on the circumstances and the wording of the contract, the buyer may claim:

• rectification of defects (repair carried out at the developer's cost) - this is the most common and realistic course of action;
• reduction of the price or monetary compensation proportionate to the defect;
• damages for any additional expenses incurred as a result of the defects;
• in serious cases where the property is substantially unfit for use, the question of rescinding the transaction may arise (this is a complex scenario that requires a lawyer).

Where the property forms part of a condominium, defects in common areas (roof, facade, lifts, swimming pool) fall within the responsibility of the condominium juristic person and the developer, and these issues are often more conveniently addressed collectively through the co-owners' committee.

What to Do

1. Do not sign the handover certificate blindly. Carry out a thorough snagging inspection before signing and before making full payment. Document every defect in writing, with photographs and dates.
2. Engage an independent inspector for a villa or a high-value unit: their report is powerful evidence.
3. Submit a written claim to the developer listing the defects and requiring that they be remedied within a reasonable time. Use email or a letter with confirmed receipt, and keep all correspondence.
4. Act promptly once a latent defect is discovered: limitation periods run from the date of discovery, and delay weakens your position.
5. Gather evidence: the contract, specifications, marketing materials, photographs, the inspector's report and all correspondence.
6. Consult a Thai lawyer if the developer ignores your claim or the defects are serious. A lawyer can assist with a formal demand, assess the prospects of compensation, price reduction or rescission, and prepare a claim if necessary.
7. For condominiums, raise the question of defects in common areas through the condominium juristic person and the co-owners' committee.