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Standard homebuilding contract pushed

By on Jul 31, 2012 in Property News

The Thai Home Constructions Association (THCA) is calling on the Office of the Consumer Protection Board (CPB) to standardise homebuilding contracts.  THCA president Sitiporn Suwannasut said the association and a representative from the Home Builder Association (HBA) recently met the CPB to discuss a draft of a standardised homebuilding contract.

Details will include the start of construction, for which the THCA agreed to use the contract signing date, which its members now use. However, the HBA representative disagreed, saying the business practices of his agency’s members are different.  For construction delays, the THCA suggested setting a suitable fine in line with opportunity loss and fairness to consumers.

The HBA’s standard contract stipulates a fine amounting to 0.05% of the unpaid balance on a daily basis, while the THCA’s standard contract sets the fine at 0.01% of the entire construction amount or a minimum of 400 baht a day.

Mr Sitiporn gave the example of a unit priced at 2 million baht.  If 5% or 100,000 baht remained unpaid, then the HBA’s fine at 0.05% of the unpaid price would be only 50 baht a day or about 1,500 baht a month.  However, if the fine is 0.01% of the total construction price, then it would be 200 baht a day or about 6,000 baht a month. But if the THCA’s minimum of 400 baht a day is levied, then the amount would be about 12,000 baht a month, which is more reasonable, said Mr Sitiporn.

For the full article, please visit http://www.bangkokpost.com/business/economics/305128/standard-homebuilding-contract-pushed

Source : Bangkok Post 31 July 2012

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