This information is for reference only and is not legal advice. Consult a licensed lawyer before any transaction.
Escrow Act
Escrow Act B.E. 2551 (2008)
The information is reviewed and updated monthly against official sources.
In short
Thailand's Escrow Act B.E. 2551 (2008) lets buyers and sellers voluntarily appoint a licensed, neutral escrow agent who holds the purchase money and monitors performance, releasing funds and title only when contract conditions (such as completion and registered transfer) are met, with escrow assets shielded from the agent's own creditors and bankruptcy.
Section 3: Key definitions: escrow business, contract, agent and account
The Act defines the core terms. Escrow business means acting as a neutral party, for a fee, to monitor that the contracting parties perform their obligations. The escrow agent is the licensed operator; the escrow account is a bank deposit the agent opens in its own name for the parties' benefit; parties are the buyer paying money and the seller transferring property.
Section 5: Escrow is voluntary
When the parties sign a reciprocal sale contract, they may, but are not obliged to, bring in an escrow agent by concluding a separate escrow contract and following the rules set by this Act. Escrow is an optional protective tool the buyer and seller choose to use, not a mandatory step for any transaction.
Section 6: Written escrow contract and required terms
The escrow contract must be in writing and signed by both parties and the agent. It must state the names and addresses of everyone, the date, the underlying sale contract, the timing or conditions for delivering property and money, the rules for releasing funds, each side's rights and duties, and the agent's fees and charges.
Section 7: Duties of the escrow agent
The agent must track each side's performance within the agreed deadlines and conditions, safekeep the money, property or title documents handed to it, and then pay out the funds and arrange transfer of ownership to the proper party. The agent may also provide further related services if the parties agree, under rules fixed by the Committee.
Sections 9-10: Licensing: only approved entities may act
Anyone wishing to run an escrow business needs a license issued by the Minister of Finance on the Committee's recommendation. Only financial institutions or other juristic persons specified by Ministerial Regulation qualify, and they may face extra capital, security or financial-soundness requirements. Lawyers, brokers and developers cannot hold escrow funds unless separately licensed.
Section 12: Conflict of interest barred
An escrow agent that has a direct or indirect interest in one of the contracting parties is forbidden from acting as escrow for that party. This keeps the agent genuinely neutral, so a developer's affiliated company, for example, cannot serve as the supposedly independent escrow holder for that developer's own buyers.
Section 14: Segregation of clients' assets
The agent must keep each party's money and property strictly separate from its own, maintaining a distinct inventory for every party as well as for itself, in line with Committee rules. This bookkeeping separation is the foundation that later allows escrow funds to be ring-fenced if the agent runs into financial trouble.
Section 17: Deposit of money and land-office freeze
Once appointed, the agent opens the escrow account and deposits the buyer's money within one business day, issuing the buyer a receipt that counts as proof of payment and notifying the seller. For immovable property with a title document, the agent informs the Land Office, which records the escrow, and registration of transfer is blocked until the parties give written notice.
Section 19: Release on full performance and transfer
When both sides have fully met the escrow contract's terms, the agent transfers the money together with any accrued interest to the party who must deliver the property, and arranges the transfer or delivery of the property or title documents to the party who paid. If one side refuses to perform, the dispute rules in Section 23 apply instead.
Section 22: Refund to buyer on rescission
If the escrow contract is cancelled, the agent must return the money plus any interest from the escrow account to the entitled party as the contract specifies, typically refunding the buyer who paid, or paying the seller in the cases the contract sets out. The Committee fixes the time limit within which this payout must be carried out.
Section 23: Freeze of funds during a dispute
Unless the escrow contract says otherwise, if the parties disagree about their rights and duties, the agent is forbidden from releasing the money or property to either side until the parties reach an agreement or a court issues a final judgment. This protects both buyer and seller from a premature, one-sided payout while a conflict is unresolved.
Section 25: Escrow assets protected from agent's bankruptcy
If the agent is placed under court custody, goes bankrupt or is ordered to stop business, the escrow money and property are protected: they cannot be seized, attached or distributed to the agent's creditors. The Official Receiver and Committee separate these assets and either refund the parties or transfer live contracts to a replacement agent.
Section 16: Closing the business and handing over contracts
An agent wishing to stop operating must apply to the Minister at least sixty days in advance and show it has notified all parties, arranged to transfer still-binding escrow contracts to another licensed agent, and returned escrow money or property to the parties where transfer is impossible or they want to cancel. The license is then surrendered.
Sections 26-28: Escrow Regulation Committee and oversight
An Escrow Regulation Committee oversees the system, with the Fiscal Policy Office acting as its secretariat. The Committee sets operating rules and fee rates, recommends licenses, monitors agents and can demand reports and documents. Competent officials may inspect agents to enforce compliance, giving the regime ongoing state supervision rather than a one-off licensing check.
Sections 44-48: Penalties for unlicensed or non-compliant operators
Running an escrow business without a license, or wrongly using the title escrow agent, carries fines and, for unlicensed operation, possible imprisonment. Agents that breach termination or other duties face administrative fines, and responsible directors, managers or staff of a juristic person can be held personally liable for the company's offences.