A property reservation agreement in Phuket is often the first formal document in the buying process. It temporarily removes a villa or condominium from the market, outlines key terms, and secures the buyer’s initial deposit while due diligence takes place.

Understanding exactly what is written into a Phuket property reservation agreement is essential. The terms protect both parties, but without careful review, they can also expose buyers to risks. This guide explains how these agreements work, what to check before signing, and the safeguards overseas and local buyers should be aware of.

What Is a Phuket Property Reservation Agreement?

A reservation agreement is a short legal document used to “reserve” a property for a fixed period of time. It serves as a signal of intent from the buyer while the seller agrees not to market the property to others.

Key Terms in a Phuket Property Reservation Agreement

  • Property details – address, project name, or unit number.

  • Purchase price – the agreed amount at the time of reservation.

  • Reservation fee/deposit – usually between 2-5% of the property value.

  • Reservation period – how long the property will be held (commonly 30 days).

  • Conditions for refund – when and how the deposit is returned if the purchase does not proceed.

Deposit and Refund Policies

The reservation deposit is normally deductible from the final purchase price. Refund conditions vary:

  • If the property fails due diligence checks, deposits should be refunded in full.

  • If the buyer withdraws without valid reason, the deposit may be forfeited.

Steps to Review a Reservation Agreement Carefully

The reservation agreement is often signed quickly, but it should never be treated lightly.

Identifying Hidden Clauses

Clauses may limit refund conditions or commit the buyer prematurely. Watch for wording that restricts due diligence rights or imposes penalties without clear justification.

Working With Legal Professionals

Independent legal review ensures the document matches Thai law and industry norms. Lawyers can request amendments, insert refund clauses, and protect against one-sided terms.

Common Risks in Phuket Property Reservation Agreements

Non-Refundable Deposits Without Clear Conditions

Some agreements state deposits are “non-refundable” regardless of outcome. Buyers should insist on conditions that allow repayment if legal or financial checks reveal problems.

Misleading Terms by Developers or Agents

Overseas buyers in particular must be careful with marketing promises. A reservation agreement should reflect only the property’s legal status, not verbal assurances or sales claims.

Recent notification by the Office of the Consumer Protection Board (OCPB) requires that reservation agreements for condominium units follow contract-controlled business standards, including clearer clauses for refund rights and termination conditions.

Practical Tips for Overseas Buyers

Many investors sign reservation agreements from abroad before arriving in Phuket. This is possible, but requires additional safeguards.

  • Use Power of Attorney – appoint a trusted representative to sign on your behalf if you cannot attend in person.

  • Request dual language contracts – English and Thai versions should match exactly.

  • Keep digital and physical copies – ensure you retain signed copies for reference.

  • Transfer funds correctly – deposits should be sent through proper channels with documentation to avoid future ownership disputes.

Summary: Phuket Property Reservation Agreement Guidelines

A reservation agreement is a useful tool for securing a property in Phuket, but only if reviewed carefully. It outlines price, payment terms, and reservation period, but also dictates when deposits are refundable.

To stay protected:

  • Review all clauses before signing

  • Ensure refund conditions are clearly stated

  • Always seek independent legal advice

  • Retain all signed copies

  • Never rely solely on verbal promises

Handled correctly, a reservation agreement provides security and time for due diligence. Handled carelessly, it can lead to unnecessary losses.

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