Will I Get My Money Back ?

[ThaiPauly]

You may find this interesting reading.

I brought a Condo off-plan 18 months ago in the Sukhumvit region. The unit was supposed to be ready for occupation in January this year.

They are now saying January next year!

I had a clause in my contract saying that if it was not complete by the end of April I would get my deposit back plus 15% interest.

Having now invoked the clause the developers are saying that they realise I have this clause ,but do not have the money to repay the deposit all at once and asked if it could it be paid over a period of time?...to quote their Lawyer he said "The Company is in trouble"

I suggested that if they returned the full amount of deposit paid I would drop the claim for interest, to which he replied that the owners were not to worried about paying the interest.... I suspect this is because they can pay NOTHING! They are broke IMO. Would you think the same or not?

Half of the development...and its a big 320 unit condo (it's two towers) is completed and occupied, my half is not and all work seems to have halted, judging by what I see on skyscrapercity.com, nothing seems to have ben done on my tower this year...I suspect they have been busy getting Towe One completed for occupation. I know someone that knows someone who has paid 15m Baht for the Penthouse in the first tower and has moved in, so its not as if nobody is living in it.

I have an appointment to see their Lawyer in a couple of weeks to sort it out, but have told him that I need to know his proposal before I go all the way to BK.

I am considering taking a Lawyer as well. Is it worth the cost, or is it a case of "Good money after bad"

My worry is that as they seemingly have no money, they will go into liquidation and the bank selll the rest of he project to another developer...if that happens then all deposits would be null and void I think.....I am very glad I only put down a deposit on a small one......oh yes ..and he also said that because we were "Good Customers and paid all our deposits at the corret time they wanted to keep us happy"...I smell bullshit here and loads of it....we don't WANT to be customers.

Those of you who are in the know in these matters may be able to give me a clue as to what I can realistically expect?

Call me a <deleted> for buying off-plan by all means , that goes with the territory of asking this question, but the property market was quite healthy 18 months ago...and they had already complleted one of the towers, so it seemed a "Good Idea at the time"

I have intetionally left out the name of this Condo for now, but some of you already know which one it is, but I won't confirm it at this stage.

TP

[Torv]

I'd like to know what Condo you're talking about as I'm also looking to buy one for my mom to retire in.

This seems very fishy indeed and I don't think there's any doubt that they actually have no money. I think anything that could be done must be done now as these condo's people are pretty shrewed. I don't know much or at all about the rules of laws in Thailand, but I suggest you should get out of this as fast as you can.

I also suggest talking to the developer's lawyer first and read some fine prints. Aren't the contracts/incentives transferrable if they're overtaken by some other developers? Sure would make sense if it does. I'd also contemplate on getting a lawyer of your own and let the crooks talk it out in your favor but it the cost exceeds the legal fees then it definitely is not worth it.

If you deal your card right however, I think you can get extra incentives/benefits out of this.

Is the developer reputable at least?

[Mobi]

TP, I know lawyers don't come that cheap, but I would definitely take a good lawyer with you, or at the very least, refer any offers are made to a lawyer to follow up on your behalf.

Good money after bad? Possibly - but you will kick yourself if you didn't do everything possible to recover your funds.

Hope it gets sorted.

[vegas]

I heard from the secretary of the MD of one of the big developers that ths sort of thing is happening everywhere. Condos, townhouses, houses everywhere are planned but there is no money to complete them. Even those that have reserved them with a deposit can't afford to pay them off.

Now developers are saying that 2008 will be a huge year for real estate cos they have already righted off 2007. Great attitude and very Thai. I can see another crash coming.

[Gary A]

I think that eventually you will get something back if the development isn't finished. The big problem is WHEN ?! There are still unfinished developments from the last economic bust and as far as I know, some of those are still not settled. Good luck.

[bkkandrew]

I think that it would be right to reveal the name of the Condo, as their financial mess may extend to attempts to prise deposits from unsuspecting TV members...

Also to vegas, for the same reason, do you have any concrete info on your assertions?

[sohoproperties]

You may find this interesting reading.

I brought a Condo off-plan 18 months ago in the Sukhumvit region. The unit was supposed to be ready for occupation in January this year.

They are now saying January next year!

I had a clause in my contract saying that if it was not complete by the end of April I would get my deposit back plus 15% interest.

Having now invoked the clause the developers are saying that they realise I have this clause ,but do not have the money to repay the deposit all at once and asked if it could it be paid over a period of time?...to quote their Lawyer he said "The Company is in trouble"

I suggested that if they returned the full amount of deposit paid I would drop the claim for interest, to which he replied that the owners were not to worried about paying the interest.... I suspect this is because they can pay NOTHING! They are broke IMO. Would you think the same or not?

Half of the development...and its a big 320 unit condo (it's two towers) is completed and occupied, my half is not and all work seems to have halted, judging by what I see on skyscrapercity.com, nothing seems to have ben done on my tower this year...I suspect they have been busy getting Towe One completed for occupation. I know someone that knows someone who has paid 15m Baht for the Penthouse in the first tower and has moved in, so its not as if nobody is living in it.

I have an appointment to see their Lawyer in a couple of weeks to sort it out, but have told him that I need to know his proposal before I go all the way to BK.

I am considering taking a Lawyer as well. Is it worth the cost, or is it a case of "Good money after bad"

My worry is that as they seemingly have no money, they will go into liquidation and the bank selll the rest of he project to another developer...if that happens then all deposits would be null and void I think.....I am very glad I only put down a deposit on a small one......oh yes ..and he also said that because we were "Good Customers and paid all our deposits at the corret time they wanted to keep us happy"...I smell bullshit here and loads of it....we don't WANT to be customers.

Those of you who are in the know in these matters may be able to give me a clue as to what I can realistically expect?

Call me a <deleted> for buying off-plan by all means , that goes with the territory of asking this question, but the property market was quite healthy 18 months ago...and they had already complleted one of the towers, so it seemed a "Good Idea at the time"

I have intetionally left out the name of this Condo for now, but some of you already know which one it is, but I won't confirm it at this stage.

TP

Thailand has always been notorious for devlopments going pan up and not paying deposits back. I think that if the company is in trouble the courts may award you compensation but if the company has no money the chances of you getting anything back are slim to non existent. It is very unwise here to buy anything off plan unless the company has been backed by the bank fully. Some banks guarantee funding only when X amount of the condos have been sold so if they are'nt successful in selling a major portion at the front end of the project they don't get funded. The moral is buy finished products only as even the specs on a finished building are'nt guaranteed .

Edited June 23, 2007 by Totster
Removed links

[Livinginexile]

Brother...I hear you.

I hold a contract and paid my deposit at Trendy Condo's. Sukumvit Soi 13. It was suposed to have been completed January last year and is running 18 mths late.

The developer would never give me clear answers and as to why construction had halted or delayed and allways gave me some cock and bull story about delays, weather, change of contractors, etc, etc, etc.

I almost gave up a few months back, I was basically in the same position you are in now, but I hung in there a little longer.

Suddenly they started work again and the development now looks allmost complete.

Are you sure they will not re-start construction?

A little more info about the project and the developer would help.

What is the name of your building? and where?

[cclub75]

You should reveal the name of this company. Because, it's clearly a bad one.

What are they doing is nothing less than a ponzi or pyramid scheme : using the money of the deposits to pay the day to day work...

If a company doesn't have the money to start and to finish a project, then it's not healthy. Of course, nobody notices, it's working fine when the market is "booming", nonetheless it's a trick. A dangerous one.

And when the market is... without clear direction, like now.... then the ponzi scheme reveals its hideous face. Problems can occur.

And what about the Trendy ? Up location, up building, up name... Mo my, we heard a lot about this place. And 18 month late ? What kind of developer is that ?

I mean the people who bought there seems to be "relieved" to have "only" 18 month delays. What a strange inversion of values.

[ThaiPauly]

You should reveal the name of this company. Because, it's clearly a bad one.

The Condo is Vista Garden..Suk Soi 71.

[cmsally]

Looking at their website, you might have more luck if you speak Japanese!

But on the other hand if they have really pushed it that much to that market, you could check any Japanese business organisations/assoc even the trade dept of the Embassy to see if they have complaints against this company.

[ThaiPauly]

Looking at their website, you might have more luck if you speak Japanese!

But on the other hand if they have really pushed it that much to that market, you could check any Japanese business organisations/assoc even the trade dept of the Embassy to see if they have complaints against this company.

The fact that it is a mainly a Japanese owned organisation makes it all the more surprising that they are in this situation.

The majority of buyers are Japanese Businessmen who don't take this kind of thing happening to them lying down

When I goodgled Vista Garden I came across a Thai Website that had about 10 units for sale on it.

I personally tried to sell it myself before taking steps to recover my money but could not find an agent who would respond to me because its only a 3m Baht Condo

[bingobongo]

thank you for this thread, it further confirms that the real estate market is on life support and will get worse......no rainbows here

regardless, here is an article on a court case regarding a farang who sued developer for promises once deposit was paid......good luck.......you may need it

i guess more concrete shells........

False advertising ploys of real estate developers

The soft target is always foreign property buyers who are gullible by their ignorance. The ignorance is not the stupidity but the lack of knowledge. Only wisdom can lead you to the road of justice not perdition. Even “Truth is stranger than Fiction” but only the truth will set you free from any dilemmas.

http://www.pattayatoday.net/index.php?acti...ews&id=2333

[cmsally]

Try this website, it's a forum for condo owners (mostly in Thai, so get translator ready if you need).

Vista Sukhumvit

There are some very unhappy condo buyers on here and I think you will find a sympathetic ear, maybe even a legal action in numbers. There are rumours on there about legal problems with the land and splitting up areas - doesn't go into detail.

Seems latest action is to split up chanote for towers B & C. Although this seems to bode well for tower B who seem to be getting things done, I doubt this bodes well for tower C which according to forum is at a standstill. I smell a rat in that they might be bailing out on the C part but getting tower B done 100% to keep at least those customers happy.

[chuchok]

CONDOMINIUM: Vista Garden site nears completion

Published on June 19, 2006 - Prices almost double from 2004 when project was launched

Originally scheduled for completion this month, the Vista Garden's Tower 1 is running a little late, but only just.

Its buyers are probably relieved to see the 16-floor structure nearing completion. Sales staff expect an August or September completion.

In a market where buying "off-plan" projects, or real-estate units on paper, can be a harrowing experience, Vista Garden has demonstrated it can deliver its products more or less within an acceptable time frame.

Meanwhile, prices of its units have almost doubled.

Today, the firm is charging Bt2.99 million for the smallest 47-square-metre one-bedroom unit on the lowest floors. That comes to more than B60,000 a square metre.

Originally, a one-bedroom unit went for Bt1.67 million, or Bt35,000 a square metre, less than two years ago.

The first tower is almost sold out, said sales staff. The 22-floor Tower 2, which shares a podium with Tower 1, is about one year away from completion.

The project houses 285 mid-end condominiums on a 3-rai plot. The developer owns other plots, and there is a possibility more towers may go up in the area if this project proves successful.

With its current price tag, Vista Garden is today one of the more expensive projects beyond Sukhumvit Soi 63 (Soi Ekamai), a border many realty firms use in separating prime inner-city sites from the less-exclusive outer suburbs.

Heavy competition has been seen in the past year in these outer areas, such as Sukhumvit Soi 77 and Soi 101/1. These sites sell units for far less: less than Bt1.6 million for a one-bedroom. They are being offered by LPN, Supalai and Plus Property Partners.

Considering that Vista spends frugally on marketing expenses, the margins it commands appear hefty.

It has hired Harrison Realty Agency to provide a professional sales team that is competent, courteous and informed, which should help its image.

Visitors will note that its location is tucked deep inside a low-income community with a bustling market area forming an anchor for residents.

As such, it is quite common to find people going about in pyjamas in broad daylight, shopping for sundries and food from street vendors.

But unlike the horrid tourist area of lower Sukhumvit, the vendors here tend to be more orderly, and thus littering and foul garbage, at least during a recent visit, is almost non-existent.

Still, Vista Garden is quite a distance to get to on foot. If home-buyers are going by car, it may be better to use the back way, cutting off from the Phra Khanong Bridge, veering left and turning left again before the tollgate.

Traffic congestion here is chronic, but compared with the horrendous daily jams in Sukhumvit Soi 62 and Soi 101/1 and Soi 103 (Soi Udomsuk) or the Prompong, Asoke and Nana areas, it is not much worse.

There are two models available at the site: a one-bedroom (47 square metres) and a two-bedroom (74 square metres).

Current prices for a one-bedroom include a kitchen set and two air-conditioners, but no built-in or free-standing furniture. The first three floors of the building are a carpark, but buyers are not assigned fixed parking spaces.

Recreational facilities are on the third floor and include a swimming pool and clubhouse.

Itthi C Tan

The Nation

[cmsally]

Visitors will note that its location is tucked deep inside a low-income community with a bustling market area forming an anchor for residents.

As such, it is quite common to find people going about in pyjamas in broad daylight, shopping for sundries and food from street vendors.

But unlike the horrid tourist area of lower Sukhumvit, the vendors here tend to be more orderly, and thus littering and foul garbage, at least during a recent visit, is almost non-existent.

:D

[dong]

You should reveal the name of this company. Because, it's clearly a bad one.

The Condo is Vista Garden..Suk Soi 71.

I looked at buying there last year,, opted for some thing cheaper and already completed at bangna

[Fletcher]

Definitely get a lawyer involved, and first off, get them to review your written correspondence with the developer to ensure that your 'Notice of Cancellation' complies with the legal requirements.

Also I presume you signed a contract in English. Make sure you get the thai original version of the contract from the developer. From experience I have found that there will be differences, and was advised that if it gets as far as court, the thai version (whether signed or not) will be the one that a court decision will be based on.

Given your developers responses so far, it seems to me that it might be time to up the ante, threats of legal action from a lawyer, may be what is required to get your money back speedily.

My condo is over 18 months late, and I am going through the same process of cancellation, as I expect the market to significantly devalue, both through property values but also due to exchange rate adjustments.

When I bought off the plan, ability to complete was one of my main concerns, I was reassured by the agent (a major int'l agency) that they had required the developer to put up a bond, to ensure investors would get their money back in case of disaster. At least by buying through an int'l agent, I will have two legal avenues that I can follow, if I encounter problems in getting the funds back. I guess time will tell !!

[thaigene2]

Yes well..that news report from one year ago is typical of the bl+w job reporting that goes on in bangkok newspapers about Thai real estate (or hey - any other seller of material consumer goods for that matter). There is no such thing as unbiased 'news' reporting here it would seem (just read the Nation's coverage of the coup/TRT for evidence of that).

Oh...and where's BACKFLIP when you need his sneery jibes about how no one has lost anything in the real estate market here? I Guess ThaiPauly and those other people are just stupid and had it coming...is that it? No way...as said above in many posts the house of cards is collapsing due to the pyramid scheme of 'deposit' payers waiting to flip to someone else (not you Thai Pauly) but all your "neighbours" that never planned to actually live there from the get-go!

[vegas]

I think that it would be right to reveal the name of the Condo, as their financial mess may extend to attempts to prise deposits from unsuspecting TV members...

Also to vegas, for the same reason, do you have any concrete info on your assertions?

Concrete? I suppose I could as the guy for a sworn statement, otherwise no. My missus works for a interior design company, so they are in the business. It's not Noi at the som tam stall, who heard it from her neice, who heard it from a stranger on a bus. This was directly from a colleague whose wife is the secretary to the Director. When projects screech to a halt all over Bangkok, it is fairly obvious that they are out of money.

[ThaiPauly]

I have spoken to them again.

They have said they are prepared to pay me back in three momthly stages if I drop the claim for interest...thats a step in the rght direction but I have yet to see the offer in writing .

They said they would send it by next Friday.

I will keep you posted.

[torrenova]

I have some friends who were interested in that Ocean 1 Tower in Pattaya. The prices were high over 18 months ago but the interesting thing was the get out clause if completion was not finished by XYZ date then you got your money back, no interest, just money back.

Now being sceptical about a 91 story condo block being bult on the beach by Thais I crunched some numbers. If there were 611 units with an average of 150 m2 and Bt100,000 per M2 and 25% deposit paid, that would equate to about 1.3 bn baht which at 5% interest brings in circa 115 mn baht pa which is about 3.4 million USD. Forgive me but perhaps this is just a long wind up.

The fact is that most developers don't have the cash to fund the project. They get around this by giving various contributors slices of the action in return for assets or services. Something like this:

The developer wants the land but cannot afford it, so the owner of the land gets XYZ number of condos in exchange. Architects also get some, as do the people marketing the scheme. Investors get their share as well as do the interior designers, lawyers and advertising people. Add in builders and the like and you see that it is feasible to build a development with almost zero capital if you get everyone else to chip in.

[ThaiPauly]

I have some friends who were interested in that Ocean 1 Tower in Pattaya. The prices were high over 18 months ago but the interesting thing was the get out clause if completion was not finished by XYZ date then you got your money back, no interest, just money back.

Now being sceptical about a 91 story condo block being bult on the beach by Thais I crunched some numbers. If there were 611 units with an average of 150 m2 and Bt100,000 per M2 and 25% deposit paid, that would equate to about 1.3 bn baht which at 5% interest brings in circa 115 mn baht pa which is about 3.4 million USD. Forgive me but perhaps this is just a long wind up.

The fact is that most developers don't have the cash to fund the project. They get around this by giving various contributors slices of the action in return for assets or services. Something like this:

The developer wants the land but cannot afford it, so the owner of the land gets XYZ number of condos in exchange. Architects also get some, as do the people marketing the scheme. Investors get their share as well as do the interior designers, lawyers and advertising people. Add in builders and the like and you see that it is feasible to build a development with almost zero capital if you get everyone else to chip in.

An interesting theory.

However I know it does not apply to this company. They are a Thai-Japanese Company, most of the condos have been sold to Japs one way or another. There was no "Get Out Clause" in the oiginal contract, I put that in myself much to their chargrin.

[quiksilva]

The fact is that most developers don't have the cash to fund the project. They get around this by giving various contributors slices of the action in return for assets or services. Something like this:

The developer wants the land but cannot afford it, so the owner of the land gets XYZ number of condos in exchange. Architects also get some, as do the people marketing the scheme. Investors get their share as well as do the interior designers, lawyers and advertising people. Add in builders and the like and you see that it is feasible to build a development with almost zero capital if you get everyone else to chip in.

Sounds more like a conspiracy theory to me. I have never heard of anything like that happening, recently (pre-1997 perhaps but not recently), however if you have got any names to drop, let us know and I'll check.

Independent consultants, such as architects and marketers etc. wouldn't accept payment in kind, they all want cash. If they do they won't last long I'm sure if a developer offered that to us we'd say no thanks and walk into the next project.

Anyway if the developer can't afford land, which bank would finance construction?

Developers can't get loans to buy land, so some may raise capital through the SET or may indeed seek external investors to acquire certain sites (eg ING (IP) investing into Raimon Land's '"The Lakes" in return for x% mark up on condos of equivalent value allocated to the fund. But not architects, lawyers or agents. This group is small fry.

Developers can get financing on construction (secured by the land) which in some cases can be up to 100%, based on solid fundamentals backed up by feasibility studies and pre-sales activity. In any event this may only be given the green light once pre-completion sales pass a certain milestone (typically >60%, ~ break even), at which point construction may commence.

If that doesn't happen, there should be contractual provisions for that, whether they will honour those however is anyone's guess. It all boils down to the people involved.

I hope it works out for you TP!

[gust]

I have spoken to them again.

They have said they are prepared to pay me back in three momthly stages if I drop the claim for interest...thats a step in the rght direction but I have yet to see the offer in writing .

They said they would send it by next Friday.

I will keep you posted.

If it works out like this, even without the interest, you should have made around 13% on the rise of the Baht. Not so bad after all...

[odjman]

What a brand new Nation blog lol!

Is it for advertising and lure people into the LOS or concrete discussion here?

Looks like all the nice chaps posting b4 don't appear here anymore!!!

Anyway, regarding the topic 'Will I Get My Money Back?, haven't you understood yet what happened in 97...?

Story 2 on its way

[ThaiPauly]

Well the deadline for them sending out a letter of intent has come and gone.

Watch this space !

[ThaiPauly]

They have contacted me by e-mail and said they are raising 4 post dated cheques with the frst one due 1st August.

so at least I have an addmission of liability.

But no cheques yet !

[Mobi]

They have contacted me by e-mail and said they are raising 4 post dated cheques with the frst one due 1st August.

so at least I have an addmission of liability.

But no cheques yet !

As you are no doubt aware - cheques are a pretty serious business in Thailand. The issuers of bounced cheques can be locked up in double quick time, so when you get hold of them, hang on to them.

Hope it all works out.

[quiksilva]

Keep the pressure on, whilst they might be slow it does seem to be progressing.

Good luck with it!