Voting for a juristic entity - One vote for each person on Chanote? What about Company owned homes? 1 vote for each shareholder?

[Thomas J]

I am looking for someone knowledgeable on this subject.  We recently had a "vote" for whether to form a Juristic Entity in the single family housing complex.  I noticed that one person who has a company that owns two homes voted 2 times and his Thai live in ( who I presume is one of the shareholders) also voted two times.  Other homes with only a single person listed on the Chanote were allowed to cast only one vote.  

Since every home pays the identical dues it would seem "reasonable" that each parcel would get a single vote but I am told that is not the case.  That each person on the Chanote gets to cast a vote.  That seems blatantly unfair.  Also what exactly is the rule with company owned properties. As mentioned I say company owned properties casting multiple votes.  Again a company is a "single entity"  there is only one name on the Chanote, the name of the company.  Using the same logic if only one persons name is on the Chanote, wouldn't there be only one vote.  

The idea that a home with husband, wife, and two children on the home should be able to cast 4 votes, and one with only a single man or single woman on the Chanote seems blatantly unfair. 

[Peterw42]

One vote per property

 

However, a vote may come down to the size of a condo etc (the percentage of the block you own), a 1 bedroom may get one vote but a 2 bedroom (twice the Sqm) may get 2 votes, 

Condos in my block are numbered 1 bedroom is 101, next 1 bedroom is 102 etc. A 2 bedroom is numbered 103-4. So if a 1 Br represents 2% of the block and one vote, a 2 Br represents 4% of the block and two votes

 

Either way, multiple owners of one property dont get a vote each.

 

 

[Thomas J]

6 minutes ago, Peterw42 said:

One vote per property

Are you certain?  One person at the land office stated it was one vote for each party listed on the Chanote

[Peterw42]

52 minutes ago, Thomas J said:

Are you certain?  One person at the land office stated it was one vote for each party listed on the Chanote

Think about it logically, it cant be any other way, A company could have a hundred shareholders, that would mean 100 people would get a vote (in an estate with only 50 houses).

The land office probably means entity , as in company, partnership etc

@blackcabis very knowledgeable with this stuff and will probably be along shortly

[Thomas J]

1 hour ago, Peterw42 said:

Think about it logically

I know but then again if I always thought logically in trying to understand government policies, I would always be wrong. 

[Delight]

 The voting methodlogy has to be agreed at the start of the meeting.

It will be the  chairmans job to suggest/ask for  alternate methods.

Then vote on the options.

The chairman may also wish to establish the conditions that must apply inorder to form a quorum.

25% of the total available vote -has to be in attendance -for example.

Again a vote will be required.

Given that this Juristic Person creation  relates to property -then voting criteria as detailed in the condo act may be adopted. Again a vote is required to agree this.

 

[Thomas J]

5 hours ago, Delight said:

The voting methodlogy has to be agreed at the start of the meeting.

Is there anyplace where a person can see the actual law dealing with walled communities?  Also regarding the voting.  How can you vote on which method of voting to agree on, if there isn't a methodology agreed to prior to the vote.  

Finally, do you or anyone else, know how voting works for properties owned by companies.  It would seem "logical" that there would be some form of resolution by each of the companies authorizing who can vote on behalf of the company.  Since the non-thai owner can not own more than 49% of the stock, it would seem that without a resolution or proxy by the other shareholders that the most the non-thai owner could cast would be 49/100 of 1 vote, if allowed to vote at all since the non-thai owner does not control the majority of the shares. 

[Delight]

On 3/12/2021 at 8:20 PM, Thomas J said:

Is there anyplace where a person can see the actual law dealing with walled communities?  Also regarding the voting.  How can you vote on which method of voting to agree on, if there isn't a methodology agreed to prior to the vote.  
. 

 The condo act exisits because the IMF- who sanctioned a loan to Thailand -insisted on it.

The Thai gvernmnt  at the time  resisted it's implementation.

 

No Thai government has been put under any pressure to enact something similar for walled estates.

If such legislation did exists then I am certain that the land office would have the power to ensure that it was complied with.

Therefore  the only law that may be relevant is the law pertaining to the setting up of a Jusristic Person .

Suggest that  you speak with a company of accountants.

[malcolminthemiddle]

One vote per property. Only sold properties have the right to vote. Developer has no vote. Not less than 50% of total properties needed to pass resolution for JP. For example estate with 50 houses of which 25 have been sold needs 25/25 to meet minimum requirements.

[malcolminthemiddle]

On 3/12/2021 at 8:20 PM, Thomas J said:

Is there anyplace where a person can see the actual law dealing with walled communities?  Also regarding the voting.  How can you vote on which method of voting to agree on, if there isn't a methodology agreed to prior to the vote.  

Finally, do you or anyone else, know how voting works for properties owned by companies.  It would seem "logical" that there would be some form of resolution by each of the companies authorizing who can vote on behalf of the company.  Since the non-thai owner can not own more than 49% of the stock, it would seem that without a resolution or proxy by the other shareholders that the most the non-thai owner could cast would be 49/100 of 1 vote, if allowed to vote at all since the non-thai owner does not control the majority of the shares. 

Section 45 of the Land Development Act. Contact local Land Office for application form and specific supporting document requirements. 

[Thomas J]

5 minutes ago, malcolminthemiddle said:

Section 45 of the Land Development Act. Contact local Land Office for application form and specific supporting document requirements.

Thank you.  I have found the Land Development Act some time back but though it deals with the establishment of the Juristic Entity it does not spell out the procedures and requirements for its operation.  I am told but can't find any written documentation that it is 1 vote per Chanote and that in the case of a married couple either party can cast the 1 vote.  In terms of company owned properties I am told that it is 1 vote per Chanote and that there needs to be supporting papers from the company specifically authorizing who may vote on behalf of the company.  Finally, there are supposedly operational requirements such as a separate account for receipts and disbursements, a monthly income and expense statement distributed, and annual audit, and an annual balance sheet.  However though many have mentioned those as requirements I can find no place online anyway that documents that and gives a listing of all of the requirements. 

[malcolminthemiddle]

Quote

Thank you.  I have found the Land Development Act some time back but though it deals with the establishment of the Juristic Entity it does not spell out the procedures and requirements for its operation. 

Headings of procedures and requirements for JP operation are set out in items 1 to 7 of Section 45 and are to be included in an Articles of Association attached to the JP application. Typical A of A are available from most lawyers or you may find a sample online.

Quote

I am told but can't find any written documentation that it is 1 vote per Chanote and that in the case of a married couple either party can cast the 1 vote. 

One vote per Chanote. Only the person(s) or director with majority voting rights of company named as the owner on the Chanote can vote. If multiple owners are named on the Chanote they must all vote for the JP for the vote to count.

Quote

In terms of company owned properties I am told that it is 1 vote per Chanote and that there needs to be supporting papers from the company specifically authorizing who may vote on behalf of the company. 

All votes for the JP must be supported with documentation and included with the application to demonstrate the minimum number of valid votes has been achieved. A different specific set of documents is required for both individual and company owners.

Quote

Finally, there are supposedly operational requirements such as a separate account for receipts and disbursements, a monthly income and expense statement distributed, and annual audit, and an annual balance sheet. However, though many have mentioned those as requirements I can find no place online anyway that documents that and gives a listing of all of the requirements. 

The operational requirements before and after the establishment of the JP including maintenance fees, accounting and hand over of public facilities are to be found in the regulations prescribed by the Central Land Development Board mentioned in Sections 44 and 49. You may find these online or ask directly from your local land department. If you do manage to find them they will likely need translating.

If you are not experienced in these matters, I strongly suggest you contact a specialist who is. But first you should answer these two questions before embarking on what can be a long and difficult process without a guarantee for success.

1.     Do the majority of registered owners named on the Chanote want a JP?

2.     Does the Developer support the establishment of a JP? For example, because the Developer wants to be discharged from the duty to maintain the public facilities.

I hope this helps.

[mahjongguy]

One vote per chanote, but there is one twist that I know of.

The number of chanotes = the number of lots designated in the original development plan submitted to and approved by the Land Office. This number, which is not to include chanotes which may be created for common property (e.g. the streets, recreation area, an office building) is the number which must be used to determine quora, majority, and supermajority values. That number is fixed for all time.

So, if there is a largish lot and the owner gets Land Office permission to sever it, make it into two separately owned properties, then each of those two chanotes will only provide one-half of a vote. Forever. 

Likewise, in the unlikely event that two original chanotes are merged, the sole chanote that replaces them will have the total voting power of the originals (i.e. 2 votes).

Don't let anyone talk about the size of the property having any effect on the voting power of a chanote. Walled villages don't work that way.

The Land Act in its current revision, though not nearly as detailed as the Condo Act, has sufficient information to provide a group of like-minded homeowners with an idea of how to get started. They can put whatever details they want (structure, rules, regulations) into the Articles of Association.  

 

 

 

 

 

 

 

[chickenslegs]

Establishing a housing development (guide)2.doc

This is a translation of a Thai government issue guide from approx. 2008. I'm not sure whether it has been changed since then.

The relevant part regarding votes to establish the Juristic Entity is in Chapter 3(b)(1) - on page 5.

Quote:

  In casting votes, the land development purchasers of each lot shall be entitled to cast one vote.  And, if the sub-divided lots were further divided according to the approved project plan, the individuals holding rights to the remaining lots and sub-divided lots shall be deemed to jointly possess one vote just as joint owners.)

OP may find the guide useful, but remember that it is a translation and is a few years old.

 

[chickenslegs]

3 minutes ago, chickenslegs said:

Establishing a housing development (guide)2.doc 325.41 kB · 0 downloads

This is a translation of a Thai government issue guide from approx. 2008. I'm not sure whether it has been changed since then.

The relevant part regarding votes to establish the Juristic Entity is in Chapter 3(b)(1) - on page 5.

Quote:

  In casting votes, the land development purchasers of each lot shall be entitled to cast one vote.  And, if the sub-divided lots were further divided according to the approved project plan, the individuals holding rights to the remaining lots and sub-divided lots shall be deemed to jointly possess one vote just as joint owners.)

OP may find the guide useful, but remember that it is a translation and is a few years old.

 

 

Here is the Guide in Thai language.(TH) Establishing a Housing Development.zip

[malcolminthemiddle]

Here's a related question. When is The Developer obliged to start paying maintenance fees on unsold plots?

[Thomas J]

4 hours ago, malcolminthemiddle said:

1.     Do the majority of registered owners named on the Chanote want a JP?

Thank you for your excellent response.  The village here has been in existence for over 13 years, is totally sold out and the developer has long since vacated anything to do with the property.  For many years the development had a legal entity and it was operated properly.  

Back in 2012 was the last time the land office shows the entity was legally filed.  At that time one woman took the lead, became "president" and control of the village.  However she never took the steps to form the legal entity.  In recent months a controversy has arisen.  This women now serving for over 8 years has never maintained a separate bank account, is requesting all monies be paid in cash and all expenses likewise paid in cash.  Some monies from bank foreclosed homes have been deposited electronically into her personal account. No income/expense statements have ever been generated, no audit, no balance sheet etc.  The woman who with her husband and two children lives with her father and upon further investigation it has been
confirmed she owns no property.  Her father is the sole party listed on the Chanote. 

The vast majority of the people in the village would like to have a Juristic Person, including us provided that it was operating legally and totally above board.  After our investigation the land office contacted her and told her she had to correct the situation.  She held a meeting of the owners and ballots were passed out.  My fiancé owns the home outright and she received 1 ballot slip  We saw that other properties with husband & wife received two ballot slips. Further we witnessed that company owned properties received multiple slips for the husband/wife living in the homes despite the fact that none of them are Thai and therefore they could not be the majority owner.  We can not ascertain if there was any documentation to establish who was authorized to vote on behalf of the company.  We "suspect" that these companies were established with the non-thai being the 49% owner and that the law office obtained totally unrelated Thai citizens to place as the other 51% owners.   

So that we speak correctly, we are trying to establish exactly what is the correct procedure to vote for the JP, and the duties and responsibilities of the JP.  The land office has already told us that they will not approve the current minutes given that the party once again elected as president did so while representing herself as an "owner" of a specific Chanote which the land office has verified is totally untrue. 

[mahjongguy]

- How many homes are there?

- Are there 5 or 6 owners who would be willing and suitable to serve on the village committee?

- Is there one among them who is likely to enjoy and excel in a leadership role as President?

- Is there a separate homeowner who would serve as the Juristic Person Manager?  The Juristic Person Manager has a small job. He/she holds the stamps that certify invoices, receipts. They act solely as directed by the Committee. They must be a homeowner and it's beneficial if they serve on the Committee.

- If there are fewer than 100 homes, there may not be enough activity to justify a full time Business Manager. In that case, a handful of volunteers may suffice. People who collectively handle banking, hiring and firing, accounting, etc.

Never ever have one person serve as the Juristic Person Manager and as the Business Manager. So many condos do this, and the inevitable result is embezzlement. You let that one person have control of the bank accounts and let them do the accounting. After a year or two of setting everything up, poof, off they go.

 

[Thomas J]

35 minutes ago, mahjongguy said:

How many homes are there?

- Are there 5 or 6 owners who would be willing and suitable to serve on the village committee?

- Is there one among them who is likely to enjoy and excel in a leadership role as President?

- Is there a separate homeowner who would serve as the Juristic Person Manager?  The Juristic Person Manager has a small job. He/she holds the stamps that certify invoices, receipts. They act solely as directed by the Committee. They must be a homeowner and it's beneficial if they serve on the Committee.

Unfortunately there are only 29 properties in the walled community and many of those are from owners who live in other countries  4 of them are vacant owned by the banks that foreclosed on them in some cases a decade ago. 

There probably are 6 people who would be willing to serve on the board.  However the job of directing work to be done is not a wonderful job and there are not a lot of people if any with their hands up to 'be president"   I believe the best answer is to engage a third party who is knowledgeable about the reporting, legal, and filings with the land office and to have someone within the community do the accounting.  

One way or another, all monies should be deposited into a separate community account and whenever possible require that the payments for the dues go directly to that account electronically.  As for disbursements I can't think of a single instance in today's world where a person/company would require cash.  Those payments should without question be made electronically and supported with an invoice even if it is hand written.  

Right now with the one person controlling all of the receipts mostly in cash and making all of the payments in cash there is zero accountability and there really is no way of performing an audit.  There is no account to balance, no third party recording receipts and disbursements etc. 
 

 

[malcolminthemiddle]

17 hours ago, Thomas J said:

Thank you for your excellent response.  The village here has been in existence for over 13 years, is totally sold out and the developer has long since vacated anything to do with the property.  For many years the development had a legal entity and it was operated properly.  .................

The Developer is legally responsible to manage and maintain the common facilities until discharged. Only an authorised legal entity approved by the Land Department has the power to levy a maintenance fee. From your message I understand the Developer has never been discharged and this self-appointed lady does not have the authority to collect maintenance fees? She has been found out and her application to establish a JP has been rightly rejected by the Land Department because it is non-compliant?

Here is my suggestion.

1.     Conduct a survey and form an informal group of like-minded owners who want to establish a JP.

2.     Establish a pot of money by asking group members to pay their next annual maintenance fee in advance on the understanding that the JP is not guaranteed.

3.     Appoint a lawyer experienced in these matters.

4.     The lawyer should write to the Developer asking him to confirm in writing to the Land Department that he wants to be discharged from his duty to maintain and manage the common facilities.

5.     Confirm with the Land Department the process and supporting documents needed for a JP application.

6.     Follow the process and make a JP application.

You can worry about the operation of the JP later.

Some other points.

·       Having the Developer confirm that he wants to be discharged is key. Without his confirmation a JP is still possible but the process is much more difficult.

·       There may well be some relaxation of the requirement for all Owners to attend the resolution meeting during these COVID times, so hurry up.

·       You can worry about the operation of the JP later.

Where is your village located?

I hope this helps.

[malcolminthemiddle]

17 hours ago, Thomas J said:

Unfortunately there are only 29 properties in the walled community and many of those are from owners who live in other countries  4 of them are vacant owned by the banks that foreclosed on them in some cases a decade ago. ..........................
 

 

You will need a minimum of 15 confirmed votes with supporting documentation for the JP resolution.

The minimum number of 3 members allowed is recommended. On a small estate once the annual budget is set, subcontractors appointed for the main activities of gardening and security with the fees invoiced and collected once a year managing the JP is quite straightforward………… until there is a dispute.

The Committee should open and administer a designated bank account in the name of the JP. The Committee members should all be registered signatories with the bank. The Committee members should all receive automatic notification of banking withdrawals, payments and transactions at the time of those transactions.

All income should be paid directly into the bank account. All expenses should be paid from the bank account. An ATM Card should be attached to the account to facilitate cash withdrawals and inter-bank transfers together with an I-Banking App for similar activities. As a further safeguard the bank book should be updated and available at all meetings.

The Committee should propose an annual budget to the Members to vote on at the AGM. The approved budget which shall be displayed in a public place in the office as required by Thai law.

At each AGM, the Committee shall provide the Members with a set of accounts, following accepted accounting practices.

The current situation with one, unauthorised self-appointed person is unlawful. Under normal conditions keeping monthly accounts are mandatory and a part of the process when the Developer is discharged and the common facilities handed over to the JP. You may have to forego this right to get your JP.

I hope this helps.

[Delight]

1 hour ago, malcolminthemiddle said:

The Developer is legally responsible to manage and maintain the common facilities until discharged. Only an authorised legal entity approved by the Land Department has the power to levy a maintenance fee. From your message I understand the Developer has never been discharged and this self-appointed lady does not have the authority to collect maintenance fees? She has been found out and her application to establish a JP has been rightly rejected by the Land Department because it is non-compliant?

Can you quote the source of your statements pertaining to Thai law?

[malcolminthemiddle]

11 minutes ago, Delight said:

Can you quote the source of your statements pertaining to Thai law?

Land Development Act

Duty to maintain is Section 43.

Discharge is Section 44.

Authority to levy fee is Section 49.

[Smokin Joe]

Here is the Thai Government web site with the English translations of Thai laws

Thai Laws - English Translations

 

Condominium Act (1979 with 2008 update)

[Thomas J]

29 minutes ago, malcolminthemiddle said:

The current situation with one, unauthorised self-appointed person is unlawful.

Thank you very much for your comments and information.  Yes we are aware that the current situation is unlawful.  We do find it "strange" here in Thailand there is the law on how to establish a JP and rules for operating as a JP.  However, if those rules are not followed even though illegal the government (land office) does nothing to enforce, penalize, or sanction the parties not following the law. 

It is clear that this person has broken numerous portions of the various laws governing walled estates the most egregious being on the board acting as president despite not being on the Chanote plus comingling the monies received with her personal account. 

We are aware the land office will reject her request to form the JP and inform her it needs to be done again.  This time correctly.  Given that this will be the second time, it is the final time that it can be done.  If not done correctly this time, there can be no JP.  That is why we are trying to determine exactly what has to be done to make sure all the rules are followed. 

[malcolminthemiddle]

2 minutes ago, Thomas J said:

Thank you very much for your comments and information.  Yes we are aware that the current situation is unlawful.  We do find it "strange" here in Thailand there is the law on how to establish a JP and rules for operating as a JP.  However, if those rules are not followed even though illegal the government (land office) does nothing to enforce, penalize, or sanction the parties not following the law. 

It is clear that this person has broken numerous portions of the various laws governing walled estates the most egregious being on the board acting as president despite not being on the Chanote plus comingling the monies received with her personal account. 

We are aware the land office will reject her request to form the JP and inform her it needs to be done again.  This time correctly.  Given that this will be the second time, it is the final time that it can be done.  If not done correctly this time, there can be no JP.  That is why we are trying to determine exactly what has to be done to make sure all the rules are followed. 

I am unaware of any limits on the number of JP applications. Over time, circumstances and owners change.

[Thomas J]

3 minutes ago, malcolminthemiddle said:

am unaware of any limits on the number of JP applications.

The land officer and another party who manages walled communities said the same thing.  You can apply to form a JP twice.  The notice has to be sent a minimum of 15 days prior to the meeting to vote on the JP.  A minimum of 50% of the properties have to be present or vote by proxy in order to form the JP.  If the first attempt fails, one more attempt can be made to form the JP.  If that also fails, then a JP can not be formed. 

Since this village let its entity lapse by not correctly transferring it to a new board and president within 6 months of the prior board/president vacating it is like starting over from scratch.   There is no limit as to the number of times the entity can be extended but to create it, that process can only be done a maximum number of 2 times and if not approved by the land office that option is shut for good. 

[malcolminthemiddle]

22 hours ago, Thomas J said:

The land officer and another party who manages walled communities said the same thing.  You can apply to form a JP twice.  The notice has to be sent a minimum of 15 days prior to the meeting to vote on the JP.  A minimum of 50% of the properties have to be present or vote by proxy in order to form the JP.  If the first attempt fails, one more attempt can be made to form the JP.  If that also fails, then a JP can not be formed. 

Since this village let its entity lapse by not correctly transferring it to a new board and president within 6 months of the prior board/president vacating it is like starting over from scratch.   There is no limit as to the number of times the entity can be extended but to create it, that process can only be done a maximum number of 2 times and if not approved by the land office that option is shut for good. 

An application which has not been rejected, cancelled or expired can be corrected and re-submitted if it is found to be non-compliant, but it can only be re-submitted once.

There are a number of different time limits throughout the application process. The JP application shall be submitted within 30 days of the resolution meeting. The 15 days you mention is the time given to correct a non-compliant application. The 180 days you mention is the minimum time allowed between the Developers notice and the transfer of common facilities to the JP.

As mentioned previously, I am unaware of any legislation that would prevent a new resolution meeting and subsequent JP application after a previous application failed.

[Thomas J]

On 3/19/2021 at 3:15 PM, malcolminthemiddle said:

am unaware of any limits on the number of JP applications. Over time, circumstances and owners change.

Malcolminthemiddle,

Just wanted you to know, you were correct.  The land officer as it turns out was speaking that each time an application is submitted there is one chance to correct it.  So the same application is limited to twice.  However, having failed two times, you start over, require yet another vote and start the process again.  There is no limit on the number of times the JP can be put up to vote, which makes sense. 

 

[malcolminthemiddle]

59 minutes ago, Thomas J said:

Malcolminthemiddle,

Just wanted you to know, you were correct.  The land officer as it turns out was speaking that each time an application is submitted there is one chance to correct it.  So the same application is limited to twice.  However, having failed two times, you start over, require yet another vote and start the process again.  There is no limit on the number of times the JP can be put up to vote, which makes sense. 

 

 

Try and find copies of previous JP applications. In particular the notice from the Developer that he wants to be discharged. If you find that then check with the land officer whether it is still valid. The law defines the 180 days as the minimum time for transfer after the notice. I am unaware of any maximum time limit. If you can find a valid Developer notice you then have to worry only about the resolution meeting and new JP application.