Sunday, November 25, 2012

What You need to know about buying condo in Thailand

Bangkok Post: Property Focus - 30Oct 2012

What You need to know about buying condo in Thailand
In the Bangkok, Phuket property Market, Condominiums are becoming more popular, especially after last year flooding. Before buying condominium there are several issues to consider, some specific either to Thai or Foreigner buyers, some common to both.

Under the Thai Condominium Act, the owners of each condominium unit own that unit as their personal property, and also jointly own (along with the other owners of units in that development) the common property of the condominium development. This joint ownership is in proportion to the ratio between the area of each condominium unit and the total area of all units in the development the common property includes the land, where the development is located, structures for stability and prevention of damage, the buildings and parts thereof, and equipment provided for mutual usage or benefit.

Trading area
Many modern condominium developments have areas in which entrepreneurs can trade, although this trading may disturb residents (the joint owners or renting tenants) According to the Act, trading is prohibited in condominium developments, except in designated areas.
If trading is allowed, access to these areas must be designed so as to prevent disturbance to residents.

Each condominium must have a condominium juristic person registered with the Land office. The joint owners appoint a juristic person committee to control the condominium juristic person to manage and maintain the common property for their collective benefit, expenses, taxes and duties.
The joint owners are jointly liable to pay.
1 Expenses arising from common services and maintenance of the common property.
2 Taxes and duties corresponding to the proportion of their ownership of the common property. If the joint owners fail to pay, problems will occur should they wish to resister the sale or transfer of their condominium unit, as the land office will not proceed with the registration unless the unit is free from liabilities.

Agreements to sale and purchase condominium units must be in the form prescribed by the notification of the ministry of interior issued under the Act. The major terms and conditions that must be contained in such agreements include the details of the unit, the agreed purchase price and payment process and payment and interest, termination of the agreement, and liability for damage caused by defects, If the agreement is not as prescribed, the seller could be liable for fines not exceeding 100,000 baht.
Further the consumer Protection Act, applies to agreements to sale and purchase condominium. As the developer of the condominiums is a business area subject to contract controls. Unfair terms and conditions, including waivers or limitations of the seller’s liability for defects, are also prohibited.

Advertisements, in any form, for the sale of condominium units, including statements, pictures, letters in inducing the purchase of condominiums and brochures are deemed incorporated in any subsequent agreement to sell and purchase. Should a dispute subsequently occur, these documents can be used as evidence, for example to determine whether the condominium units have been constructed in accordance with the advertisements.

Restrictions on Foreigner ownership
In principle, foreigners who are qualified individuals or legal entities can own condominium units under the Act, subject to foreign ownership not exceeding 49% of the total area of all units in the development.
An individual foreigner is qualified to own a condominium unit, if such foreigner.
1          has permission to have a residence in Thailand; or
2          has permission to enter Thailand for the promotion of investment; or
3          has (i) brought foreign currency into Thailand, or (ii) withdrawn money from the Thai baht account of a person  residing outside of Thailand, or (iii) withdrawn money from a foreign currency account. In certain circumstance, individual foreigners are required to dispose of their condominium units within one year, including where (i) foreign ownership in the development as a whole reaches the 49% limit; (ii) residence permit is revoked; (iii) exile is imposed; (iv) the unit is inherited by an unqualified foreigner.
Where foreign ownership in a development does not reach the 49% limit, the land office has determined that, if the deceased qualified under section 3 above, an heir would qualify as successor to the deceased owner’s assets, and would not be required to dispose of the condominium unit. Please note that where the deceased qualified under sections 1 or 2 an heir must also qualify under the same section(s); otherwise, the heir must dispose of the condominium unit with one year.

The Need for Caution:
Although there are very attractive offers available from sellers of condominiums, buyers should exercise caution and properly and thoroughly investigate the property to ensure that nothing has been concealed and that the property and transaction fully comply with all requirement.

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