False Advertising of Real Estate Developers
“Fiction is More Salable than Truth”
By Ponthep Werachon

In Pattaya where many pagans who worship money in stead of god can easily make fortune from their euphemism. The soft target is always foreign property buyers who are gullible by their ignorance.

Only wisdom can lead you to the road of justice not perdition. Even a truth is stranger than a fiction. But only the truth will set you free from any dilemmas.

This is one of a true story we will share with you about a buyer of a commercial building who sued a big development company to return money on the ground that the development company did not keep the promise in the advertising brochure. The development company refused to return money with the pretext that the promise was not mentioned in the contract. The buyer sought justice from the court. The legal battle was in the two lower courts and finally appealed to the Supreme Court.

The Supreme Court made a judgment with the reference case no. 1861/1980 with the following excerpt :-

The fact was concluded that before a buyer and developer entered into a contract to buy a piece of land and building. The developer advertised in a brochure that “It’s a golden opportunity for investors to buy land and house in this project because the location of the project is in a central area with a bus terminal and commercial complex consisting of hotel, cinema and fresh market which is expected to be finished within one year”.

The contract entered with the developer was attached with the plan of the commercial complex. After the buyer made some installments, the developer still ignored to start the construction of the cinema, hotel and fresh market. The buyer decided to stop the installment payment and retained a lawyer to notify the developer to terminate the contract and demanded the developer to return money. The developer refused to return.

It was specified in the contract that “The Buyer and the Developer mutually agree to buy and sell a building with a piece of land which is a part of the land title deed where the project is located according to the plan attached hereto which is in the area of the commercial complex”. However, the information advertised in the brochure was not mentioned in the contract.

The questions of law to be deliberated by the Supreme Court were:-

1)     Who breached the contract”
2)     Would the developer have to return money to the buyer”
3)     Could the buyer raise the claim based upon the information advertised in the brochure”

The Supreme Court adjudicated that even the information advertised in the brochure was not mentioned in the contract. But if we had a look in the plan which was attached and deemed an integral part of the contract, it was ascertained that the plan of the commercial complex the developer promised to build up showing the location of a commercial bank, bus terminal, hotel, cinema, fresh market and commercial building with the piece of land where the buyer agreed to buy. It was also mentioned in the contract with details of the commercial complex and period of time to be completely finished.

The buyer could raise the information advertised in the brochure upon the time the buyer signed the contract with the developer which was the explanation of the contents in the written contract neither the addition nor amendment nor deletion of the contents in the contract which are prohibited by Section 94.- of the Civil Procedure Code of Thailand.

The developer was obliged to build up the bus terminal, hotel, cinema and fresh market in the commercial complex within one year even though the buyer did not remind the developer to act accordingly.

As long as the developer had not fulfilled the obligation to completely finish the construction of the commercial complex within the specified period of time, the developer was in breach of contract. Therefore, the buyer was not obliged to continue the installment payment in accordance with Section 69.- of the Civil and Commercial Code of Thailand. In addition, the Buyer was entitled to termination of the contract in accordance with Section 387.- of the Civil and Commercial Code of Thailand.

If it was ascertained that the buyer had already exercised the rights to terminate the contract, the developer was obliged to return money to the buyer in accordance with Section 391 of the Civil and Commercial Code of Thailand”.

You may have the knowledge from this judgment that once you sign a contract to buy a house or condominium in Pattaya, please keep all brochures which depict all details as if the project is in the heaven. In this case, the buyer may also sue the development company for the penalty and compensation for damage.

Before making a decision to buy a house in any project, you should always think if everything your hear “Is too good to be true”