Escrow & deposits

In many countries, deposit money for a property purchase sits with a regulated third party — a solicitor’s client account, a title company, a statutory escrow scheme — until specific conditions are met. In Thailand, that kind of formal, government-mandated protection is not universal across the market, which means the protection you actually get depends heavily on how your specific contract and payment arrangement are structured. Understanding this before you pay a first deposit matters more here than in a market where the protection is standardised.

What escrow actually means

An escrow arrangement holds funds with an independent third party — not the seller, developer or their agent — who releases the money only when agreed conditions are met, such as a specific construction milestone being verified, or registration actually completing. Escrow does exist in the Thai market and is used on some transactions, particularly larger or more sophisticated deals, but it is not the default or legally required arrangement for every purchase the way it might be elsewhere. Whether escrow is used on your purchase is generally a matter of what you negotiate into the contract, not something that happens automatically.

Why this matters most for reservation deposits and off-plan instalments

A reservation deposit paid directly to a seller, developer or agent, without any escrow arrangement, is only as safe as that party’s solvency and good faith — if the deal falls through in a way the contract does not clearly address, or if the developer runs into financial difficulty, getting that money back can become a genuine dispute rather than a formality. This risk compounds with off-plan purchases, where staged payments continue over months or years before you receive anything in return — see off-plan risks for the construction-specific risks that sit alongside this payment risk.

Reading a reservation or deposit contract properly

Before paying any deposit, however small it seems, check the contract for:

• Exactly what conditions must be met for the deposit to be refunded, and what conditions cause it to be forfeited.
• Whether the money is held by the seller directly, by an agent, or by any third party — and if a third party, who they are and what obligations they actually have.
• Whether the contract specifies what happens to the deposit if you cannot proceed for reasons outside your control (financing falls through, due diligence reveals a real problem) versus if you simply change your mind.
• Whether there is any interest-bearing arrangement, or whether the money simply sits with the recipient with no accounting for it.

Negotiating for better protection

Buyers are not limited to whatever standard terms a seller or developer offers first. It is reasonable to ask for: a genuine third-party escrow arrangement for larger sums, especially off-plan instalments; payment milestones tied to independently verifiable construction progress rather than the developer’s own say-so; or a lawyer’s client account, rather than the seller’s or agent’s own account, as the temporary holder of funds between signing and registration. Not every seller will agree, and a well-established developer with a strong track record may reasonably resist changing their standard process for one buyer — but asking, and understanding why the answer is no if it is no, is a normal part of the negotiation, not an unreasonable demand.

Lawyer client accounts as a partial solution

Using your own lawyer’s client account as a holding point for funds between signing and registration — rather than paying the seller directly ahead of registration — is one of the more practical ways to add a layer of protection to a resale purchase specifically, since it puts a regulated professional, accountable to you, between your money and the seller until the transaction actually completes. This is worth discussing with your lawyer as a specific request, not assumed to be standard practice on every transaction. See using a lawyer.

What escrow does not solve

Even a well-structured escrow arrangement only protects the money — it does not substitute for due diligence on the title, the developer, or the structure of the deal itself. A buyer can have perfectly protected deposit funds and still end up in a bad purchase if the underlying title or project has problems that were never checked. Treat escrow and deposit protection as one layer of protection alongside due diligence, not a replacement for it — see due diligence & title checks.

If a deposit dispute already exists

If a deposit has already been paid and a dispute has arisen — over a refund, a forfeiture you consider unfair, or a seller or developer who has simply gone quiet — gather every document related to the payment and the contract terms, and get legal advice on your options before taking further action. See property disputes & resolution.

Escrow for resale purchases, not just off-plan

Discussion of escrow tends to focus on off-plan projects, where the sums and the time between payment and delivery are largest, but the same protection is worth considering on a resale purchase too — particularly where the seller is overseas, where there is a chain of related transactions, or where any part of the title or encumbrance position was not fully clean at the point of your due diligence. A lawyer’s client account holding the balance of funds until registration actually completes, rather than releasing everything to the seller in advance, is a lighter-weight version of the same principle, worth raising even on what looks like a straightforward resale deal.