Buyer reneging on sales agreement

[pancakeman]

My Thai wife owns a townhouse and was selling it.  A (Thai) buyer came along and said they needed 3 months to get the money together, but put down a 10% holding deposit, and signed a contract to buy (standard looking Thai property sales agreement).

 

So the property was taken off the market and deposit was put into my wife's bank account (plus sales agent took some of their commission).

 

Now 3 months on they buyer says they don't have the money "yet", and they want a 6 month extension to the agreement; and if we don't agree to the extension then they want their deposit back.

 

The contract clearly says that if the buyer does not complete the purchase before a certain date then the deposit is forfeit...I don't see why the deposit would be given back; this is the whole point of the contract and the deposit.

 

However according to the real estate agencies "lawyer", the buyer will probably take it to court (or police??) and because "It's a lot of money" and it "doesn't seem fair", because "what did we lose" then the judge would just ignore the contract and order the money given back (so some other weird agreement like give back some of the money).

 

My natural instinct would be that the lawyer is full of sh*t; but I have seen the bizarre nature of Thai legal disputes before...and it wouldn't surprise me that much if the situation did play out like that.

 

Opinions?

[ctxa]

PERSONAL ADVICE:

 

Morally I would give it back, sometimes sh*t happens in life plus the fact he signed a contract and paid a 10% deposit, clearly shows he wasn't playing around. But again, sometimes unexpected things happen in life. You could perhaps negotiate with him some sort of compensation for those 3 lost months in which you couldn't sell your property. 10% of the value of the house seems rather excessive for just 3 months (in which as the lawyer said, you didn't lose much). 

 

Now again, not returning the deposit is exactly what he signed and agreed upon at the time, but IMO sometimes being understanding and working towards a solution which makes both parties happy is way nicer in the end.

 

IMPARTIAL ADVICE:

 

In Western countries you would be just fine not giving it back as it is what he signed and should be upheld. In Thailand... as your lawyer suggested a judge might order it back. I've witnessed several (work disputes related) court cases in Thailand and found out that judges tend to enforce what they think is right, even if this conflicts with what an employee had signed on the labor contract!

 

What will happen if you don't give it back and the buyer takes it to court, nobody can guarantee! Perhaps the judge honors the contract, perhaps he disregards the contract! Both possibilities exist!

Edited December 14, 2020 by ctxa

[blackcab]

If 1. The contract states the deposit is forfeited for non performance, and 2. The contract was executed correctly, and 3. The buyer did not perform, then it's very simple:

 

The deposit is forfeited.

 

There is nothing to argue, and if the buyer wants to pay to take you to Court then let them do so.

 

Re-list the property and move on.

[richard_smith237]

There is absolutely no reason for you to return the deposit now. You have a contract and you have lost critical advertising time. 

 

The simple solution would be to agree to the 6 month extension but with new terms.

- Keep the deposit and re-advertise the property. 

- Cut the agent off and deal directly with the buyer. 

 

IF you sell the property to someone else, you can return the deposit and you are not at a financial loss.

IF you have not sold the house, you still have someone ‘who says’ they will buy it in 6 months, again you haven’t lost anything. 

 

This also has the benefit of applying slightly more pressure for the buyer to secure the payment in a more timely manner - if they still really want the property and isn’t just messing your wife around. 

 

Regarding the property agent: They have failed in their part to secure a sale according to the terms and conditions of the contract they put together. Their threat is empty. They have lost any good will with you. 

 

 

 

 

 

Edited December 14, 2020 by richard_smith237

[Brick Top]

I had a very similar scenario , a buyer put down a 320,000 (10%) deposit on my place. He failed to find the money to complete the purchase within 30 days as written in the contract. He had employed a very professional and expensive lawyer to do the legal work for the sale. His lawyer phoned me up and informed me that her client could not complete the sale as he could not arrange a bank loan. His lawyer then told me I can keep her client's deposit as he had defaulted on the contract. 

 

Edited December 17, 2020 by Brick Top
Spelling mistake

[richard_smith237]

1 hour ago, Brick Top said:

I had a very similar scenario , a buyer put down a 320,000 (10%) deposit on my place. He failed to find the money to complete the purchase within 30 days as written in the contract. He had employed a very professional and expensive lawyer to do the legal work for the sale. His lawyer phoned me up and informed me that her client could not complete the sale as he could not arrange a bank loan. His lawyer then told me I can keep her client's deposit as he had defaulted on the contract. 

 

 

When my Wife and I saw a house we liked and had decided to take it we were asked for a 100,000 Baht deposit. 

Upon reading the ‘deposit contract' there was nothing which stated the deposit would be returned if we couldn’t arrange a Mortgage, I thus refused to pay the deposit until the deposit terms were amended. 

 

There was no way I was prepared to loose 100,000 baht baht because the two banks associated with the project refused to give my Wife and I a mortgage. 

 

Thus: Anyone paying a deposit - be careful with the terms. 

 

We are now living in that house BTW - so getting the deposit returned etc was never an issue, but I still didn’t like the idea of money potentially being lost due to a decision which is out of my hands. 

 

 

------

 

In this case the solution is simple. Keep the deposit and give the buyer another 6 months. Re-advertise the property anyway. 

 

 

[Lacessit]

It's a variation of the original contract. IMO the threat of legal action depends on how much clout the buyer has, worth checking out.

I'd suggest making a new contract, one that gives the buyer the extra time. The new contract specifies the seller is at liberty to re-advertise the property for sale. If it is sold to someone else, the deposit will be refunded. OTOH, if the first buyer cannot come up with the balance, the deposit is forfeit.

I'd also be firing the sales agent, he/she is clearly not representing the OP.

[natway09]

Relist the property, if get a firm offer, give the old buyer 72 hours to complete the sale,

[ronaldo0]

Any way of selling the property like this or over 2/3 years I would set up a monthly charge for late payment and if payment wasn't made by 3-6 months in full of the terms I would have put in the contract all money would be forfeited even if they had paid me 2/3 of the property value . 

[ncc1701d]

1 hour ago, richard_smith237 said:

 

When my Wife and I saw a house we liked and had decided to take it we were asked for a 100,000 Baht deposit. 

Upon reading the ‘deposit contract' there was nothing which stated the deposit would be returned if we couldn’t arrange a Mortgage, I thus refused to pay the deposit until the deposit terms were amended. 

 

There was no way I was prepared to loose 100,000 baht baht because the two banks associated with the project refused to give my Wife and I a mortgage. 

 

Thus: Anyone paying a deposit - be careful with the terms. 

 

We are now living in that house BTW - so getting the deposit returned etc was never an issue, but I still didn’t like the idea of money potentially being lost due to a decision which is out of my hands. 

 

 

------

 

In this case the solution is simple. Keep the deposit and give the buyer another 6 months. Re-advertise the property anyway. 

 

 

I am unfamiliar with getting bank mortgages in Thailand. Do they organise pre-approvals up to a certain amount subject to bank evaluation of property?

[PaoloR]

I had a similar situation but was on the other side of the equation.

I put a 250,000 deposit on a property in the process of being built but requested (and had put into the contract) that the seller would make some significant changes to the property before purchase.

The seller did not make these changes in reasonable time and when pushed by my lawyer said that he had decided not to make them and I would have to buy the property as is. I pulled out of the contract and requested my deposit back - he refused and kept the money.

I proceeded to take him to court, not in great hope of getting my money back, more as a matter of principle.

The trial process was going to be long and to cost me but my lawyer applied to the court for an arbitration hearing which is non binding but gives both parties a clear indication of where they would stand if the case were to go to full court.

The judge at this hearing said that builder had clearly breached his contract and should pay me. The builder said no. The Judge pointed out that he would add a file to the papers recommending that the builder pay in full plus my costs should the case be pursued.

A huddle ensued between my lawyer, the builder and the Judge and my lawyer came back to me with a cheque for 200K. The judge having allowed the builder 50K to compensate him for having the property off the market for 6 months and in the words of my lawyer " to save face for all parties"

I considered this a win as the non-urgent legal case would, as my lawyer admitted, have taken years to settle and the arbitration is not binding only a recommendation.

Legal systems vary in each Province - my case was in Krabi. Suggest you see if you can apply for an arbitration hearing (Sorry it was a long time ago and I have forgotten the Thai terminology for this type of hearing.

Good luck

[madmen]

On 12/15/2020 at 4:37 AM, ctxa said:

PERSONAL ADVICE:

 

Morally I would give it back, sometimes sh*t happens in life plus the fact he signed a contract and paid a 10% deposit, clearly shows he wasn't playing around. But again, sometimes unexpected things happen in life. You could perhaps negotiate with him some sort of compensation for those 3 lost months in which you couldn't sell your property. 10% of the value of the house seems rather excessive for just 3 months (in which as the lawyer said, you didn't lose much). 

 

Now again, not returning the deposit is exactly what he signed and agreed upon at the time, but IMO sometimes being understanding and working towards a solution which makes both parties happy is way nicer in the end.

 

IMPARTIAL ADVICE:

 

In Western countries you would be just fine not giving it back as it is what he signed and should be upheld. In Thailand... as your lawyer suggested a judge might order it back. I've witnessed several (work disputes related) court cases in Thailand and found out that judges tend to enforce what they think is right, even if this conflicts with what an employee had signed on the labor contract!

 

What will happen if you don't give it back and the buyer takes it to court, nobody can guarantee! Perhaps the judge honors the contract, perhaps he disregards the contract! Both possibilities exist!

Thais don't care about what's morally correct. If tables were turned OP wife would kiss deposit goodbye! 

[Regyai]

2 hours ago, ncc1701d said:

I am unfamiliar with getting bank mortgages in Thailand. Do they organise pre-approvals up to a certain amount subject to bank evaluation of property?

No

 

In fact in my experience its a lottery as to the amount they will extend, which chops and changes as the different hierarchies interject

[Elkski]

Give the guy a wai and a smile  and take that money and no chance he can buy it. Teach them how real business deals are done in 2020.

[ctxa]

4 hours ago, madmen said:

Thais don't care about what's morally correct. If tables were turned OP wife would kiss deposit goodbye! 

 

Leave nationality alone mate, it seems people in this forum are obsessed with criticizing Thais! 

 

Yes, if tables were turned OP wife would kiss deposit goodbye! But not only in Thailand, anywhere else in the world for that matter! 

 

Still, it doesn't hurt to do good from time to time, specially when you don't have much to lose. And who knows, perhaps in the future you run across someone who is equally good as you were! ????

[KKr]

A silly contract to sign.
from the contracts I have seen over the years, usually deposit is returned in case the Buyer cannot organise finance within x period of time.
If finance was offered and buyer refuses to execute contract he forfeits deposit.
In case Seller decides to sell to a third party, Seller returns twice the amount of the deposit.

A fair arrangement, both parties have clear obligations, and if they renege, they loose the amount of the deposit.

[chuang]

How much money is involved just curious..

[chilly07]

My experience in  Thailand is that no money changes hands until the  Bank has authorised the loan all matters being  dealt with  at the bank with  both parties  present.  That way this  situation  doesn't  arise.