Formation of Juristic Entity and Sample By Laws - Does anyone know where information might be available?

[Thomas J]

My fiancé is Thai and owns a single family home in a housing village of approximately 30 homes.  It has been determined that there never was a legal entity filed for nor a legal juristic entity.  In the USA there are typically bylaws of the committees of homeowner associations that detail the formation of the association (entity) and specifies the powers, responsibilities, and duties of the committee and the various members ( owners) that are part of the association.  Just like Thailand they are formed to govern common area maintenance, and grounds that are common to the various owner members. 

Does anyone know if there are samples that are used here in Thailand.  It would be helpful not to have to start from scratch in terms of forming the entity and have it legally formed.  

[Delight]

 There is no such equivalent of the Condo.Act that deals with Walled Estates.

 

I,m sure that a walled estate can be 'converted'into a Juristic Person.

 

Any enterprise that has income and expenditure has the potential to go bust

 

All the the Juristic Person status will do is to act as a shield -to protect the house owners against actions of unpaid external suppliers. Suppliers who have no been paid.

There are a few laws relating to walled estates. Generally they are very weak.

The Thai government was compelled to create the Condo Act. At the time it was a conditional on the country obtaining a large loan.

The Thai government has never been compelled to create an equivalent act for walled estates.

So they haven't.

[Thomas J]

14 hours ago, Delight said:

There is no such equivalent of the Condo.Act that deals with Walled Estate

There definitely is a law or laws.  Another walled area near Siam Country Club hired a management company.  They put together the bylaws, and filed with the Land Office.  There are very specific requirements as to the formation of the entity, reporting profit and loss, balance sheet etc.  The land office knows the law but has no hand outs or reference to where one can go to read it. 

[Yellowtail]

5 hours ago, Thomas J said:

There definitely is a law or laws.  Another walled area near Siam Country Club hired a management company.  They put together the bylaws, and filed with the Land Office.  There are very specific requirements as to the formation of the entity, reporting profit and loss, balance sheet etc.  The land office knows the law but has no hand outs or reference to where one can go to read it. 

 

If you and or your wife are not paying monthly fees, what is the concern?

 

If you are paying monthly fees, quit paying them until they provide you with the information you are requesting;

[chickenslegs]

The relevant legislation starts with the Land Development Act 2000. Here is an English translation:

 

http://web.krisdika.go.th/data/outsitedata/outsite21/file/Land_Development_Act_BE_2543_(2000).pdf

 

The most pertinent parts start with Chapter IV, Section 43.

 

The Land Office should be able to give you a government booklet which details all the procedures and gives examples of rules&regulations, etc.

 

Probably best to sound out the neighbours before investing much time in this. If there is no majority wishing to register the village and create the Juristic Entity, it will not get off the ground.

 

 

[Thomas J]

19 hours ago, Yellowtail said:

If you and or your wife are not paying monthly fees, what is the concern?

 

If you are paying monthly fees, quit paying them until they provide you with the information you are requesting;

We did and they started having the security guard roll out a gate blocking our entrance to the village. 

[Yellowtail]

42 minutes ago, Thomas J said:

We did and they started having the security guard roll out a gate blocking our entrance to the village. 

 

So you are not starting from scratch. There is an entity, yes?

[Thomas J]

9 minutes ago, Yellowtail said:

So you are not starting from scratch. There is an entity, yes?

No, the land office shows the last entity to be formed was in 2012.  The person taking over the responsibilities as "chairman" never filed with the land office.  She has been "acting" as the person in charge of the common area collecting monies, paying for security guard, landscaping etc.  However, she closed the bank account belonging to the association.  From that point on, she has been collecting the money, mostly in cash, with a few payments going directly to her personal bank account.  Expenses have never been detailed.  No income and expense statement, no balance sheet.  Some expenses paid in cash, others documented to be paid directly from her personal bank account. 

 

[Yellowtail]

2 minutes ago, Thomas J said:

No, the land office shows the last entity to be formed was in 2012.  The person taking over the responsibilities as "chairman" never filed with the land office.  She has been "acting" as the person in charge of the common area collecting monies, paying for security guard, landscaping etc.  However, she closed the bank account belonging to the association.  From that point on, she has been collecting the money, mostly in cash, with a few payments going directly to her personal bank account.  Expenses have never been detailed.  No income and expense statement, no balance sheet.  Some expenses paid in cash, others documented to be paid directly from her personal bank account. 

 

So if you are paying your fees, you have security, water, electricity, the trash is getting picked up and they are keeping up with the landscaping, what exactly is the issue?

 

Do you have a group of unhappy residents or is it just you?

[Thomas J]

42 minutes ago, Yellowtail said:

Do you have a group of unhappy residents or is it just you?

There is a group who is not paying.  The issue is that there is a larger group not paying and without a legal entity there is no way of forcing them to pay.  So everyone paying is paying a larger fee to compensate for those not paying.  The second issue and the bigger one is that everything is being paid for "in cash" or through this person's personal bank account.  No accounting of income or expense.  Tried to "guestimate" what income is coming in and "guestimate" the monthly expenses.  If only a portion of the homes are paying, there still should be more money coming in than going out.  Example, about 1.5 years ago, was assessed extra 5,000 baht to pay for automatic security gate and eliminate 10,000 per month expense for night security guard.  Paid the extra 5,000 thb but monthly dues don't go down.  Where is the extra 10,000 baht going? 

 

[mogandave]

29 minutes ago, Thomas J said:

There is a group who is not paying.  The issue is that there is a larger group not paying and without a legal entity there is no way of forcing them to pay.  So everyone paying is paying a larger fee to compensate for those not paying.  The second issue and the bigger one is that everything is being paid for "in cash" or through this person's personal bank account.  No accounting of income or expense.  Tried to "guestimate" what income is coming in and "guestimate" the monthly expenses.  If only a portion of the homes are paying, there still should be more money coming in than going out.  Example, about 1.5 years ago, was assessed extra 5,000 baht to pay for automatic security gate and eliminate 10,000 per month expense for night security guard.  Paid the extra 5,000 thb but monthly dues don't go down.  Where is the extra 10,000 baht going? 

 

 

Again, join the group that is not paying and make it clear why you are not paying. 

[Thomas J]

50 minutes ago, mogandave said:

Again, join the group that is not paying and make it clear why you are not paying.

There was a gathering of people who knew we were not paying but did not know why.  They were unaware of the fact there was no legal entity.  Though some expressed concern over not receiving financial accountings others were not.  One man went so far as to say, I know she steals but not worth my time.   One way or another, everyone is at the very least paying to high a community dues because without an entity those people not paying (including us) can not be forced to pay.  My bigger issue legal entity or not is to have a separate bank account where all monies for dues are received and all bills paid from.  No more cash, no more mixture of personal bank account with community monies. 

 

[mogandave]

1 hour ago, Thomas J said:

There was a gathering of people who knew we were not paying but did not know why.  They were unaware of the fact there was no legal entity.  Though some expressed concern over not receiving financial accountings others were not.  One man went so far as to say, I know she steals but not worth my time.   One way or another, everyone is at the very least paying to high a community dues because without an entity those people not paying (including us) can not be forced to pay.  My bigger issue legal entity or not is to have a separate bank account where all monies for dues are received and all bills paid from.  No more cash, no more mixture of personal bank account with community monies. 

 

 

Do you have a significant percentage of owners that are concerned AND willing to try to do something about it or not. 

 

Clearly if half the people now are not paying yet enjoy the same services everyone else does this will likely go nowhere. 

[Thomas J]

7 minutes ago, mogandave said:

Do you have a significant percentage of owners that are concerned AND willing to try to do something about it or not. 

 

Clearly if half the people now are not paying yet enjoy the same services everyone else does this will likely go nowhere. 

You are correct.  A sizeable percentage of the homes are not owner occupied.  Some are foreclosed properties by the banks, others people who live outside of Thailand.  Getting 51% of them to attend a meeting is likely a tall task if not impossible.  I talked to the land office and the person "intimated" that an exception could be made if there was an impossibility of getting the required 51%.   I personally would not have a problem with there not being a legal entity though I would favor it since it would cause 100% to pay.  My biggest issue is money running through a personal account and no reporting. 

 

[Delight]

On 1/24/2021 at 11:10 AM, Thomas J said:

There definitely is a law or laws.  Another walled area near Siam Country Club hired a management company.  They put together the bylaws, and filed with the Land Office.  There are very specific requirements as to the formation of the entity, reporting profit and loss, balance sheet etc.  The land office knows the law but has no hand outs or reference to where one can go to read it. 

What can the management company do -legally speaking -with non payers or those who break the By -laws?

 

 

[AlQaholic]

12 hours ago, Delight said:

What can the management company do -legally speaking -with non payers or those who break the By -laws?

According the land act, and similar to the condominium act, after three months of non payment, the common facilities can be denied to the non payer, such as garbage collection, use of roads, use of playgrounds etc. In practice it is impossible to enforce of course.

 

The situation is unacceptable of course, the person collecting money has no authority to do so. You should form a committee by having a meeting among the owners, then go to the land office to register the committee as a juristic person. This is, if you can find enough people that can be bothered. The problem with such a small community is just that, it is too small, Nobody wants to be troubled. With a community of hundreds of households it becomes much easier.

[topt]

16 hours ago, Thomas J said:

 I personally would not have a problem with there not being a legal entity though I would favor it since it would cause 100% to pay. 

Unfortunately it wouldn't necessarily.

Village with just over 50 homes. Registered with land office. Non payment becoming more and more of an issue as people sold and or moved out and renting often to visitors from Bangkok just for the weekend.

 

 

[topt]

12 hours ago, Delight said:

What can the management company do -legally speaking -with non payers or those who break the By -laws?

 

I am not sure of the exact process but with a juristic entity when a house comes to be sold the land office will ask for a waiver from the juristic to say there are no debts owed before allowing the transfer. Not sure if the juristic has to apply a "lien" to the property first or whether it is automatic.

[Yellowtail]

What does the wife think?

 

Unless you have a large group with a Thai national spearheading it, it seems like a lot of downside potential with little or no upside. 

[Cake Monster]

23 hours ago, Thomas J said:

There was a gathering of people who knew we were not paying but did not know why.  They were unaware of the fact there was no legal entity.  Though some expressed concern over not receiving financial accountings others were not.  One man went so far as to say, I know she steals but not worth my time.   One way or another, everyone is at the very least paying to high a community dues because without an entity those people not paying (including us) can not be forced to pay.  My bigger issue legal entity or not is to have a separate bank account where all monies for dues are received and all bills paid from.  No more cash, no more mixture of personal bank account with community monies. 

 

FYI

It is a legal requirement that all Monies paid into the" Village Estate " and all outgoings , are published and placed in a prominent position within the Village in order that the Residents can freely inspect the Accounts at any time. This has to be done on a Monthly Basis.

Account to show Name / s ( Juristic person )on Account, Bank Branch and Account Number.

IE A profit and loss Account

BTW

The Village has to operate as a Non profit Business,

[uksmdh]

Sadly the death knell of many estates here in Thailand.  Your story could be my estate.  We tried to sort out the estate with little success.  Mainly because it appears to be only the Farangs that are bothered and the Land Office is only interested in Landowners (Thais).  Before people say anything yes we have Company owned Land but the L.O. would only conduct business in Thai.  The solution appears to be employing a Lawyer and be prepared to tip. Question is then who pays?

[malcolminthemiddle]

Can any one recommend a lawyer experienced in these matters where the Developer does not object? 

[Thomas J]

11 hours ago, topt said:

Unfortunately it wouldn't necessarily.

While technically true, as a legal entity you can go to the land office and file against the property of those not paying.  That prevents them from ever selling the property without settling up for the monies that are due.  I don't know if there are any more enforcement options such as a lien against bank accounts etc. but I do know the filing at the land office means that eventually the village would get paid. 

[topt]

5 hours ago, Cake Monster said:

FYI

It is a legal requirement that all Monies paid into the" Village Estate " and all outgoings , are published and placed in a prominent position within the Village in order that the Residents can freely inspect the Accounts at any time. This has to be done on a Monthly Basis.

Do you have a reference for this please - either English or Thai?

Thanks

[Thomas J]

5 hours ago, Cake Monster said:

FYI

It is a legal requirement that all Monies paid into the" Village Estate " and all outgoings , are published and placed in a prominent position within the Village in order that the Residents can freely inspect the Accounts at any time. This has to be done on a Monthly Basis.

Account to show Name / s ( Juristic person )on Account, Bank Branch and Account Number.

IE A profit and loss Account

BTW

The Village has to operate as a Non profit Business,

Yes, 

I am aware of that.  However at this point there is no legal entity.  So I am not sure what the situation is relative to the requirement to show a profit and loss, balance sheet and a separate bank account.  In a legal sense those paying are doing so voluntarily to a non-entity.  I asked the land office if there were any penalties for failure to register as an entity and still operating as one.  The man said no.  That does not make sense to me, that you have a law requiring you to form an entity and how it is run, then no penalties for failure to do so. 

 

[Cake Monster]

11 hours ago, Thomas J said:

Yes, 

I am aware of that.  However at this point there is no legal entity.  So I am not sure what the situation is relative to the requirement to show a profit and loss, balance sheet and a separate bank account.  In a legal sense those paying are doing so voluntarily to a non-entity.  I asked the land office if there were any penalties for failure to register as an entity and still operating as one.  The man said no.  That does not make sense to me, that you have a law requiring you to form an entity and how it is run, then no penalties for failure to do so. 

 

Welcome to the Minefield that is Thai " Law "

Been there, done that with Moo Baan and Juristic Person / Entity Etc.

Never again, its a farce.

There probably is some kind of " Entity ". usually the developer will hold on for as long as possible before signing over the Village to a Committee. So maybe its a " Representative " of the Developer who is receiving the Money and " Dealing " with the outgoings Etc.

One thing will be for sure, you as a farang will have little or no say in what is going on, as ranks will be closed to you, and you will be labelled a troublemaker Etc for just wanting things to be Legal, correct and Transparent.

If the person dealing with the Money is not open, then possibly there could be a Fraudulant activity taking place, but again dealing with the Police is a nonsense.

You either have to accept that its the way it is, or move out

Best wishes

 

 

[Yellowtail]

If you are not paying and they continue to maintain the area, why rock the boat? 

[Thomas J]

2 hours ago, Yellowtail said:

If you are not paying and they continue to maintain the area, why rock the boat?

That is exactly what we did until they instructed the security guard to block the entrance and exits to the village with a rolling gate.  Since we were "not paying" they instructed the security guard not to remove them.  Mind you we already have paid for an electric rolling gate but they instructed him to use the manual steel rolling gate while on duty. 

[Yellowtail]

59 minutes ago, Thomas J said:

That is exactly what we did until they instructed the security guard to block the entrance and exits to the village with a rolling gate.  Since we were "not paying" they instructed the security guard not to remove them.  Mind you we already have paid for an electric rolling gate but they instructed him to use the manual steel rolling gate while on duty. 

 

How do the guards know who's paying and who isn't? 

[Salerno]

5 minutes ago, Yellowtail said:

How do the guards know who's paying and who isn't? 

 

Which is the most plausible conversation:

 

"Block the person not paying"

" Block Tom from number 36, number plate XYZ"