Advice / help needed: Condo purchase (not built yet), 'non-refundable' deposit, failure to inform of FET

[The Contrarian]

Dear ASEAN Now,

Hoping to get some advice here. One of my friends, a foreigner, paid a deposit for a condo unit. It's one of those 'presale' units that has not even begun construction and won't be completed for a few years.

Since purchase there has been a few issues surfacing. One being multiple delays to the purchase agreement without specific reasons, and one being that he was never informed of the FET.

The deposit was thus sent to the developers via a direct bank transfer. The developers nor agents have mentioned the FET matters nor raised any issues. 

He's now quite concerned, and already tried asking for a refund of the deposit. The tertiary sales agent are insisting 'no refunds' because the reservation form claimed this policy to be enforceable short of regulatory issues etc.

My questions:

1. Should he be concerned that the deposit was sent via direct bank transfer? Does he really need to redo the entire process?

2. If he would like to get a refund now, how best to go about this? A lawyer has mentioned that contrary to his agent's claims, 'one way benefit' contracts are unfair and unenforceable under both the CPA and TCA. But I'm not sure how accurate this is. He is also hoping to preferably resolve this amicably without legal or PR escalation.

Thank you for any advice and suggestions. Would also appreciate any recommendations for further reading or resources that may help him.

Sincerely,
T.C.

[OneMoreFarang]

How much did he pay? Can he afford to write that off?

Does the company which he paid has any money? Because what is the point to hire and pay a lawyer and maybe after years get a verdict that he should get the money back but there is no money.

 

I guess he learned an important lesson: Don't make "investments" like that. 

[Mike Lister]

Your friend made a pretty basic mistake, it appears he did no research whatsoever into the country or the financial rules et al, ouch.

[The Contrarian]

thank you both for your replies OneMoreFarang and Mike. I agree with both your points. Hopefully he will learn from this experience.

The deposit was a few hundred thousand I believe, so not the end of the world but a rather sizeable sum for a deposit if you ask me. And along with the FET issue and more pending payments coming, he is slightly concerned to say the least.

Re FET, nothing was mentioned to him by either the agent or developer. I don't have much experience with purchasing condos here. But I'm also concerned for him that this will cause problems later. Not sure how he should go about this short of asking for a refund ASAP and starting over.

Also apparently, he was convinced to buy the unit because his agent told him that she also personally bought a place in the same building. herself. True or not, she sounds rather charming.

Edited December 15, 2023 by The Contrarian
addenum

[champers]

High risk for; presumably; high return.

If this is a one-off purchase it will hurt; if he is a regular investor using this method he will see it as an occupational hazard but will likely be up in the long-term.

I guess digging deep into the developer's background before committing financially is the key.

[freeworld]

2 hours ago, The Contrarian said:

Dear ASEAN Now,

Hoping to get some advice here. One of my friends, a foreigner, paid a deposit for a condo unit. It's one of those 'presale' units that has not even begun construction and won't be completed for a few years.

Since purchase there has been a few issues surfacing. One being multiple delays to the purchase agreement without specific reasons, and one being that he was never informed of the FET.

The deposit was thus sent to the developers via a direct bank transfer. The developers nor agents have mentioned the FET matters nor raised any issues. 

He's now quite concerned, and already tried asking for a refund of the deposit. The tertiary sales agent are insisting 'no refunds' because the reservation form claimed this policy to be enforceable short of regulatory issues etc.

My questions:

1. Should he be concerned that the deposit was sent via direct bank transfer? Does he really need to redo the entire process?

2. If he would like to get a refund now, how best to go about this? A lawyer has mentioned that contrary to his agent's claims, 'one way benefit' contracts are unfair and unenforceable under both the CPA and TCA. But I'm not sure how accurate this is. He is also hoping to preferably resolve this amicably without legal or PR escalation.

Thank you for any advice and suggestions. Would also appreciate any recommendations for further reading or resources that may help him.

Sincerely,
T.C.

A few hundred thousand is a lot of money to lose.

 

Was there a time/date given in the initial puchase quotation/contract for the condo to be constructed and delivered for occupation? If yes then start a correspondence with the sellers for late delivery and notify of intention to claim.

 

Surely if the money was transfered from abroad then write to the account holder to get certified copy of their bank statement confirming the deposit and receipt showing the transaction along with the originating bank statement and go to the bank and get the FET.

 

Could suggest to get a 2nd opinion to review the contract, and if the advice of the lawyer if such a contract is too much one sided, notify the seller in writing pointing out their default and requesting the return of the deposit minus reasonable admin expenses. After that if no action or dispute notify seller of the intention to claim for delay and costs and to take further legal action.

Edited December 15, 2023 by freeworld

[balo]

Always check the past history of the developer before you choose to buy a pre sale condo,  I was lucky with my investment in Jomtien, could move in after 3 years. And sold it with a small profit a few years later. 



 

 

[soi3eddie]

A delay could work in the buyer's favour. A friend bought, off plan/pre-sale, a nice condo in Sukhumvit that was then delayed by about 4 years. He was very happy about this, as, by the time of completion, values had risen considerably and his purchase was already profitable. I see delay as no resaon to cancel the purchase.

 

As for the FET then the developer's bank can supply a statement of the Foreign Exchange Transaction which should have all the details required (assuming the sender entered the correct info and reference and reason for transfer). This will satisfy Land department when it comes to transfer of land register title to the buyer's name. 

 

When I bought first time the developer accepted the 5% deposit by credit card (I was surprised). When I did the transfer for the FET to satisfy land department, I transfered the whole purchases amount and the developer refunded me the deposit amount.

 

Unlikely that any developer will refund a pre-sale deposit on cancellation of purchase.

 

[BenStark]

There was a thread just a few days ago, where it was claimed that banks will issue an FET for a fee, even if the money didn't come from abroad.

 

Since for now it is only a few hundred thousand, that fee may be acceptable.

 

He still has time to make other arrangements for the balance.

[Mike Lister]

4 hours ago, BenStark said:

There was a thread just a few days ago, where it was claimed that banks will issue an FET for a fee, even if the money didn't come from abroad.

 

Since for now it is only a few hundred thousand, that fee may be acceptable.

 

He still has time to make other arrangements for the balance.

I'm very very sceptical that any bank would do that, it would be almost impossible to hide fro bank auditors and BOT plus it could mean loss of their banking license.

[Peterw42]

OP, (as soi3eddie says above) developers can generate an FET from their account. Its very common, people send all the money to the developer, they dont even have their own account and the FET get generated.

The official blurb from the land office is "an FET showing the foriegner as either the receiver of foreign funds into their account, or showing the foreigner as the sender of foreign funds into any account'.

[OneMoreFarang]

13 hours ago, The Contrarian said:

True or not, she sounds rather charming.

Recently I see sometimes nice-looking Thai ladies in my condominium who show people around. Property agents. It seems someone discovered that buyers don't only look at the official property for sale. Like: How can such a pretty nice lady lie - impossible.  

[ignore it]

You should advise your friend to use KY the next time.

It won't hurt as much. 

[kingstonkid]

20 hours ago, The Contrarian said:

thank you both for your replies OneMoreFarang and Mike. I agree with both your points. Hopefully he will learn from this experience.

The deposit was a few hundred thousand I believe, so not the end of the world but a rather sizeable sum for a deposit if you ask me. And along with the FET issue and more pending payments coming, he is slightly concerned to say the least.

Re FET, nothing was mentioned to him by either the agent or developer. I don't have much experience with purchasing condos here. But I'm also concerned for him that this will cause problems later. Not sure how he should go about this short of asking for a refund ASAP and starting over.

Also apparently, he was convinced to buy the unit because his agent told him that she also personally bought a place in the same building. herself. True or not, she sounds rather charming.

4 words

 

GET A GOOD LAWYER.

 

They are not going to talk to a farang.  They will talk to a lawyer who can find other upset people and file a legal claim.

[sikishrory]

What's the issue?

Not having the FET transfer documents?

Why not just get the document?

[Scouse123]

On 12/15/2023 at 6:38 PM, The Contrarian said:

thank you both for your replies OneMoreFarang and Mike. I agree with both your points. Hopefully he will learn from this experience.

The deposit was a few hundred thousand I believe, so not the end of the world but a rather sizeable sum for a deposit if you ask me. And along with the FET issue and more pending payments coming, he is slightly concerned to say the least.

Re FET, nothing was mentioned to him by either the agent or developer. I don't have much experience with purchasing condos here. But I'm also concerned for him that this will cause problems later. Not sure how he should go about this short of asking for a refund ASAP and starting over.

Also apparently, he was convinced to buy the unit because his agent told him that she also personally bought a place in the same building. herself. True or not, she sounds rather charming.

 

 

I made that same mistake many years ago in Pattaya. I bought off plan. One of the partners died, the project went bust and I lost 500,000 baht what I had put down.

 

Letting you in on a trade secret here, for those that don't know or are simply honest people wanting to make a purchase for their later years.

 

A lot of the agents bid and reserve (without putting funds down as deposits)  the best units in the building.

 

When you arrive as 'Joe customer 'you are told x, y and z condos have already been sold, these are usually higher floor and corner unit condos with the best unimpeded views.

 

You then automatically presume that this is a very popular development. Furthermore, it makes you speed up with your deposit, and you put pressure on yourself, as you are eager for it not to sell out.

 

The truth being, if the development proceeds, the agents have the best units to resell again at an inflated profit before completion of the project on the secondary market.

 

Because they are the best units, they will profit very quickly on this 'secondary selling', as well as their standard commissions as agents for the project.

 

You are given the usual reasons why these sudden deals come back unexpectedly on the market, death in the family, change of personal circumstances, cancer, etc when in fact, it is just the agent cashing in.

 

If the project doesn't go ahead, they have lost nothing, as they didn't put any money down.

 

This is also why they pressure you by offering the best deals right at the start per square metre. You think you are getting the best deal, in fact, you are taking huge risks.

 

Directors change, Directors resign, Banks foreclose, deposits seldom, if ever, get returned.

 

Many times, they have clubbed together with others to buy the land, then await selling off plan to start the project as they don't have the funds in cash.

 

It's been going on for donkeys years, with many agents and developers working hand in glove.

 

I bet the above rings a few bells with some of your condo buyers!   

 

 

 

 

 

[snowgard]

Best way is that your friend contact the Consumer Protection Board. They have free lawyers and will help him absolutly FREE!!!
https://www.ocpb.go.th/ewtadmin/ewt/ocpb_en/