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Opinion: Buying and investing in property in Phuket

Legacy Phuket Gazette

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PHUKET: Panuwat Somrit is a Phuket lawyer specializing in property. He has been practicing law for the past six years. He graduated with a Bachelor’s degree in law from Ramkhamhaeng University.

Here he talks about how to buy and invest in property in Phuket.

Buying or investing in property may seem like a straight forward and easy transaction. You simply pay the money, transfer the ownership and that’s it. But it’s not that way in Thailand.

If it were, there wouldn’t be so many issues related to buying property here. Many foreigners face problems after they have already bought property. They have to appear in court to fight cases, which is a huge waste of time and money.

One such recent issue was at Aspasia. In March this year, ten foreign tenants from the Aspasia Phuket Resort, led by Dutch national Jan Cornelis van Zuilekom, complained to Phuket Governor Chamroen Tipayapongtada that he and other tenants had been locked out of their rooms and had their electricity and water cut off.

The tenants wanted the management to provide them with financial reports, but their request was refused. They then stopped paying the maintenance fee, which resulted in their electricity and water being cut off. The management team claimed that the tenants had no right to see the reports according to their contract, which is why they were punished by having their electricity and water cut off. All of this, the company said, was written clearly in the management agreement.

This can be a good lesson for others to exercise caution. There are many similar cases of this nature in Phuket.

The problem with this arrangement is the ignorance of both parties – the buyer and the project owner – about the management plan or management agreement, after buying or investing in the property.

Buyers or investors mostly focus on the buying and selling agreement, but nobody pays much attention to the management plan. Most buyers and investors are unaware of what else that they have to pay, or what terms and conditions apply for when they live in that property after becoming the owner of it.

There are two types of property ‘investment’: leasehold and freehold.

Leasehold is a long term rental that can last up to a maximum of 90 years, but the contract has to be renewed every 30 years. A freehold transaction is when you actually buy the property.

Every property in Thailand falls under Thai law, as well as each private business’s own regulations. Therefore, investors, especially foreigners, have to be careful and study these laws before they decide to buy or lease under a freehold or leasehold agreement.

Most buyers are cautious when deciding how much they have to pay up front and how much they need from the bank. However, it’s what happens afterwards that causes so many problems.

For example, in some cases, owners have the right to vote on how much in maintenance fees they are willing to pay per year. They also have the right to see the financial documents showing the usage of the maintenance fee, as well as to examine how the juristic persons work. This is usually the case in condos.

In other types of property, the project owner or management team has the right to decide on how they will utilize the maintenance fee. They can even set their own price for water and electricity. The tenants or owners have no right to be involved with management. They just have to pay the maintenance fees as required.

So everything depends on the management agreement between the buyer and project owner. As a lawyer, I strongly advise all parties to carefully consider the management agreement before making any buying or investment decisions. This will highlight what you can or can’t do after you have bought, what the management’s responsibilities are, etc. Be careful; read the management agreement thoroughly and do not limit your focus solely on the buying and selling agreement.

— Kongleaphy Keam

 

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Archiving articles from the Phuket Gazette circa 1998 - 2017. View the Phuket Gazette online archive and Digital Gazette PDF Prints.

Opinion

PM takes over Thailand’s vaccine roll out. Public Health Minister found under bus – OPINION

Tim Newton

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OPINION

I went to register my name at a local private hospital in Phuket last Saturday for a place in the Covid vaccine queue. It was at the Bangkok Hospital Phuket. The first response from the reception area after the customary welcoming wai was “do you have insurance?”

I said yes, but that was not relevant to why I was here. I explained that I wanted to put my name on their Covid vaccine register as a former patient and enquire as to when they might expect to get deliveries of a vaccine.

The answer was clear. “I don’t know, nobody knows”. And, as far as we currently understand, that answer was correct.

For foreigners in Thailand, unless they happen to work for companies with “connections” or perhaps a public service that was earmarked in the first roll out of vaccines, the vast majority are doing more damage from scratching their heads at the moment.

We’ve contacted the Provincial Phuket Office in Phuket, and been told the same thing. Or “register at your hospital”.

The Thaiger has published numerous articles about the apparent vacillation of the government in regards to allowing private companies and hospitals to acquire their own stash of vaccines. First they could, then they couldn’t, then it was a “misunderstanding”, and then they could again, about 2 weeks ago.

But not ONE private hospital in Thailand currently has access to its own stocks of an approved Covid 19 vaccine. Not even unapproved vaccines, as far as we can tell. The Thai government are still putting up paperwork and red tape barriers preventing any private solutions to the country’s vaccine roll out.

Now I use the term “roll out” carefully. Because there hasn’t been a lot of rolling. There’s no doubt once the vaccines arrive on site there are plenty of front line doctors and nurses, and local organisers, who can efficiently and diligently administer the doses. That’s happened twice in Phuket and has now resulted in some 70,000 local people vaccinated. It’s happened in other places as well. But there’s certainly been no “military” precision (which you’d think these guys would be good at).

Somewhere between a current shortage of available vaccines, generally, and the Thai government being forced to sign off on any private orders, there has been no movement on the “private vaccine” front.

Dr Suwadee Puntpanich, a director at the Thonburi Hospital Group, told the Thai Enquirer that it’s currently “impossible for the private sector to bring in vaccines due to the government’s inaction”.

“We have sent numerous applications for vaccines to the Ministry of Public Health, to the minister, to the permanent secretary and have received no response”.

Given that the private medical sector would have contacts to negotiate and import drugs from international pharmaceutical companies, you’d think they’d be the government’s first phone call. But no. The government have established their own supply chains, dragging out the process until now we this third wave in Thailand and a vaccine roll out way behind peer nations and most of the rest of the world.

Last night the Thai PM decided to take control of the Kingdom’s vaccine roll out.

The Cabinet yesterday agreed to designate PM Prayut as the chief authority with responsibility for all decisions related to the pandemic. He will have sole responsibility for the country’s Communicable Disease Act, the Immigration Act, National Health Security Act, and the Medical Equipment Act, as well as several others. Critically, he will now be responsible for the procurement and distribution of vaccines, essential to combatting the outbreak in Thailand.

There has been some quite public friction between the PM and his outspoken Public Health Minister Anutin Charnvirakul in recent weeks. This decision to take over the decision making in Thailand’s public health sphere is the equivalent to throwing his Bumjaithai party political partner under the bus.

Last week there was loud calls from opposition parties and social media for the resignation of the public health minister. Everything, from the shortage of hospital beds, the lack of vaccines, the decision to let Songkran go ahead, largely unfettered, and a slow reaction to the current outbreak have all fallen on the desk of Anutin.

The PM’s taking over of decision-making for Thailand’s public health at the moment may be an indication of strong, determined leadership. It’s also risky with Anutin pulling the strings on a rump of MPs that secured the PM his majority in the lower house following the 2019 general election.

A petition hosted on Change.org, demanding the resignation of Public Health Minister Anutin, has surpassed an initial target of 200,000 signatures. The target has now been increased to 300,000. 211,600 signatures have already been collected.

Also, as of this morning, the requests for signed paperwork from Thailand’s private hospital sector have remained unsigned.

 

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Tourism

Thailand’s 3rd wave wreaks havoc on the Tourism Restart Plan – where are we now?

Thaiger

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PHOTO: Empty beaches of Hua Hin - AJ Wood

OPINION by Andrew J Wood

Thailand Ministers ponder the next steps to re-start it’s massive tourism industry, initially set for July 1, 2021 in Phuket. The plan may need to be overhauled as Phuket struggles to immunise the whole island in the wake of the third wave of hotspots. Phuket, prior to the third wave had already secured more than 100,000 doses and planned to receive an additional 930,000 doses by June.

This would be enough for 70% of the population – the target needed to achieve herd immunity. The spike in Covid-19 cases has interrupted this plan, as vaccines must also be allocated to other provinces urgently to help fight the latest outbreaks.

Not deterred, the Tourism and Sports Minister Pipat Ratchakitprakarn said he plans to meet next week with all relevant agencies to discuss the reopening plan, previously set for July this year. Eighteen provinces have now been declared red zones, with a partial lockdown and stay at home order. The alert warning was also raised across the rest of the country to orange, in all the remaining 59 provinces many of which had previously been green and considered safe.

Deciding to ignore expert warnings, the government allowed the Songkran holidays to go ahead, even adding an extra day. However no mass gatherings or water splashing were allowed.

(Songkran is the Thai New Year celebration which typically lasts 3-4 days, leading to a mass exodus of cities like Bangkok).

Last year, due to Covid-19, the holiday was cancelled. As a result of the holiday this year, a few outbreaks in Bangkok allowed the virus to spread widely. The Bangkok outbreaks centred on entertainment places; restaurant-pubs and nightclubs around the Thonglor area, plus a high-society wedding at a new riverside hotel, whose guest list included a number of government Ministers and prominent business leaders.

The Covid virus from these few hotspots were quickly spread throughout the whole country, as people returned to their homes for the holidays. Unfortunately this was a perfect storm for spreading the virus. Up until this point, since the beginning of the pandemic, Thailand had only recorded 28,889 cases and 94 deaths as at April 1, 2021. Eighteen days later this has risen to 43,742 cases and 104 deaths. An increase in cases of 51%.

During my recent visit to Hua Hin, empty beaches were very much in evidence already with the third wave leading to mass cancellations. Some resorts, previously 70-80% occupied, saw domestic arrivals decimated. Already hurting from a lack of international visitors, this latest outbreak was a most unwelcome guest.

The question of re-opening Thailand to Tourism, starting with Phuket, has obviously taken a knock backwards.

“The key determinant is insufficient vaccines, we are concerned about the re-opening timeline. We still need to discuss the vaccine administration plan. If the herd immunity goal cannot be achieved, we may have to consider opening only certain areas in Phuket”.

However, to continue with the same plan, even with restricted zones, will not be easy as long as the country still has increasing new daily infections, said Minister Pipat.

“Most importantly, we still have to hear from other countries that we already started travel bubble negotiations with about their confidence regarding the same timeline.”

Like Hua Hin, hotels in the North reported cancellations of more than 70% with Chiang Mai a cause for concern and currently experiencing increased coronavirus cases. Prior to the pandemic, the province was a popular destination to celebrate Thai New Year.

Regrettably Minister Pipat is in self-quarantine after being in close contact with Transport Minister Saksayam Chidchob, who was diagnosed with Covid-19. The Minster fortunately has already received his first vaccination jab last month (AstraZeneca) and will remain in isolation until next week when all tests are complete (3 swab tests).

ANDREW J WOOD

Andrew J Wood was born in Yorkshire England, he is a professional hotelier, Skalleague and travel writer. Andrew has 48 years of hospitality and travel experience. He is a hotel graduate of Napier University, Edinburgh. Andrew is a past Director of Skål International (SI), National President SI Thailand and is currently President of SI Bangkok and a VP of both SI Thailand and SI Asia. He is a regular guest lecturer at various Universities in Thailand including Assumption University’s Hospitality School and the Japan Hotel School in Tokyo.

The content of this article reflects the writer and does not necessarily reflect the editorial stance of The Thaiger.

 

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Coronavirus (Covid-19)

A Thailand Covid update that you won’t read in the news

Tim Newton

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Tim Newton goes through some of the moving goal posts regarding Thailand’s Covid situation RIGHT NOW. Vaccines for expats, what will happen after Songkran, provincial restrictions, new quarantine requirements. Reading the tea leaves and reading between the lines, Tim provides his personal opinions on many issues expats and foreigners in Thailand are worried about at this time.

 

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