Deducting what the other side owes you: set-off in Thai property deals (CCC 341-344)

Can you deduct what a seller, tenant or builder owes you from what you owe them? Often yes: under CCC Sections 341-344, where two persons owe each other obligations of the same kind and both are due, either may discharge their debt by set-off up to the matching amount, unless the nature of an obligation excludes it.

How set-off works

• Section 341 — conditions. Same kind of obligation (typically money), both due, and not excluded by their nature. Parties may agree otherwise, but such an agreement cannot be used against a good-faith third party.
• Section 342 — by declaration. Set-off is made by a declaration from one party to the other. It cannot carry a condition or start/end date, and it takes effect retroactively to when the two debts could first have been set off.
• Section 343 — different places. Differing places of payment do not block set-off, but the party relying on it compensates the other for resulting loss.
• Section 344 — defences and limitation. A claim subject to a defence cannot be set off. A claim that became time-barred can still be used if it was not yet barred when it could first be set off.

Where it matters on Phangan

• Rent vs deposit or repair costs — a landlord or tenant can net amounts, but a disputed claim may not qualify; see landlord and tenant duties.
• Penalties and late interest — netting a penalty against a price balance depends on the penalty being due; see penalty clauses.
• Builder payments — withholding for defects is a separate statutory right; see builder defects liability.
• Deposits — earnest money has its own rules; see earnest money.

Takeaway: set-off is a unilateral, unconditional written declaration, so send a clear notice stating the debts and amounts. Do not simply short-pay on a disputed figure, because that can itself be a default. The section texts are unverified English translations, so confirm with a Thai lawyer.