NO&T Asia Legal Review
In the past few years, Thailand has experienced a rather high number of consumer disputes in relation to condominium sales advertisements. This was due to complaints filed by consumers to the Office of Customer Protection Board in relation to the actual conditions of the condominium, which did not match the quality or understanding proposed in the advertisement by real estate developers. To address this, revised regulations have been introduced to govern advertisement of condominium projects both online and offline and business operators must ensure that their advertisement content complies with the relevant regulations.
Previously, the advertising statement of the condominium sales was mainly regulated by the Ministerial Regulations No.3 of 1983, issued pursuant to the Consumer Protection Act of 1979 (the “CPA”)※1. However, the said ministerial regulations did not cover advertising statements which failed to specify the detail of compliance with the Enhancement and Conservation of the National Environmental Quality Act of 1992, i.e., the approval of the Environmental Impact Assessment (EIA) Report.
On 20 December 2021, the Ministerial Regulations prescribing the Advertising Statement of Product or Service Which is Unfair to Consumers or any Statement Which May Produce Adverse Effects on Society at Large of 2021 dated 22 November 2021 (the “Ministerial Regulations on Advertisement”) was published in the government gazette to replace the previous ministerial regulations. Pursuant to the rationale of the Ministerial Regulations on Advertisement’s promulgation, the new regulations were necessary because at present, there are many new technologies for advertisement of goods and services and unfair advertisement would affect public and consumer benefits. The law needs to match with such technological advancement, and ensure that the advertisement statement is appropriate.
Generally, the Ministerial Regulations on Advertisement aim to integrate and combine previous regulations into one comprehensive list. This constitutes the uniform negative list of the advertising statement of product or service, which are unfair to consumers or may produce adverse effects on society at large issued in accordance with Section 22 Paragraph two (5) of the CPA.※2
Under the Ministerial Regulations on Advertisement, the advertising statements of condominium sales can be divided into two categories as follows:
The advertising statement, which does not contain the following statements, will be deemed unfair and may produce adverse effects on society at large:※3
Advertising channels | Required details |
---|---|
Newspaper※4 or print media, electronic media or other similar electronic advertisement media |
|
Broadcast radio | Month and date of construction commencement and expected completion of the condominium. |
Broadcast television |
|
Advertising banner or similar advertising media |
|
The advertising statement, which does not contain the following statements, will be deemed unfair and may produce adverse effects on society:※5
Advertising channels | Required details |
---|---|
Newspaper※6 or print media, electronic media or other similar electronic advertisement media |
|
Broadcast radio | Condominium registration number and name of the condominium-registered person |
Broadcast television |
|
Advertising banner or similar advertising media |
|
Furthermore, the Ministerial Regulations on Advertisement require that the advertising statement must be clearly seen and legible, or the letter size must be more than two millimeters for newspaper advertisement or must be bigger than one- third of the biggest banner letter size or any similar advertisement media, or must contain the information about where customers may request more details on the advertisement.※7
Any person who, in an advertisement, fails to comply with the Ministerial Regulations of Advertisement issued under Section 22 Paragraph two (5) of the CPA, shall be liable to imprisonment for a term not exceeding three months or to a fine not exceeding sixty thousand Baht, or both.※8
Moreover, in case the perpetrator is a juristic person, if such misconduct of the juristic person arises from the order or act of the director, manager or any responsible person for such juristic person, or in the case that the person has duty to order or act but omit from such order or act, which caused the juristic person to violate, such person shall be liable under the provision of such violation.※9 Therefore, prudent business operator, i.e., seller of condominium, should also verify compliance of advertisement materials used by the project developer. If there are non-compliant advertisements being used, they should be discontinued and corrected to ensure compliance and limit liability under such laws.
Based on the above disclosure of information and advertisement requirements, business operators should ensure that disclosed and advertised information is complete and accurate to prevent non-compliance. Additional information should also be available if consumers wish to obtain further details and supporting documents clarification. The Ministerial Regulations on Advertisement aim to regulate any misleading advertisement information or non-disclosure, which means consumers should be able to enter into the sale and purchase agreement of condominium unit with sufficient information for them to make an informed decision to purchase. Compliance by business operators, who have fully disclosed all the necessary information to consumers, would also benefit the justice system in reducing the log for cases concerning condominium disputes between consumers and real estate developers in the future.
*1
As amended by the Ministerial Regulations No.7 of 1995 issued pursuant to the CPA.
*2
Section 22 Paragraph two (5) of the CPA prescribes that an advertisement shall not contain any statement which is unfair to consumers or any statement which may produce adverse effects on society at large, be it a statement as to origins, conditions, qualities or characteristics of goods or services as well as the delivery, procurement or use of goods or services. Other statements as prescribed in the Ministerial Regulations are deemed to be statements which are unfair to consumers or statements which may produce adverse effects on society at large.
*3
Clause 8 of the Ministerial Regulations on Advertisement.
*4
Newspaper advertisement is not subject to item (h) or (i) or (j) requirement.
*5
Clause 9 of the Ministerial Regulations on Advertisement.
*6
Newspaper advertisement is not subject to item (f) or (g) or (h) requirement.
*7
Clause 11 of the Ministerial Regulations on Advertisement.
*8
Section 48 of the CPA.
*9
Section 59 of the CPA.
This newsletter is given as general information for reference purposes only and therefore does not constitute our firm’s legal advice. Any opinion stated in this newsletter is a personal view of the author(s) and not our firm’s official view. For any specific matter or legal issue, please do not rely on this newsletter but make sure to consult a legal adviser. We would be delighted to answer your questions, if any.
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