Escrow is a jargon in real estate language. It is defined as an impartial holding of documents or funds related to the sale and transfer of the property. In a wider context, it is taken as a temporary pass through an account held by a third party during the process of a transaction between two parties.
An escrow also offers protection for both parties involved in the transaction i.e. the buyer and the seller. The account holding the money acts as a safeguard just in the case if anything goes wrong during the transaction.
Thailand has been reluctant to adopt this system but starting from 2001, the Kingdom has officially allowed the commercial banks to provide escrow account services to customers who have entered into a sale and purchase agreement with a developer. With the laws implemented officially, the developers and sellers were able to make a reasonable agreement beneficial to both parties, while taking advantage of an escrow account. Before the laws were implemented, the developers were dependent on 10% to 20% deposits to finance the construction.
In 2007, after six long years, the government of Thailand officially introduced a first draft of the escrow law. From that moment onwards, all developments were required to oblige to the new rules, even if it meant putting more pressure on the developers’ financial management. As a result of the escrow law, home buyers were offered protection from losing money on deposits in the case of the developers becoming unable to complete and transfer the property to them.
The introduction and implementation of the escrow laws and the escrow amount can be seen as a beneficial addition to the legal system of a country like Thailand. The country is developing fast and this type of laws was much needed to support the economy. The confidence of home buyers increased significantly as the legal protection was in place to protect their rights. An escrow account is also termed as the win-win situation for both the parties involved in the home buying process.
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If you are looking to get help with the escrow account and the escrow amount, Sunbelt Asia Legal Advisors can be your best partners. We are a law firm in Thailand comprising of highly skilled legal and accounting experts. Our team can work closely with you in all the aspects and make sure that all your queries are addressed and the needs are met. If you have some questions or queries regarding escrow account in Thailand or want to book a free consultation with us, contact us now at (+66) 02-662-7004. Sunbelt Asia Legal Advisors can provide you with all the knowledge and the benefits of such type of account.