Phuket Property Watch: Stand up and deliver
PHUKET: Winter has hit the northern hemisphere and somehow the “Occupy Wall Street” movement looks to have lost momentum.
Was it the chilly weather, or fractured interests of an aggravated monster with no head proverbially chasing its own tail? Round and round we go, and where we land, no one knows.
It’s like bursting into a crowded room and shouting out with an authoritative grunt – “Who’s in charge here?” – only to be met with deadpan silence and no single individual to meet you’re probing stare.
Sometimes I stare at my golden retriever, wondering anxiously what do pets think? Can she speak or even just hum a familiar tune. But no, my gaze is met with a turned head, eyes darting away despite a wagging tail.
Occupy Wall Street led me to think of the seasonal annual owners’ meetings held at villa and condominium estates across Phuket. These loosely based organizations, somewhat like a disenfranchised family scattered across the globe, are like walking down to the beach and throwing a handful of sand into the howling wind, the grains scatter to the four corners and beyond.
The only ties that bind a family are by blood but for property owners the common interest is their own piece of real estate on what many term an island of desire.
For many the word family boils down to an often eclectic mix of different personalities, agendas and certainly a number of quirks. It’s the epitome of dysfunctional – as may be defined by many a tattered soul.
Thailand’s foreign property ownership laws arguably remain ill-equipped to handle both the volume of overseas investors’ risk mitigation concerns, and provide a fairly low level of modern consumer legislation governing common ownership interests.
One glimmer of hope is the Condominium Act which has continued to be upgraded over the past four years, though this has been in reaction mainly to domestic demand.
For leasehold projects, be they apartments, villas or houses, oftentimes a set of estate rules are annexed to purchase agreements although in reality enforcement ranges from difficult to nearly possible.
Moving into ownership groups or committees again gets some ‘facetime’ in contracts be they informal organizations or else written into statutory bylaws and articles of incorporation frequently in offshore regimes.
Local practices tend to “follow the leader” and for many owners a legacy of slim picked, short form contractual obligations simply don’t fully address long term issues.
Who’s to blame? Buyers who don’t invest in legal representation when they purchase units, developers who just wish to exit on profit and leave the owners’ groups to fend for themselves down the line and certainly the lack of government recognition of that fact that, yes, foreigners do own property in Thailand in a significant way.
Short term thinking and long term facts of ownership have steered into uncharted territory and in reality some of these growing pains are steps on the maturation ladder.
Unfortunately management companies are often the soft targets for frustrated owners to vent their spleen over rising costs that, in many cases, are affected by Thailand’s hyperinflation. Going back to the family analogy, it’s a bit like poor whacked out 80 year old Aunt Edith arriving on your doorstep one day and knowing you have to nurse her through old age.
On the cost front, harsh tropical climates; the lack of skilled manpower and limited resources often result in owners being unwilling to invest into capital projects in the long term. Estates are somehow similar to hotels and remain capital intense operations. Oh, all that lovely wood which pushed you into buying in the first place, has now come back to bite you on the big toe.
Management often simply continues to throw more manpower at issues. From a cost basis, staff and energy costs are two large big ticket expenses and it’s often easy to simply increase these year after year and add double digit common area charges to owners.
What about retrofitting emerging saving devices or rationalizing efficiency of labor ? Again these remain arcane sciences that ultimately must become an agenda item for estate management. More staff does not mean better maintenance.
Another key issue is long term capital replacement for roadways, pool re-tiling, large equipment and major upgrades. The use and misuse of the entire sinking fund concept has to change. Expense planning must be a long term tool and not a dirty little secret that only comes up when an entire estate is crumbling into neglect and decay.
That given, property ownership groups the world over all have similar serial traits and like it or not Phuket simply tracks the trend. Ownership involvement is on the rise and looks to be a relevant topic for the next decade as properties start to grow older.
If you are an owner, stand up, make yourself known and participate in the process of proactive ownership with a practical long term view. The state of an estate can large affect the market value of your own investment.
Phuket property brief… New commercial center for Laguna Phuket
The site of the former giant supermarket in Cherng Talay is being developed into a commercial mall by the developers of Boat Lagoon.
Located at a prime intersection leading into Laguna Phuket the “Boat Avenue” project is already underway and the larger ‘for sale’ units will be completed in early 2013.
A combination of single story units for rent and three-and-four -story buildings, which can be connected, will be sold.
Rentals for the initial units are already being snapped up quickly with only eight spaces with sizing for 50 square meters left.
Sales for the larger units are expected to commence at the end of this month.
Both pedestrian and car parking allocations have also been upsized according to the project office.
Bill Barnett is Managing Director of C9 Hotelworks and can be contacted through c9hotelworks.com.
— Bill Barnett
