In many countries, once a decision to purchase a property has been made, a deposit paid, the parties should be able to sit back and handover legal matters to their lawyers, and concentrate on admittedly stressful practical matters such as furniture removal, checking boilers / heating / air conditioning systems and often working through a ‘chain’ of interdependent transactions where in some cases each chain involves a buyer loaning monies from a bank.
Strangely, the same sets of buyers when investing overseas in countries like Thailand, forget or deliberately dispense with the most essential and often sheer common sense oriented checks. Sometimes just to save a few pennies.
Here are 5 of the most commonly overlooked issues:
1. Conducting a Structural and Internal Survey of the Property
Because many foreigners are buying outright with cash, there is often no bank looking over the shoulder of the purchaser insisting on the bare minimum checks. Weirdly, many buyers’ approach to the matter of structural integrity appears to be “if it looks like the building is standing up straight, it must be safe and ok to live in”. It is worth remembering that not every pour of cement is the same, not every pillar has the same number of rods running through, and that even though a building permit has been issued, the construction plans may not have been followed and further, after time, a building can deteriorate – visibly and invisibly. Why not splash out what could be the price of a few cases of overtaxed wine on making sure the ceilings don’t cave in on top of you and your family
2. Checking Legality of the Existence of the Property?
If you see something exists, should your mind then snap shut to the possibility that it should not actually be there at all?
There are many aspects to a property being built and legally existing in Thailand and each one of these should be checked because it should not be assumed that a seller in a re-sale knows of any issues or wishes to disclose them, or in an off-the-plan purchase that the developer has abided by all the rules.
Check the history of the land, the zoning restrictions, building height restrictions, land height from sea level building restrictions, gradient of slope restrictions, compliance with environmental consent, proximity from a beach, proximity from restricted zones such as temples, conformity with building plot ratios – the amount of built up area permitted on a land plot, conformity of the number of rooms in the property as per the building permit, the registration of interests at the land department and whether those Thai records match contracts which may have been signed in English or another language.
Perhaps if a choice exists between buying that super nice super expensive outdoor sofa, chairs and table and paying a law firm to check your prospective property is legal, you could choose the latter.
3. Check you aren’t walking into an ongoing dispute
One of the most common questions asked when someone learns of a breakaway from an existing business is “Was it amicable ?”. People are naturally and keenly interested in whether parties are able to keep matters friendly whilst conducting difficult discussions.
In many properties throughout the globe, there are plentiful wells of legal fees for lawyers dealing with property related disputes. Lawyers, most of the time, cannot be legitimately attributed to having created disagreements. Most people are capable of creating arguments without assistance.
Where there is an owners committee, there is a set of minutes for meetings. Simply by retrieving and looking at a few years worth of minutes, you can get a feel for how an estate is run. There will always be some mad hatters who spend their days trying to make an asset manager’s life as miserable as possible, perhaps believing that their role in life is to scrutinize and hold everyone around them to account in an unpleasant manner. However, there will also be some sensible people, sometimes devoting much of their personal time for free, to overseeing committees and trying to get the property in order which ultimately benefits a group of owners.
Phuket is a small island roughly the same size as Singapore. There is only one main courthouse in Phuket and it can easily be found using googlemaps or simply driving into the centre of Phuket. We do recommend engaging a lawyer to check if you are dealing with has some cases filed against them at court.
4. Defining what you are buying – clearly
Due to the gulf existing between certain agents of low quality, and other agents of high quality, there can be quite disparate and contrasting approaches to the seemingly simple task of creating the ‘particulars’ or ‘description’ of a property. The description of a property by its very nature becomes the subject of a binding sale and purchase agreement which under Thai law is a sale of immoveable property. If the subject is incorrect, then any act arising from the transaction could be jeopordised by misunderstanding and disputes can arise.
Weirdly, many people transacting like to seem ‘amicable’ by making vague friendly references to furniture, fixtures, fittings and equipment such as “let’s deal with that later” “oh it’s ok, I am sure they won’t steal the toaster (wink wink)”. Unfortunately, this can result in metaphorical or actual tears later on. If an agent is involved, surely a furniture list can be drawn up. If the property is being bought and sold with a tenant still in the property, surely the seller knows what was in the property when the tenant took possession.
All in all, ascertain precisely what you are buying.
5. Make sure something is registered and/or legally transferred to you, properly
Many intelligent people got caught up in the Bernie Mahedoff scam because they simply assumed that those before them knew what they were doing. This could be, without wishing to insult lemmings, be coined as ‘Lemmingitis”.
When you buy a property, just because someone says they ‘own it’ doesn’t mean that is the case. Please kindly ensure you check for documents such as – the construction permit, the whereabouts of any land title documents, the constituent parts of any Thai and foreign companies involved, the validity of registers or the ‘company books’, information recorded at the Department of Business Development, and ensure that when any legal interest is transferred such as that in a building, property, leasehold right, condominium title right, and/or shares, that this is handled by competent professionals, who know what they are doing.
Phuket is a beautiful island. It is developing and infrastructure is improving. Property prices are on the whole going to increase over time if history is an indicator of the future. If you intend to be a positive part of this story, take care and enjoy your property hunting.
Desmond Hughes is a senior partner of Hughes Krupica www.hugheskrupica.com which has offices in Sathorn, Bangkok and The Boat Lagoon, Phuket and has been operating as a law firm owner in Thailand for 15 years specializing in property investment, hotel investment and disputes spanning those segments and the wider commercial context.
Desmond is UK qualified, Hong Kong qualified (OLQE), a Fellow of the Chartered Institute of Arbitrators and a current International Corporate and Commercial Law LLM student at King’s College, London.
Weakness in the BKK condo market
PHOTO: Nara 9 – www.nara9.net
Property consultants, Edmund Tie & Company – South East Asia – report that the new condo supply for 2019 is ‘unlikely to increase’ and that sales rates are disappointing in Q3.
Their report says that the take-up rate of newly launched condominium projects in Q3 in Bangkok’s CBD dropped from last year’s 58% to only 31%, year on year. This is even lower than the performance in Q2 which was 46%.
Developers are acknowledging that there is a weaker demand for residential units and a significant drop in overall supply.
The three highest performing condo sale segments were the ‘luxury segment’, followed by the ‘super luxury’ and ‘Grade A’ segments.
The average price for condos has remained flat for Q3, compared to Q2 – around 330,000 baht per square metre – but this is still a 32% increase when compared to the same quarter in 2017, according to the report.
But Edmund Tie report that the figures are just a minor ‘blip’ following big rises in demand and sales over the past three years. They report that the new condominium supply in the CBD during Q3 was 1,636 units, rising from 852 in Q2, 2018 – a 92% increase in new units hitting the market.
For the office sector, their report says that rents will continue to increase gradually in the final quarter of this year and into 2019, driven by limited supply.
“There will be an increased demand for office condos in Bangkok.”
They say office developers remain focused on providing open-plan office space close to public transport nodes.
Thailand’s creative entrepreneurs funding passions through Airbnb
2,000 Airbnb Homes and Experiences hosts in Thailand are members of the Creative Community
25% of all creative Thai hosts are based in Bangkok. One in every five Thai Experience hosts are from the arts, music, fashion or entertainment industries.
Like tourism, which now accounts for more than 10 percent of the world’s global GDP, the creative economy is thriving worldwide. In Thailand, new Airbnb data shows that there are 2,000 passionate Airbnb hosts in Thailand who work in the creative industry.
These creative entrepreneurs, many of whom live in cities and work away from home for extended periods, are embracing digital and technology platforms to help support themselves, fund their passions and showcase their creative work.
Most share their extra living space through Airbnb Homes, setting their own listing prices and keeping 97% of all revenue. In fact, 60% of all creative Home hosts globally say Airbnb has helped them afford to stay in their homes. Others share their passions and craftsmanship by hosting Airbnb Experiences, handcrafted activities for small groups of guests. They set their own listing prices and keep 80% of all revenue earned, while gradually building a following for their creative work.
“Thriving creative communities are essential to vibrant, inclusive economies such as Thailand. Airbnb is proud of the supporting role we play as a technology platform that leverages the growing interest in travel to promote local culture and creativity, while nurturing tourism that is local, authentic and sustainable,” said Mich Goh, Airbnb Head of Public Policy for Southeast Asia.
Airbnb’s Key Findings in Thailand
- Almost a quarter of all creative Airbnb hosts in Thailand are based in Bangkok. They know the soul of Bangkok’s cultural scene, and are eager to share the creative and cultural highlights of their city with guests within their very own neighbourhoods.
- According to Airbnb’s Healthy Travel and Healthy Destinations 2018 Report for Bangkok, 78% of all Bangkok hosts offered recommendations for cultural activities to their guests. Half of all cultural activities recommended are located within a 20-minute walk of their listing, encouraging guests to venture beyond popular tourist areas and explore the local, authentic side of Thailand’s neighbourhoods.
- In addition, one in every five Airbnb Experiences in Thailand are creative-based — rooted in the arts, entertainment, fashion or music.
- 60% of all Airbnb Experiences hosts in Thailand are women, reflecting UNESCO’s observation of the inclusivity of the creative sector toward young people, women and small businesses.
Meet Creative Airbnb Host, Ananda Chalardcharoen
An avid Airbnb user and traveler, Ananda Chalardcharoen enjoys seeking unique and attractive on Airbnb on her travels. That’s why when she had the chance to be a host herself, she quickly jumped at the opportunity.
Today, Ananda is the owner of The Mustang Nero Hotel – a quirky boutique hotel tucked away in Bangkok’s Sukhumvit soi 46. Housed in a renovated old commercial building, the hotel blends chic simplicity with a raw vintage aesthetic. Ananda’s background in fashion design clearly inspires the hotel’s zany tropical-themed interior. Each of the hotel’s ten rooms is intricately decorated and named after a unique animal, from ‘The Zebra Song’ to ‘Black Bird’ and ‘The Lion Sleeps Tonight’.
“The Mustang Nero Hotel is one-of-a-kind. I’ve put a lot of effort into the design and décor to ensure our guests have a truly unique stay, and at the same time I hope to showcase a creative side of Thailand to my guests,” Ananda shares. “Airbnb is the primary online platform we use. I feel like we have grown together – Airbnb has been essential in helping The Mustang Nero Hotel reach customers and grow as a business. I would say 95% of our bookings today come through Airbnb.”
Located in the heart of the city, The Mustang Nero Hotel offers guests a mini green oasis with lush foliage artfully planted throughout the hotel. Having grown up in the Phra Khanong area, Ananda loves to share local insights and knowledge with her guests. A self-curated local guidebook in Thai, English and Chinese is available for guests, and includes her tips and secrets to the neighbourhood.
A Growing Partnership Catalogue
Airbnb became the first travel platform in Thailand to sign a Memorandum of Understanding (MoU) with the Thailand Boutique Accommodation Trade Association to bring more than 50 boutique hotels across 15 provinces onto the platform this year. The partnership recognises that creative boutique entrepreneurs are playing an increasingly key role in driving the local tourism ecosystem, and aims to spotlight authentic Thai hospitality, culture and design in boutique hotels.
In June, the company launched Airbnb Experiences in Chiang Mai and the rest of Thailand alongside a panel discussion with the Thailand Community Based Tourism Institute (CBT-I), Creative Chiang Mai and Chiang Mai University. With popular experiences including Thai Traditional Yantra Tattoo and Kow Soy Noodle Making, Airbnb aims to continue supporting the creative and cultural Northern Thai capital as an ever popular global travel destination.
Top 10 Luxury Homes in Thailand (that you can buy)
This exclusive home, to be completed in October 2019, is one of only 6 villas in The Heavens project located on Koh Samui island, in the sheltered Gulf of Thailand. While this 5 bed and 5 bath villa is in walkable distance to the famous Lad Koh Viewpoint, the views from the villa itself are even better. Chaweng beach, the city, and the neighboring island of Koh Phangan are all visible, (reachable in 20 minutes by speedboat if you want to check out the Fullmoon party or Half-moon parties), there is also an observatory and telescope onsite available for use by residents.
Living in one of Asia’s biggest cities, condo life can be great, but some would rather have their own private homes in Bangkok. With homes like this, it’s easy to see why. This spacious and sunny villa is located near several prestigious Thai, and international schools in quiet Asok; a neighborhood popular with tourists for its easy accessibility, shopping, restaurants, and nightlife. Big enough for friends and family to stay with 8 bedrooms and 9 bathrooms, this villa is in convenient walking distance to both the skytrain as well as the subway – but still has its own parking if you would rather drive around the city. But you might not want to leave at all, with your own private pool, gym, garden, and full kitchen.
If you’ve ever wanted to live in Thailand, or have a tropical island vacation, The Cape Residences is a great place to enjoy a luxurious holiday. It is set on a quiet and exclusive wooded peninsula with view of Phang Nga Bay and its famous natural skyscrapers, the limestone islands that dot the sea. The project was designed by architect Jean-Michel Gathy, who has worked for some of the region’s most famous luxury hotel brands like Banyan Tree and The Mandarin. He’s now lent his talents to this collection of elegant private residences that include 24 hour security, tennis courts, steam rooms, private pools, as well as access to a world class spa and restaurant.
This 5 bedroom penthouse condo in Pattaya is far from the usual expectations of condo life in Asia. With a private pool and private gym, views of the city, the sea, and mountains, it’s easy to forget that you’re living in a condo in this 29th floor duplex – especially with almost 1000 square meters to relax in after walking back from the beach or Pattaya’s nighttime entertainment.
This home in the Palm Hills Golf Club and Residence is the perfect golf getaway for someone who wants the peace and quiet of living outside Thailand’s major cities, while still being able to enjoy a world class golf course and western amenities. After finishing a round among the palm trees dotting the property and taking in panoramic views of mountain ranges surrounding the resort, there is a private pool, jacuzzi, sauna, and clubhouse available before having a relaxing meal at the onsite restaurant. Slightly less expensive than similar homes in Bangkok or Pattaya, this could be a great retirement home in Thailand, a holiday timeshare, or rental opportunity in Hua Hin.
It might not be for everyone, but walking into this house in Chiang Mai, will feel like walking into your own mini Palace of Versailles. Full of bright and wide open rooms, the 2,200 square meter home is covered in hardwood floors and marble tile, with some recessed and high ceilings – making it easy to keep cool in this tropical country. The classical theme includes spiral staircases, and even some Doric and Corinthian style columns. Despite the classic look, it’s not without modern conveniences like a jacuzzi.
Removed from the touristy areas and located in the quiet north eastern section of Koh Samui island, Laem Yai, this house is still just a short motorbike ride away from the busy Chaweng beach or Lamai beach. The two story, three bedroom house is one of just fourteen in the Estates Samui development. It includes two onsite restaurants serving both international and Thai food, a spa and health club, yoga pavilion, tennis (with lights for nighttime matches), golf, as well as beach and water sports. The villas feature an unobstructed panoramic view of the ocean with floor to ceiling glass, and master bedrooms include their own private pools.
Koh Samui seems to be a favorite for builders and developers, as there’s no shortage of luxury vacation rentals and dream homes. This three floor, eleven bedroom villa is no exception. Bophut is quaint fishing village, but closer to Chaweng than Laem Yai. The property makes great use of the natural landscape by nestling itself into the rising mountains and giving a great view of the surrounding mountains and jungle as well as the Gulf of Thailand. When not taking in the sights, one can relax in the private pool or garden, or lounge out in the sun deck.
While Koh Samui has countless options for luxurious island getaways, Phuket is easily one of its biggest rivals. One great example of what a holiday home in Phuket has to offer is this three floor, six bedroom villa in the Ayara Surin development, which has only 21 other units. The infinity saltwater pool looks out to the Andaman Sea, and after swimming there’s a jacuzzi, spa, and bar available to really enjoy your holiday. All this, and still just a walk to Surin beach.
While some Bangkok residents are relegated to living in thirty square meter apartments, there are still opportunities to enjoy spacious dream homes. In Bangkok, there are plenty of private homes if you’re looking for an alternative to condos. This five bedroom house in Sukhumvit, includes a massive garden surrounded by privacy walls, its own pool, balcony and terrace, and a full western kitchen. Covered parking is included, but it’s also a short ride to the subway.
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