|
Top Thai law firm urges property due diligence after 4 million baht loss
A landmark court case involving an unlawfully revoked
ownership certificate could be cold comfort to an investor who is currently 4
million baht out of pocket, prompting BSA Law, a top Thai law firm, to urge due
diligence on all property purchases.
The case involved a condominium development in Hua Hin, where on the
construction plans an area was marked as an elevator maintenance area, while on
the condo registration papers it was marked as a unit. It was sold as a unit,
and subsequently sold-on twice. The current owner paid 4 million baht for it.
Thailand’s Supreme Court recently revoked the ownership certificate, determining
that it was unlawfully issued. This paves the way for a civil suit looking for
compensation of the purchase price to the investor by the Land Department.
Chaiyos Hemarajata is a special adviser at BSA Law, and cautions investors that
due diligence is the only way to ensure that you are not exposing yourself to an
enormous financial loss. “Despite the fact that the investor won the case, it
may be several years before she sees her money back. If the person at fault had
been a private company, the investor might never be recompensed,” said
Hemarajata.
“Conducting due diligence is the only way to ensure that you are not exposing
yourself to a huge loss. A simple site visit would have cleared up this anomaly
in the plans”, he continued.
Thai law may have set a precedent in favor of the investor in this case, but in
other circumstances and disputes the result may differ, especially if due
diligence processes are not conducted, advises the BSA Law’s team. (Source
BSA Press Release)
Pattaya Home & Décor 2009
Representatives of all the exhibitors join in for a
group photo.
Vimolrat Singnikorn
The Pattaya Home & Décor 2009 exhibition, organized by the Iguana Company, is
currently being held on the 1st floor of Central Festival Pattaya Beach until
March 17. This exhibition has drawn participation from real estate, housing and
condos companies and home décor entrepreneurs. Each booth is occupied with well
trained sales staff to assist interested parties and advise potential customers
of the various discounts and promotions that each project has to offer.
A total of 16 companies are taking part in the exposition including Iguana: Hyde
Park, Sunset Boulevard Residence, Park lane, Euro Design Furniture, SP Village:
The Urban, SP Town Home, SP 5, Beach Properties, Pool Villa, Baan KoonSuk, De
Blue Condominium, Mid Town Villa, St. Andrew Village, Ngamcharoen Village, The
Ocean Pearl, Baan Chalita, APUS Condominium, Nova Group: The Avenue Residence
and Siam Oriental Village.
 Various
booths are on display at the Pattaya Home & Décor 2009 until March 17.
Managing Director Miki Haim and Thida Changpradub from Iguana Co., Ltd. spared
some time out from their schedule to provide us with some insights into the
objectives of the exhibition, one of the main ones being to create trust for the
Pattaya real estate market in the minds of tourist and foreigners.
Miki also explains that, “Iguana decided to put this exhibition together to
coincide with the opening of the Central Beach shopping center. However, as it
was seen to be such a good opportunity, and we did not want to bear the cost
alone, we invited other companies to join.”
The exhibitors have properties covering all areas including Pratumnak, Naklua,
Wongamat, Banglaumng and Bang Saray, and offering a wide range of prices from 1
million baht to 20 million baht. One can even get something for less than that -
about 800,000- depending on the customer’s choices.
Even in a difficult market Iguana is confident that its properties will still
attract customers. The key issue is to instill confidence in the potential buyer
that the construction will proceed as planned. Iguana has already sold 365 rooms
in Park Lane and the skeleton of the building has already been constructed. When
customers see the 4 floors that have already been built they feel confident in
their investment - claims Miki.
Iguana believes that all the projects here in the expo are able to deliver their
promises to the customers. He also hopes that local developers can collaborate
in future exhibitions and make this a regular event.
Who can buy a condominium in Thailand, How does it work? How to transfer the funds?
There are three legal acts relevant to the purchase of a condominium unit by an
alien, being the Condominium Act B.E. 2522 (or 1979, the Condominium Act (No.
2), B.E. 2534 (or 1991) and the Condominium Act (N. 3) B.E. 2542 (or 1999)
issued on 28th April, 1999.
Until recently, foreigners could only own forty percent (40%) of the aggregate
unit space. This has been amended to 49% of the aggregate unit space although
the ministerial regulations governing this change have not yet been issued. The
new Act allows that aliens or alien juristic persons (majority foreign-owned
companies) can own up to 100% of the aggregate unit space registered in a
condominium up to 27th April 2004. The total development area in that case must
be under 5 rai (8000 m2) and located in Bangkok, all municipal districts and
“such other areas as shall hereafter be announced by the Minister of the
Interior to be foreign owned, provided always (this is unchanged) that the funds
for the purchase have been remitted from abroad”.
Who can own a condominium?
Basically any foreigner who can enter Thailand legally can buy a
condominium.
Currency:
Basically any negotiable foreign currency can be used to purchase a
condominium. The foreign currency MUST be transferred into Thailand as foreign
currency and exchanged by the handling bank in Thai baht.
Documents needed when buying
a condominium:
For foreigners to be eligible to purchase a condominium in Thailand
they must present proof to the Land Department that the funds have been remitted
from overseas in foreign currency. Without such proof the Land Department will
not permit the transfer of ownership to the foreign buyer.
1. Remittances must be sent in exactly (“to the letter”) the same name as that
on the purchase contract, i.e. if Tom Smith is the purchaser then the name Tom
Smith must appear on the remittance advice. T. Smith or Smith Enterprises are
unacceptable.
2. Transfers of funds MUST be made in foreign currency only and NOT in Thai
baht, i.e. if you are working in US dollars then remit in US dollars. Do not
remit in Thai baht.
3. Amounts transferred must be more than $5,000 in order to obtain a Thor Tor 3
form. (The bank will NOT Issue a Thor Tor 3 form for amounts less than $5,000.)
This may mean you will have to agree to a modified installment schedule so that
all amounts remitted are more than $5,000.
4. The purpose of the remittance MUST be stated on the remittance advice. This
should be “For the purchase of a condominium”. The Bank of Thailand’s code for
this is 5.22.
A condominium title (first established under the condominium act of 1979) is a
title to a part of a building or buildings with multiple owners, and a
fractional interest in the land (always a Chanot) and other common assets (such
as a swimming pool) and common parts of the building (such as the stair well or
lobby). The title will state the floor area of the private apartment, the ground
area of the common land and the percentage interest which that apartment has in
the common property. This percentage also represents the value of the voting
interest in the condominium company or owners’ association.
Buildings “other than condominiums” do not have any form of title document, but
their sale or long lease can be registered at the Amphur (district) land office.
Proof of ownership, must be established either from proof of construction or
document showing previous sale-purchase (not to be confused with the House
Registration document, which is only a register of the house’s occupants).
Transfer of a building as distinct from its land requires the posting of 30 days
public notice (to see if anyone wishes to contest the ownership).
Foreign nationals (aliens) may own a building (as distinct from its land) and
may register such transfer of ownership into their names at the local district
office.
For more information contact your local legal representative. (Source PRLog
Press Release)
|
