Phuket Condo Management Company

[steve jones Phuket]

My wife and I own a condominium jointly on the hillside in Kata beach. The condo ownership has been wonderful. The Thai management company with a UK JP is using his own people (from another company i assume) to do work that is sub-contracted outside and charging very high prices to the project co-owners. Some people think that the work is 200 to 300% higher then normal local rates. Does anybody have any experience with a JP that is "skimming" off the top and can anyone recommend an honest company that doesn't overcharge its co-owners ? Our project is now having to raise rates because the JP keeps over spending the budget every month so his company can make more profit. 

[Halfaboy]

Ask for a detailed overviews of budgets and actuals and do your analysis. However, I'm afraid the JP does not want to provide you with this info as then you may now too much.

 

Only pay what was agreed by a legal quorum of co owners in an AGM and subsequently reported to the landoffice. That is the official rate. If the JP wants more ask for above info.

[smutcakes]

Why not speak to your Condominium Committee with your concerns? I presume if your condo is going to raise rates it is necessary to do this in a General Meeting. If that is the case there must be budgets, projections etc which would have been presented to the Committee. Normally any fee raise would be agreed with the Committee before calling any General meeting. It would be highly irregular for a Juristic Person Manager to call for an General Meeting without having the buy in of the Committee.

 

There is so much Chinese Whispers in Condominium's normally emanating from small cliques with grudges, or with vested interest themselves. Seek out your Condominium Committee and try and get proper information, rather than listening to Condo gossips.

[steve jones Phuket]

Can anyone recommend an honest company that doesn't overcharge its co-owners in Phuket ? 

[Delight]

The way it is supposed to work is as follows

 

The co -owners elect a JP with the standard 25% vote

The co -owners can select an human  or a Management company.

If the latter then the Management company will supply a human JP.

The JP has to ensure that the committee are acting within the law -then run the place on a day to day basis.

He will  manage  internal suppliers -typically a cleaner-a gardner -a technician.If it is a  small condo then probably not the gardner and the technician

Then there will be external contractors. Again he will have to manage.

Typically the external contractors will be a gardening company - swimming pool maintenance -techncian etc.

 

The selection and all decisions pertaining to the use of external contractors is with the committee-not the JP.

The JP will initially get the quotes (an opportunity for a fiddle)The committee has to be mindful of this.

Trust nobody

 

The key is that the committee takes these decisions -Not the JP

 

For what you state it sounds like you are simply employing a human JP.

 

Could it be that he has dressed himself up as a management company ?

 

 

How much money are you paying for JP services?

 

The way it typically works with a management company is the they provide a JP for the legal stuff then provide a building manager(BM) for the day to day stuff

 

That  JP will be the JP for many condos.

 

 

BM's come and go --JP's stay.

This is the main benefit of employing a Management company.

 

My guess for a Management company to supply a JP/BM plus other services is around 70K pm--just a guess

 

I think that firstly you should have a clear vision of how it needs to work in the future.i.e the relationship between the JP and the committee

 

 

 

 

 

 

 

Edited February 17, 2018 by Delight

[steve jones Phuket]

6 minutes ago, Delight said:

The JP will initially get the quotes (an opportunity for a fiddle)The committee has to be mindful of this.

Trust nobody

I think this is where the problem is. Its a management company that has a JP provided. Any recommendations folks for a company that doesn't "fiddle" ?

[Delight]

3 minutes ago, steve jones Phuket said:

I think this is where the problem is. Its a management company that has a JP provided. Any recommendations folks for a company that doesn't "fiddle" ?

 Where s the committee in all this ?

 

A honest Management company could well end up being  a dis -honest Management company if the committee is weak

 

It seems to me that  you are dealing with the symptoms not the

root cause

[KittenKong]

The "UK JPM" (I wonder if he has a valid work permit to perform that task: he needs one) may be submitting overpriced quotes but it's the committee who should be signing the cheques and indeed it's the committee who should be insisting on several quotes for every job being presented to them, and it's their decision which ones to accept or which ones to refuse as being too expensive. So it sounds like your committee is not doing its job.
That said, and as for listening to the committee, in my experience it is quite possible that the committee is just a group of puppets nominated and elected by cronies of the JPM, or even by fraudulent proxy votes. I've seen it happen myself more than once. The amount of deceit and fraud in condo management here is simply astounding.

The committee and JPM have no power at all to increase common fees, though they can recommend doing so. Any such decision can only be taken at a GM. At least one GM must take place every year, 120 days or less after the end of the condo financial year. The exact proportion of votes needed to raise extra cash will depend on whether the increase is permanent or on a year-by-year basis, and whether the GM is the first or second. (A second GM is called if the first does not have a quorum. The second meeting needs no quorum.) Year-by-year supplemental fees are extremely common in older buildings saddled with a low common fee that has never been increased, or badly-managed ones that have overspent. Such supplementary fees only require approval by a majority of those present at a second GM, with no minimum percentage of the total co-ownership at all. So they are much easier to pass than a permanent increase. This is how many older buildings function.

At your next GM you should interrogate your committee and JPM as to whether they insisted on other quotes being obtained, and how much they were for. Then you can ask them why they chose the more expensive alternatives, if indeed they did. Of course if your committee does not bother to attend the GM you may find it hard to get any answers. I've been in several GMs that had no committee members present at all. You can draw your own conclusions about the integrity of such people. My opinion of them could not possibly be lower.

I would never assume that budgets would be in any way accurate here. Ours, for example, are a joke. In fact they are so far removed from reality as to be totally irrelevant. I dont think that planning is a strong point of most Thai managements.

There is nothing irregular about a JPM calling a meeting. Indeed he is the one who is responsible for calling the yearly AGMs, or indeed any meeting requested by a legal percentage of co-owners. He is also empowered to call a GM if, in his opinion, the good functioning of the building needs it. That said, it would be unusual for a JPM to call a GM without the approval of the committee and to do so would indicate some sort of problem somewhere.

As far as I know the biggest condo management company in Thailand is QPM. I dont suppose that they became the biggest without doing a reasonable job, though like all Thai staff and companies I expect that they need to be monitored carefully. This is the committee's job, whatever they may happen to think about it. Apparently they operate in Phuket also. http://www.qpm.co.th/
The OP could try contacting them to see what they have to say.

[Peterw42]

51 minutes ago, steve jones Phuket said:

Can anyone recommend an honest company that doesn't overcharge its co-owners in Phuket ? 

My block uses QPM, Quality Property Management, its in Pattaya but I think the company operates all over Thailand. They appear great, everything gets repaired and upgraded, currently painting the whole block. .

I think you need to clarify things at your block, if there is already a management company usually they would be the JP/managers etc, no need to then have a separate JP.

JP is always answerable to the committee. And the committee sign the cheques etc. JP cant spend money or put fees up without committee and AGMs etc

Is the UK guy actually employed by the Management company. Is he the unpaid JP and the management company manages the block.

Not sure what you mean by the JP has his own people.

Is it possible the guy you call the JP is just a committee member ?

[steve jones Phuket]

Yes i know of qpm from another project. Any other suggestions as our condominium isnt very big (under 100 units) ?

[steve jones Phuket]

The problem here is really what i would call "transparency". I do not think a management company should also be involved in rentals and in construction as sideline work. What do other co-owners think about their condo management company engaged in those businesses when as a management company should be unbiased and in neutral position. I am told QPM does run that way but our current Management company does not. Tell me wrong here guys but I do not think a condominium management company should be doing rentals on the side for co-owners or using their "people" to be doing work in the condominium. My committee members i am not 100% sure know all those truths.

[lkn]

16 hours ago, steve jones Phuket said:

Yes i know of qpm from another project. Any other suggestions as our condominium isnt very big (under 100 units) ?

I think you need to do a bit more analysis before you change management company.

 

You want to change because “some people think that the work is 200 to 300% higher than normal local rates”.

 

What sort of work? What are the actual prices? What is your current management fee?

 

Some foreigners have the mistaken belief that because the minimum wage in Thailand is around 300 baht/day, they should be able to get whatever job done at that price, but for example a skilled accountant to manage your building’s finances does not work for 300 baht/day, nor would a building manager that can actually manage staff properly, or an engineer who can serve your building’s installations, etc.

 

The JPM *must* post monthly income and expenditure reports on your building’s bulletin board, start by looking at these, to see where the money goes (if these are not available, request them, and if they give you a problem, point out that this is a requirement of the Thai Condo Act which even states how much the JPM can be fined for failing to prepare these).

 

Also look at your financial report from your last AGM, this should be stored at your office and should be made available to co-owners upon request, so if you do not have a copy from your last AGM, go to your juristic office and request a copy.

 

If you get these reports feel free to send me a copy (by PM) and I can give you my opinion. I have been managing the finances of my own building for some time.

 

Without first having looked thoroughly at your building’s finances, I would *not* recommend you take any drastic actions like change management company. As someone else said, you need to get to the root of the problem, as this does not sound like a fault of the management company, as they should really not be given the authority to just issue bills left and right.

 

How it should work is that there is a general meeting where a budget is presented for the coming year, and the committee’s job is basically to oversee management and ensure the budget is being kept.

 

If the committee shows disinterest in overseeing management or getting involved with finances, there’s a good chance it’ll be a mess. I’ve met managers who were unfamiliar with double-entry bookkeeping, accrued accounting, and the importance of following a budget, which can very easily lead to wasteful spending without any ill will from the manager per se.

 

Edited February 18, 2018 by lkn

[lkn]

25 minutes ago, steve jones Phuket said:

The problem here is really what i would call "transparency". I do not think a management company should also be involved in rentals and in construction as sideline work. What do other co-owners think about their condo management company engaged in those businesses when as a management company should be unbiased and in neutral position

The management company is working for the building and managed by the committee.

 

For managing rentals; to what extend? For example, we register tenants and issue water supply bills directly to the tenant rather than the co-owner (if the co-owner prefers this), and we occasionally handle keys. It’s hardly any extra work, and it means we have a good idea about which units are rented to who and for how long, the former incase of issues, and the later to ensure that co-owners abide by the rules and only do long-term rentals.

 

As long as it’s no extra burden for the staff, there is really no problem with this. If it’s a burden, like doing TM30 registration etc. then you can always introduce a fee for these services, something to bring up at the AGM. Though in our building, we have the opinion that any extra service rendered to a co-owner should not come with additional payment, as long as our staff has free time to help with it, as we already pay management fee for having the staff available.

 

As for having management company do what I assume are paid repairs or building improvements, that is not uncommon, but it does lead to a situation where you may question if the management company’s prices are competitive.

 

However, expenses not in the budget should be approved by the committee, and expenses in the budget have already been approved by the AGM, so people would know what is being paid for these things.

 

For big jobs, the manager really should get 2-3 quotations rather than rely on his own people. For small jobs, I can definitely understand why he prefers to use his own people, as he knows the quality of their work, and ideally it would also lead to some sort of loyaltee from these people, but it’s hard to really assess without more details of what goes on at your building.

Edited February 18, 2018 by lkn

[lkn]

18 hours ago, KittenKong said:

I've been in several GMs that had no committee members present at all.

Wow… I assume this was in the odd years where the committee was not up for re-election.

 

But who chaired the meeting? And who presented the annual report?

 

17 hours ago, KittenKong said:

I would never assume that budgets would be in any way accurate here. Ours, for example, are a joke. In fact they are so far removed from reality as to be totally irrelevant. I dont think that planning is a strong point of most Thai managements.

Curious, since you often relay your bad experiences with condo management in Thailand, have you served on the committee? And if not, why?

 

I assume that you have several units (as I seem to remember you do rentals) and thus it would probably be too exhaustive to have to join the committee of each of the buildings you have units in, but what about your own building?

 

17 hours ago, KittenKong said:

There is nothing irregular about a JPM calling a meeting. Indeed he is the one who is responsible for calling the yearly AGMs, or indeed any meeting requested by a legal percentage of co-owners […]

I believe it is common practice to have the JPM do it, but actually, according to section 42 of the Thai Condo Act, the JPM is responsible for summoning only the *first* general meeting where the committee gets appointed, after which it is their responsibility to arrange for the annual general meeting, and the JPM is not allowed to chair these meetings.

 

For an extraordinary general meeting the JPM can call for this (as you write), but if it is requested by enough co-owners, their request should go to the committee, which must then arrange for the meeting.

[steve jones Phuket]

4 hours ago, lkn said:

Sounds like your project is very well run. Who are you using for a management company ?

 

 

[KittenKong]

The non-attendance of committee members was in both election years and non-election years. The ones that stood for re-election were re-elected thanks to proxy votes of dubious provenance, without actually being present at all. When the same committee members did attend a GM they generally took no active part in the meeting. Resignations (not always voluntary) also accounted for some of the poor attendance of committee members.

Those meetings were chaired by a third party (not the JPM) and between them they presented the reports, such as they were.

Yes, I've served on the committee in my building but unfortunately never with anyone else who was at all keen to put things in order. That made it very hard to achieve anything. I also got bored of spending time every month picking out childish mathematical errors in the monthly cash-flow and yearly financial report, and generally doing management's job for them.

No, I dont own any rental units: just the condo I live in. One Thai condo is more than enough for me and I can think of a hundred easier and better ways of generating investment income than through Thai property. But I do often attend meetings in other buildings as a proxy holder for friends. This has allowed me to see the good and the bad, though there has not been a lot of the former.

Edited February 18, 2018 by KittenKong

[lkn]

6 hours ago, steve jones Phuket said:

Sounds like your project is very well run. Who are you using for a management company ?

Not using a company but employ a building manager directly.