Mega property auction set for December

PHUKET TOWN: During a weekend visit to the island, Justice Minister Pongthep Thepkanjana announced that the Legal Execution Department’s (LED’s) first-ever nationwide property auction using teleconferencing will be held on December 14. The auction will feature properties from Phuket, Bangkok and Chiang Mai each valued at more than 20 million baht. The teleconference auction is one of several new measures intended to reduce the number of non-performing loans (NPLs) in the country by making it easier for investors to buy foreclosed properties. Other newly-announced incentives include: • A cut in the fees charged to successful bidders from 5% to 3.5% (scheduled to go into effect in early 2004). • Making winning bidders eligible for tax rebates on properties bought at auction. (Although scheduled to go into effect October 1, the rates of such rebates have yet to been confirmed.) • Making the LED responsible for seeking court permission to have illegal occupants removed from seized properties. Under current regulations, bidders must file for court orders themselves. The LED expects the new law to be enacted in early 2004. K. Pongthep led about 30 reporters on a tour of properties for auction, which included three- and four-star hotels with sea views as well as lots close to the beach. Later, a list of these and other properties was displayed at the Phuket Arcadia Beach Resort, backed by a slide show. A detailed list of the 650 Phuket properties held by the LED and scheduled to be auctioned off can be viewed on the department’s Thai-language website, https://www.led.go.th , at the Phuket LED office and at several other government offices on the island. K. Pongthep announced that Phuket, Chiang Mai and Bangkok would serve as pilot provinces for the auction, which will be televised live on TV channel 11 starting at 9 am. Bidders must place a 50,000-baht refundable deposit with the LED before the event, either in cash or in the form of a cashier’s check. Foreigners may place bids only as representatives of registered juristic entities. Local auctions, administered by the Phuket LED (PLED), will continue to be held Thursdays at the PLED office in Phuket Town. In addition, in November, the PLED will host a “grand” auction at the Phuket Merlin Hotel, during which 250 properties will go under the hammer. Between January and August this year, the PLED auctioned off 209 properties for a total of 397 million baht, reaping 25 million baht in fees. Currently, the PLED holds 2,053 properties, including 113 properties added in August. It expects to take in more than 1.5 billion baht in auction sales and associated fees by the end of 2003. K. Pongthep told the Gazette that LED auctions were becoming increasingly attractive to buyers due to the low prices and the variety of properties put on the block. “People have more choice when buying properties from the LED because we’ve got townhouses, condominiums, houses, hotels, factories, hospitals and more,” he said. K. Pongthep said that despite strong public demand, the property auction had to remain limited to one day a week due to staff constraints. PLED properties are put up for auction on a rotating three- to four-week cycle until they find a buyer. Reserve prices on unsold properties are reduced by a fixed percentage in each round of bidding.