is not receiving an invoice a legal pretext to refuse to pay common fees in condomium

[fvw53]

In our Condominium there is now finally a serious effort to clean up 10 years of mismanagement ...yes there is a new Committee and there is a new Juristic Person.

A big issue is now that in the past only 1/3 of the co-owners paid regularly the common fees regardless if they got an invoice or not : they knew the surface of their unit and the common fee charge per square meter.

The other 2/3 did not pay regularly or never paid and the management company is charging them the penalties as prescribed in Section 36/6 of the Thai Condo Act 2008.

We are now facing uprising from co-owners who claim they never paid the common fees because they never got an invoice...so they refuse to pay the penalties

Until now nobody could reply to the question if a co-owner has the right to refuse or neglect paying common fees if he or she did not get an invoice (it could mean invoices have to be sent by registered letter)

 

[CharlieH]

Suggest you would be better placed with this in the Real Estate forum.

 

MOVED

[Kwasaki]

As in most situations like this you ask to pay by bank transfer then you have a supporting legal record.

[baansgr]

The office should have records of all previous invoices.....he said she said isn't a defence

[KittenKong]

11 hours ago, fvw53 said:

We are now facing uprising from co-owners who claim they never paid the common fees because they never got an invoice...so they refuse to pay the penalties

The common fee will be a regular fixed part of your building rules and regulations and so cannot be ignored, regardless of whether an invoice was received or not.

 

Any supplementary fee would be exceptional and of a fixed duration, but it would (or should) have formed an official part of a general meeting and been voted on by co-owners, and the positive result of that vote should have been reported in the minutes. As long as it was so voted and reported then it is a valid fee and also cannot be ignored.

 

If the fee was just something imposed on a whim by management or the committee without a co-owner vote then I doubt that it could be justified.

[scorecard]

QUOTE:  "In our Condominium there is now finally a serious effort to clean up 10 years of mismanagement ...yes there is a new Committee and there is a new Juristic Person.'

 

I assume this is a result of a large number of owners complaining.

 

So just wondering is those that now refuse to pay because no invoice are the same folks who complained about management and wanted better management.

 

A question 'which way do you want it?' Support the improved situation or try to pull it down? 

 

 

 

[john2211]

Is there any mechanism to force non payers to pay?

[Jeffkp]

52 minutes ago, john2211 said:

Is there any mechanism to force non payers to pay?

We had this problem with one co-owner. Refused to pay for over 2 years. We finally sent him a letter from our lawyer. The only option is to take them to court. I suggest negotiating about the penalties.

[fvw53]

9 hours ago, KittenKong said:

The common fee will be a regular fixed part of your building rules and regulations and so cannot be ignored, regardless of whether an invoice was received or not.

 

Any supplementary fee would be exceptional and of a fixed duration, but it would (or should) have formed an official part of a general meeting and been voted on by co-owners, and the positive result of that vote should have been reported in the minutes. As long as it was so voted and reported then it is a valid fee and also cannot be ignored.

 

If the fee was just something imposed on a whim by management or the committee without a co-owner vote then I doubt that it could be justified.

Many co-owners accepted to pay the arrears and the penalties as they were voted a long time ago. The question is that other co-owners refuse to pay the penalties because they say that they got no invoices (=requests to pay) /  if this pretext is legally acceptable then those who already paid the penalties will be furious if others can use this pretext and escape from the penalties.

See Section 18 of Thai Condo Act 2008 here under :

 

Section 18/1 In the case where a joint owner fails to make payments set forth under Section 18 with the prescribed time, such joint owner shall pay surcharge at the rate not exceeding twelve percents (12%) per year of the amount unpaid without compound interest charging provided, however, that this shall be in accordance with the requirements set forth under the Bylaws.

A joint owner with an amount in arrears under Section 18 from six months and upwards shall pay surcharge at the rate not exceeding twenty percents (20%) per year and may be suspended from receiving common services or using common property as set forth under the By-laws including the non-existence of the right to vote in the General Meeting.

[fvw53]

1 hour ago, Jeffkp said:

We had this problem with one co-owner. Refused to pay for over 2 years. We finally sent him a letter from our lawyer. The only option is to take them to court. I suggest negotiating about the penalties.

Who has the authority to "negotiate" penalties prescribed by the law : the Manager of the Juristic Person ?  The Committee ? the Annual General Meeting?...or the Thai courts?

[inThailand]

9 hours ago, KittenKong said:

The common fee will be a regular fixed part of your building rules and regulations and so cannot be ignored, regardless of whether an invoice was received or not.

 

Any supplementary fee would be exceptional and of a fixed duration, but it would (or should) have formed an official part of a general meeting and been voted on by co-owners, and the positive result of that vote should have been reported in the minutes. As long as it was so voted and reported then it is a valid fee and also cannot be ignored.

 

If the fee was just something imposed on a whim by management or the committee without a co-owner vote then I doubt that it could be justified.

Our bylaws say payment is due after an invoice is received. Review your bylaws. 

 

The bylaws should also state what the current fee amount is and yes, they should reflect what the majority voted for and these meeting minutes duly registered and the bylaws updated.

 

It seems logical since fee collection has been so mismanaged for so long, that you provide each owner an account statement showing fees paid and showing what is owned and when it must be paid up by, say within 90 days. If not paid by then, you start assessing late fee payment charges. 

 

By law, after 6 months of unpaid fees the JP Mgr can sell their property. 

 

 

[Crossy]

1 hour ago, Jeffkp said:

I suggest negotiating about the penalties.

 

Yes, I reckon after 10 years of mis-management you need to take a pragmatic approach.

 

For the non payers - To avoid the penalties.

• Start paying now.
• Pay a percentage of owed back fee.

Fail in the above and the full force of owed fees and penalties and the law come in to play.

 

 

[inThailand]

You could also call an EGM and have a resolution to forgive past unpaid fees or pay reduced fees. This of course applies to all owners, so any owners who did pay their fees should get the appropriate refund or credit. 

 

Does your management actually have 10 years of good accounting records to carry out such a plan? 

 

[rocketdave]

Never pay anyone anywhere without a receipt!

[Mavideol]

21 hours ago, Kwasaki said:

As in most situations like this you ask to pay by bank transfer then you have a supporting legal record.

this happen at my friend's building, he has a unit but leaves in another city, never received an invoice but from his contract he knows how much to be paid and every year send a wire transfer to juristic condo bank account, recently they changed juristic person and the account showed a huge debt because many homeowners didn't pay, they use the no invoice excuse and he shut them off by showing his transfer, homeowners should know their responsibilities

[Mavideol]

37 minutes ago, inThailand said:

Does your management actually have 10 years of good accounting records to carry out such a plan? 

in thailand? that would be a miracle....

[cryo]

Disagree I live in a condo with more than 10 years of official accounts. The easy way to get people to pay their fees is to state the water will be disconnected if fees are not kept up to date allow two months grace after notice. This will get attention and get the majority of fees paid but you must provide an account invoice to show credit or debit for the individual units post payment.

 

 

Ken.

 

 

 

[KittenKong]

2 hours ago, fvw53 said:

Many co-owners accepted to pay the arrears and the penalties as they were voted a long time ago. The question is that other co-owners refuse to pay the penalties because they say that they got no invoices (=requests to pay) /  if this pretext is legally acceptable then those who already paid the penalties will be furious if others can use this pretext and escape from the penalties.

See Section 18 of Thai Condo Act 2008 here under :

I understood the question and I know the Condo Act.

 

My point was that if the fee is legal then the bills are payable according to the building by-laws regardless of whether the invoice was received or not. Penalties are also payable for the same reason though it would be advisable to send a written warning in advance before applying them. This warning would normally be part of later invoices. Warnings could also be given out in the annual meetings and there should be no real excuse for not knowing that money is due.

So for me it all hinges on whether or not the fees were all legally voted or not. If they were then the debt exists and should be paid.

[KittenKong]

3 hours ago, Jeffkp said:

I suggest negotiating about the penalties.

Why? Make them all pay. I'm sick to death of cheapskate co-owners here and I have no time for any of them.

[KittenKong]

2 hours ago, inThailand said:

Our bylaws say payment is due after an invoice is received. Review your bylaws. 

 

The bylaws should also state what the current fee amount is and yes, they should reflect what the majority voted for and these meeting minutes duly registered and the bylaws updated.

My by-laws are fine and dont need reviewing, thanks.

 

As I pointed out the by-laws will state the amount of the common fee but not of any supplementary fees that are imposed by vote at a GM. However any such extra fees are valid and should be paid, even though they are not mentioned in the by-laws.

 

Changing the by-laws to permanently increase the basic common fee generally requires a very large percentage of co-owners to agree to it, and so is unlikely to happen in many older buildings where it is needed. Some provision for automatic increases may be included in the by-laws of newer buildings.

 

 

2 hours ago, inThailand said:

By law, after 6 months of unpaid fees the JP Mgr can sell their property. 

No, he cant. He can apply to the court to sell it though. The court is unlikely to agree unless the amount of the fee/penalties is a significant proportion of the value of the unit, and goes back many years. Six months wont be anywhere near enough. The co-owner being dead might be another valid reason.

[newnative]

8 hours ago, john2211 said:

Is there any mechanism to force non payers to pay?

Yes.  Take them to court.  At a recent annual meeting that I attended as a proxy, I saw that the condo had excellent results by first sending out a letter to delinquent owners threatening court action.  This took care of the majority of delinquent owners.  The remaining delinquent owners were taken to court  in batches and the condo won the cases that have been decided so far.  From a delinquency rate of around 30%, the condo now has, if I remember correctly, around 95% compliance. 

[KittenKong]

10 hours ago, newnative said:

At a recent annual meeting that I attended as a proxy, I saw that the condo had excellent results by first sending out a letter to delinquent owners threatening court action.  This took care of the majority of delinquent owners.

Yes, the threat is usually enough for most people.

[fvw53]

17 hours ago, Crossy said:

 

Yes, I reckon after 10 years of mis-management you need to take a pragmatic approach.

 

For the non payers - To avoid the penalties.

• Start paying now.
• Pay a percentage of owed back fee.

Fail in the above and the full force of owed fees and penalties and the law come in to play.

 

 

There are in total 165 co-owners, about 1/3 always paid the common fees on time regardless if they got invoice or not, about 1/3 started with the change of management to pay the arrears and also the penalties and for some of them this was several hundred thousands of Baht....How can we start to negotiate with the remaining 1/3 and reduce their penalties while infuriating those who  accepted to pay the full penalties. A TVF member suggests in this case to reimburse the penalties paid by the second group....while there is a delay of 6 to 8 months to pay the companies providing the guards, the cleaning women...and now a maintenance company sends pro forma invoice of 2.4 million Baht to renovate the elevators (the total of the unpaid common fees is 15 million Baht)

[jkcjag]

Just read your JP regulations and apply the rules stated. Follow up with legal action if justified according to the rules.

[KittenKong]

6 hours ago, fvw53 said:

How can we start to negotiate with the remaining 1/3 and reduce their penalties while infuriating those who  accepted to pay the full penalties. A TVF member suggests in this case to reimburse the penalties paid by the second group...

I dont see how you can possibly write off some debts without giving a similar gift to all other co-owners who have always paid up to date. Not only isnt it fair but it is tantamount to embezzlement. The whole point about a condo is that it is a co-ownership with everyone (supposedly) being treated the same way and everyone paying their fair share of costs.

If my management/committee tried to do this they would never hear the end of it from me.

 

The only workable answer is to make the freeloaders pay every Baht that they owe, including all the legal penalties.

[inThailand]

14 hours ago, fvw53 said:

There are in total 165 co-owners, about 1/3 always paid the common fees on time regardless if they got invoice or not, about 1/3 started with the change of management to pay the arrears and also the penalties and for some of them this was several hundred thousands of Baht....How can we start to negotiate with the remaining 1/3 and reduce their penalties while infuriating those who  accepted to pay the full penalties. A TVF member suggests in this case to reimburse the penalties paid by the second group....while there is a delay of 6 to 8 months to pay the companies providing the guards, the cleaning women...and now a maintenance company sends pro forma invoice of 2.4 million Baht to renovate the elevators (the total of the unpaid common fees is 15 million Baht)

You must apply the same criteria to all owners, ie fee collection and penalties. Since about 1/3 are delinquent apply the rules to to them like the other 2/3 have or are adhering too. You cannot grant discounts or waive fees or fee penalties for a subset of owners. Put another way, why should delinquent owners get a break over those owners paying on time?

[Henryford]

We have a strict rule in my condo. 6 months overdue we cut off the water, 12 months we take them to Court. Fees/penalties are applied to late payers. We had fun with the original developer who still owns 70 condos and refused to pay the common fee. After several Court visits we got them to pay with a very large amount of fees and penalties, which helped our finances. You have to be strict and enforce the rules straight away not wait for months/years.

 

I agree with others here the non payers should NOT get any better treatment than prompt payers. Take them for EVERY baht.

Edited March 8, 2019 by Henryford

[lkn]

On 3/7/2019 at 11:41 AM, fvw53 said:

[…] for some of them this was several hundred thousands of Baht

This sounds extreme. To arrive at late fees of more than 200,000 baht then the owner must have neglected to pay for the entire 10 years and have a reasonable sized condo (relative to the building having 165 units and what gets built today).

 

E.g. 80 sq. m. at 35 baht per sq. m. per month is only 181,440 baht in late fees after 10 years, going by the maximum 12% that can be charged according to the Thai Condo Act (which does not allow compounding, and require that the fee be specified in the bylaws).

 

If someone has actually paid nothing for 10 years, it’s hard to claim ignorance, OTOH it really is the building’s responsibility to send out invoices, and without having sent out invoices with payment terms, it’s hard to claim late fees.

[fvw53]

15 hours ago, lkn said:

This sounds extreme. To arrive at late fees of more than 200,000 baht then the owner must have neglected to pay for the entire 10 years and have a reasonable sized condo (relative to the building having 165 units and what gets built today).

 

E.g. 80 sq. m. at 35 baht per sq. m. per month is only 181,440 baht in late fees after 10 years, going by the maximum 12% that can be charged according to the Thai Condo Act (which does not allow compounding, and require that the fee be specified in the bylaws).

 

If someone has actually paid nothing for 10 years, it’s hard to claim ignorance, OTOH it really is the building’s responsibility to send out invoices, and without having sent out invoices with payment terms, it’s hard to claim late fees.

yes we had 10 years of severe negligence by Committee and by Manager of Juristic Person

[inThailand]

On 3/16/2019 at 11:55 AM, fvw53 said:

yes we had 10 years of severe negligence by Committee and by Manager of Juristic Person

This is probably more the norm here?