An allocation agreement is a type of contract specific to real estate transactions. This contract outlines the terms under which units in a development are sold to buyers.
Allocation agreements are common in Bangkok for foreign investors and home buyers interested in purchasing property within new developments.
Allocation agreements differ from purchase agreements in their specificity to unit allocation within a development. Purchase agreements typically involve the sale of a single property without reference to a larger development project.
In contrast, allocation agreements define the specific units allocated to each buyer within a development, often before construction is complete.
Three features popular with allocation agreements include unit selection priority, payment plan details, and construction completion guarantees. Unit selection priority allows buyers to choose their preferred unit based on their agreement terms.
Payment plan details outline the schedule and amounts for payments throughout the construction phase. Construction completion guarantees provide assurances that the development will be finished within a specified timeframe.
Common features in allocation agreements encompass dispute resolution mechanisms, governing law clauses, and termination rights. Dispute resolution mechanisms establish procedures for resolving disagreements between parties.
Governing law clauses specify the legal jurisdiction under which the agreement is interpreted. Termination rights define conditions under which either party may cancel the contract.
Unusual features of allocation agreements can include specific customization options for units, early access rights for inspections, and exclusive amenities access. Specific customization options allow buyers to personalize their units during the construction phase.
Early access rights enable buyers to inspect their units during construction. Exclusive amenities access grants buyers special privileges to facilities within the development.
Unique features in allocation agreements might involve developer financing options, first refusal rights on future units, and transferability conditions. Developer financing options offer buyers financing directly from the developer.
First refusal rights on future units give buyers the option to purchase additional units in the development before they are offered to the public. Transferability conditions outline the terms under which the buyer can sell or transfer their unit before project completion.
Comparing allocation agreements to purchase agreements, the former’s unique approach to unit allocation, combined with the variety of specific, common, and unusual features, distinguishes it significantly. Allocation agreements provide a more structured framework for buying property within developments, particularly appealing to foreign investors and home buyers in Bangkok.
For a more detailed understanding of terms used in this context, please refer to our glossary about Bangkok real estate.