Management Fee and Sinking Fund

[Jamie69]

I have bought into a condominium Project and are one of the lucky ones who have received the title deeds, however the developer has failed to complete certain parts of the Project and i fear that they are in financial problems, most of the title deeds are in the bank and they do not have the Money to release them. The question i need asking is where are the management fee and sinking fund which the buyers have paid to the deleoper. I Believe that these monies have never been put aside in a special account gaining interest but have been spent on their lawyer fees and for their personal gain. I have asked the financial controller where these monies are and he said he could not answer but i should get in touch with the owners, I am trying to get in touch with these people but knowbody wants to give me them. If they have used these monies is it a question of fraud? 

[Delight]

It seems to me that the Condo. Act assumes that the building in question will be registered as a Condominium Juristic Person and at that point the developer will sell the individual appartments.

As we all know that is not the process.

 At some later stage a bank account will be created

It will me named 'Name of condo. Condominium Juristic Person

 

However the Condo Act does not refer to this account

Therefore the developer will typically not open such an account

All the monies will remain in the original bank account

An account that the developer has control of.

 In the building where I live the developer had control for 3 years after people moved in.

You have view that the co -owners money will be set aside-sorry this is wishful thinking

 

By law monthly accounts have to be published.

So as the Condo Act has no ruling on these monies-I cannot see how fraud can apply

A lawyer will know more

[scubascuba3]

Sounds like the first few years while a condo is getting established, don't pay condo fees

[Jamie69]

Thank you delight for you reply, the problem with the developer is that he has a rather dubious reputation with two developements going bust 

this is not the case in my developement as the residents have moved in without their Title Deeds about one third have been transferred but the other buyers have been waiting over two years now with promises of next week, next month and so on. The Building Manager has informed me that we cannot start a committee untill at least half of the condo`s have been transferred. The way this is going on this could eitther never happen or take several years. After two years some of the apartments need to be looked after and as we have no Management Fee or Sinking Fund these repairs cannot me made. I really do suspect that these monies have been spent on perhaps other things than what they should be used for and these monies no longer exist. I suspect your answer would be as you said Contact a lawyer. Upon receiving the keys the developer wanted us to pay the Management Fee and other monies Before handing over the key.

[KittenKong]

The Building Manager has informed me that we cannot start a committee untill at least half of the condo`s have been transferred.

I suspect that he is basing that on the fact that until the chanotes are transferred the developer still owns the other units, and so can vote against any proposals or simply fail to turn up thus making a quorum impossible.

Bear in mind that your manager is surely being paid by the developer, so he may be biased.

If I were you I would get together with other co-owners who have chanotes and would go and see the Land Office to see what they think of it all. Who knows, they may even help you.

As mentioned, what should happen is that the building is declared to be a condo, all the chanotes are transferred and an initial AGM is held within a few months of that. At that GM co-owners elect a committee, and a JPM (this is NOT a building manager, though one person may do both jobs, or they may not even be a building manager as such) and approve rules. They may also discuss and vote for employing a management company and any other business. Then the committee and JPM set up bank accounts, following which monthly accounts should be posted. But until the committee is in place and a GM has been held I see no legal requirement to post accounts or hold money correctly (i.e. ring-fenced). So the odds are indeed that your developer is treating the sinking fund and any maintenance payments as his own.

I think it is very important in Thailand to avoid paying in advance.

[Delight]

 The Condo Act has no provision to deal with a developer who refuses to transfer.

 

The law allows for the creation of an Extra General Meeting (EGM) to resolve  issues.Co -owners can instigate such a meeting (rules apply)

Typically at such meetings you can replace the JPM and set up a committee etc.

However I suspect that you will be out voted at such a meeting.

 

The only course of action is via the legal system.

The  recommedation from Kitten Kong to seek advice from the land office seems to me a good first step.

You will need to be organised for a land office visit

Have all the salient facts on paper and in Thai.

I would think that  a translator,in attendance, is also essential.

 

The law states that co -owners should pay their share of the maintenance .

The developer is classed as a co -owner on all apartments that  have not been transferred.

Has he paid?

 

Edited May 21, 2018 by Delight
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[KittenKong]

The law allows for the creation of an Extra General Meeting (EGM) to resolve issues.Co -owners can instigate such a meeting (rules apply)

Typically at such meetings you can replace the JPM and set up a committee etc.
However I suspect that you will be out voted at such a meeting.

The condo act clause about no single co-owner (including the developer) holding more than the total number of votes held by all other co-owners could be helpful in this respect.

Of course it is ridiculously easy to bypass that clause, assuming that just one co-owner can be persuaded to support the person/developer who owns the larger number of shares.

To me it is not clear whether the OP's building currently has a JPM at all, or just a building manager as it seems. Either way, the place to discuss changes is at a GM. It might be worthwhile for co-owners to employ a lawyer to be present and to count votes, and to type verify the minutes so that they can be presented to the Land Office and registered correctly. Especially if a committee and/or JPM is elected at the GM.

Co-owners who dont have chanotes can be present as observers, and their presence can be noted in the minutes. But they cant vote.

[Jamie69]

Thank you KittenKong, one just hopes that these monies will be available when the time comes they are in financial difficulties as i mentioned earlier and are unable to pay the bank who have the Title Deeds this situation has been going on for two years.


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[inThailand]

I believe the Land Dept will only issue a condo development registration and a title deed for each condo after any debt on the common area property is paid off. If you say you have a title this seems to indicate that each phase of the project has its own registration. If your phase is registered there must be a registered juristic person manager. All this can be verified with a trip to the Land office. And as others say where is the owner's common and sinking funds, the balances and monthly financial reporting. The detail behind these reports will highlight owners who have or haven't paid their fees. Mostly likely these funds have disappeared based on your description of the situation. I would stop paying my fees until at least the above was answered. 

[pipeflaw]

If the condo is registered with the Land Office then all deeds/chanotes have been issued and every owner, including the units the developer has title to, have to pay maintenance fees on their units.  When the developer has not paid MF for 6 months or more, the developer loses the right to vote at meetings.  I have already litigated this. 

 

The real owners have to band together and call for a meeting.  Read your condo regulations and figure out what % you need to call a meeting and what constitutes a quorum.

[English Engineer]

Sorry to read of your situation. There is little control here of developers either condo or village developments. We just have sold our house in a village development when it became clear the developer had financial problems. We are building on our own land using our friend who is the builder, but even in this cases payment is based on progress. This option is only available if you have a reliable thai wife. Cost is also very much reduced as moo baan is also much more expensive.

[Sprigger]

Wouldn’t buy a box of matches in Thailand, thieves, rouges and vagabonds to a man.

[lvr181]

Condo in Bangkok? Sinking fund is appropriate. 

 

Slightly OT 

[KittenKong]

The real owners have to band together and call for a meeting. Read your condo regulations and figure out what % you need to call a meeting and what constitutes a quorum.

They have not yet had a first meeting (as far we know) and so there can be no internal regulations. So any rules about quorums and percentages would be those mentioned in the condo act, which take priority anyway. Unless perhaps the developer held a meeting without informing anyone else. That would be illegal but stranger things have happened here.

The only thing we can be fairly sure about is that if some chanotes have been issued then the building must have been declared a condominium by the Land Office, and the condo act requires that an initial GM be held within a few months of that event and that accounts should be posted regularly thereafter.

If that isnt happening then the Land Office is the place to go. Only they really know the true status of the building and the chanotes etc.

[DonnyS]

Buddy, Looks like You were "Schtooped" . In different country this wouldn't happens but in Thailand your rights are nothing. I believe in reciprocity relationship if it would up to me (USA) these countries that wont let you purchase a home should be treated at the same way. you like the sun , the lifestyle the Babes ...  you have gotten back some of the Thai hospitality!!

[ballbreaker]

According to Condominium Act (Section 42) the first General Meeting should be scheduled by Manager within 6 months from registration date.  The fact you have a chanote in your possession the building has been registered and all chanotes have been issued even thought most are still in developers name.  If you have never had a general meeting then manager has violated the condo act.

Edited May 23, 2018 by ballbreaker

[Pattaya46]

20 minutes ago, ballbreaker said:

According to Condominium Act (Section 42) the first General Meeting should be scheduled by Manager within 6 months from registration date.  //  If you have never had a general meeting then manager has violated the condo act.

Yes, but looks like nobody care...

This weekend I saw that the Fly Bird Condo in Pattaya had its first ever AGM in March, 19 years after it opened ! 

[Henryford]

Another example of why you should only buy into a mature condo where the chanute is transferred when you buy and the Accounts/Sinking Fund are open to inspection. Buying a new or off plan condo is a minefield.

[Fairynuff]

22 hours ago, Sprigger said:

Wouldn’t buy a box of matches in Thailand, thieves, rouges and vagabonds to a man.

Helpful comment

[Jamie69]

Thanx everyone for your advice. I will pay the Land Office a visit. I think i only got my chanote because i became a problem for them and hoped i would be happy. Well that’s one mistake they made, these people should be locked up


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[Delight]

1 hour ago, Krister said:

Thanx everyone for your advice. I will pay the Land Office a visit.


 

Perhaps you could report back  with some detail of the outcome of your meeting with LO

 

For certain many subscribers will be interested !

Edited May 23, 2018 by Delight
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[Jamie69]

I am at the moment in my homeland but will report when i can


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[inThailand]

You would be wise to verify your chanote at the Land Office based on the situation. Monkey business is rampant here.