PHUKET: In a move to address numerous complaints from condominium buyers, the Thai government enacted the Condominium Act No 4 (2008), which significantly expanded the scope of consumer protection by amending several provisions of the original Condominium Act made thirty years previously.
The original Act has been amended three times in attempts to keep the law up to date with new private sector developments and practices; however, the 2008 amendment was one of the most comprehensive overhauls. It extended buyer protection, enacting additional requirements and duties for developers, and modified restrictions on foreign ownership.
Previously there were few legal provisions to protect buyers. Potential buyers risked exposure to developer bankruptcies, unfair contracts, unfinished or substandard construction, disputes over maintenance fees, and various other problems. An aggrieved buyer’s only options were to file a complaint with the Consumer Protection Board and hope that the Board would take action, or initiate a potentially lengthy and expensive legal case against the developer.
Amendment No 4 contained several provisions designed to protect condominium buyers. Standardized Form Contract: A key provision in the new armory is a requirement that purchase contracts between the developer and buyer conform to a standard format prescribed by the Ministry of the Interior.
This format promotes a degree of uniformity and certainty in purchase contracts. Furthermore, any clauses in a purchase contract that deviate from the standard format and are not in favor of the buyer will not be enforceable. The required clauses include basic information such as the developer’s ownership in the land and the location, price and size of the condominium and development complex.
More importantly, one of the required clauses is a detailed objective of the usage of every area of the condominium including individual condominiums, common property and facilities. This provision addresses prior buyer complaints about developers who changed the common area for other uses or built additional units over common areas.
Accurate advertising: Developers must also take careful steps to ensure that their advertisements to the public, such as pictures, statements or brochures, truthfully and accurately represent the completed condominium. Since 2008, any advertisement for the sale of a condominium will be regarded as forming part of the purchase contract and any inconsistencies between the advertising and the actual purchase contract will be interpreted in favor of the buyer.
Additional duties and restrictions on developers:
Payment of monthly maintenance fees for unsold units: In the past, disputes often arose between developers and buyers over payment of maintenance fees for units which had not been sold, resulting in a shortfall of maintenance funds. Since 2008 the developer is responsible for paying taxes, common services expenses, and common maintenance expenses for units to which ownership has not yet been transferred.
Operation of businesses within a condominium: There are also new restrictions on the operation of businesses within the condominium. Specifically businesses are only allowed to operate in designated areas, and the developer must arrange for separate entrances and exits for these businesses in order to protect residents from noise and
Penalties for violations: The new amendment provided a comprehensive list of penalties for developers who violate any of the new provisions. The biggest penalties are for violations of the standard form contract or for violations of accurate advertising, with fines between 50,000 and 100,000 baht. A violation of the provisions regulating business use within the condominium carries a slightly lesser fine but with a small addition for each day the violation is not fixed.
Changes in restrictions of foreign ownership: Under the original Condominium Act foreigners were explicitly granted the right to purchase and own condominiums as long as foreign ownership of the total units within a development did not exceed 49 per cent. Condominium Act No 3 (1999) liberalized these restrictions and allowed foreigners or their holding companies to hold in aggregate over 49 per cent in certain developments, but since 2008, the 49 per cent ceiling was reinstated – except, as mentioned last month, for those who were fortunate enough to have purchased their condominium in excess of that percentage during the time it was allowed, in which case ownership is still protected.
Viewed as a whole, the Condominium Act No 4 (2008) is part of a larger consumer rights movement in Thailand. Along with the Escrow Act 2008, more of which will be explained later, the Thai government has been moving to address complaints of consumer fraud and abuse. In general, the new law created some minor burdens for developers, while extending significant protection to consumers.
This article has been written by the International Law Office Patong Beach Co Ltd, a Phuket-based law firm for international purposes only. In case of inquiry, please contact Timothy A Taylor, Consultant, by phone on 076-222191/5, or by mail to [email protected].
— International Law Office
Hong Kong property tzars team up for new Phang Nga development “Aquella”
Two of Hong Kong’s leading entrepreneurs Allan Zeman and Richard Li are developing a mixed-use project in Thai Muang, Phang Nga named Aquella.
The initial phase of the development includes a par 72, 18 hole golf course, resort pool villa residences with two to four bedroom unit configurations back of a massive land site that offers over 2.5 kilometres of white sand beach.
Previously, the approximate 1,000 rai site was the home of the Thai Muang golf course. After acquisition the course was closed, and the master planned Pinetree project that was to contain a marina and luxury Park Hyatt hotel stopped when land zoning issues changed in Southern Phang Nga.
Today, the new golf course has been reconfigured and Zeman’s Paradise Group who developed Kamala’s posh Andara ultra villa resort in Phuket are collaborating with Li’s Pacific Century Premium Developments (PCPD) group.
South West Phang Nga hosted some of Asia’s most significant luxury villa sales in the mid 2000’s given it’s close access to Phuket International Airport, over the Sarasin Bridge.
Changes in the zoning regime stunted the area’s growth over the past decade but a new wave of interest has been born in projects such as Charn Issara’s Baba Beach Club.
Land prices in Koh Pilai and Koh Kloy have sharply escalated in recent months on the announcement of a second Greater Phuket airport by Thai aviation authority AoT.
That said, the area has a rich history in demonstrated luxury residential sales in projects such as Aleenta and Sava.
With Phuket bursting as the seams, and prime oceanfront plots limited, the recent transaction of the former greenfield site of the Ritz-Carlton Reserve has indicated positive sentiment.
Car and house loans surged in 2018
The Bank of Thailand says they’re concerned about the double-digit growth in loans for cars last year. The central bank is now monitoring the trend and will keep track of statistics for the rest of 2019. Their concerns about the Thai mortgage market the year before resulted in new regulations coming into effect this April.
Loans for cars were up nearly 13% in 2019, up from 8% growth in 2017 and much smaller growths in the years before.
They reported that commercial bank auto loans rose to 1.07 trillion baht last year, a rise of 12.6% from the previous 12 months. Defaults on loans has also risen during 2018 but the BoT says the rate is still “manageable” at 1.66%.
The BoT says they will need to continually monitor the business of loans for cars for at least the rest of 2019.
Last year they put the spotlight on property mortgages. The study resulted in more stringent conditions for the loan-to-value ratio, especially for second or subsequent housing loans.
Mortgage lending expanded nearly 8% in 2018, compared to 5.5% in 2017. The more stringent requirements for housing mortgages comes into force on April 1 this year.
Generally, the loan sector for commercial banks rose by 6% last year, again a rise from the previous year where the rise was 4.4%.
But the BoT reports that the profitability of the banking sector remains in positive territory. Interest income is now the main source after the fee-based income of some banks, particularly fund transfer fees, declined.
Kamala’s Twinpalms Montazure poised to welcome guests in July
Set on the golden sands of Kamala Beach, Twinpalms MontAzure will welcome its first guests in July this year.
Already a member of Small Luxury Hotels of the World, the boutique beach hotel offers beautifully appointed Suites, Penthouses and Private Pool Suites.
Suites range in size from 70m2 to Penthouses with private pools and sea views boasting large living spaces of up to 300m2. Guests will also enjoy using a lap pool or an infinity pool offering views of the Andaman sea.
Twinpalms MontAzure will also launch its beachside restaurant and lounge, ‘Shimmer’, with uninterrupted sea views. Shimmer restaurant will serve vibrant and tasty food with an Asian focus, delicious and creative cocktails, and a great wine list, all served with the customary gusto and flair expected from the Twinpalms brand.
Olivier Gibaud, General Manager of Twinpalms Hotels & Resorts says, “With 15 years’ experience refining Twinpalms excellent service standard complemented by a luxurious dining and entertainment quality that sets itself apart from other destinations on the island, we are very excited to bring this knowledge to a new hotel”.
Designed by Martin Palleros, following the original Twinpalms concept and style, of utilising Phuket’s beautiful landscape, Martin has allowed the design to maximize the sea views from most of the Suites and areas within the buildings, whilst also ensuring the preservation of the views of the mountainside from other perspectives.
Resident Manager, Thipwimon Chatchavansilachai says, “For respect for our island location, we will launch with a ‘no single-use plastic’ policy, meaning alternatives to common plastic items such as straws, packages for bathroom amenities and water bottles will be replaced with materials such as bamboo, ceramic and recycled paper.”
“We will continuously find better alternatives in our hotel operations for the preservation of the environment”.
Naturally, guests of Twinpalms MontAzure also have access to the brand’s other dining destinations, taking full advantage of the three beaches Twinpalms has a presence: HQ Beach Lounge – a few steps away on Kamala Beach, Catch Beach Club, Catch Junior and Palm Seaside, located on Bang Tao Beach and the flagship resort, Twinpalms Phuket, is just a few steps from Surin Beach.
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