Legal Question For Thai On Condo- Expert Advice Please

[makavelithedon]

Hi all,

I don't know if this one has come up before but I thought it was a cracker and would like to offer some sound advice to the owner.

A really good friend (Thai) decided to buy a condo a couple of years ago and had to pay 15% over 2 years whilst it was built. It was a good location, and they are very responsible and together! They paid what amounted to about 400, 000 baht over that period and I know it was quite a struggle. Now it is finished and just before she gets a mortgage the company has sent a letter to say that it is 10% bigger than agreed in the contract and they have calculated that it is another 250,000 baht (by the m2 ) and she will have to stump that up too!

In the contract it states that if the unit ends up bigger or smaller, that you accept you will have to pay less or more depending, I find this unbelievable. It's like a single person purchasing a 35m2 pad and then when it's finished it ends up 70 m2 which they can't possibly pay for or have budgeted for and why the hel_l should they have and still have to pay double!

The only thing I can see, is that a judge could possibly ,decide that there is no actual cost per m2 extra listed in the contract, so why should she pay the retail m2 price just because they want you too? You signed at a certain *** m2 in good faith and they have ended up constructing it way outside that, so why shouldn't it be either nothing more, or the building costs only?

I really feel for them, and it is not simply an easy 'oh get a refund type situation' as they have struggled and waited for 2 years whilst built and the value now built is way over what was paid. If this happens on a large percentage of the units it appears like a total scam to me in adding a % profit to the whole project for the owner.

Any expert advice would be appreciated.

Mak

Edited May 9, 2009 by makavelithedon

[Boater]

have you read the contract? , as i have never seen a contract like this before on a condo , only once on off plan villas where the land bounry might be slightly bigger ( but the cost was capped at 100,000 THB )

but HOW can they mis calculate the building are of a condo by so much?

best advise is to consulte a lawyer and quick, i think the company is pulling a typical Thai Scam

[thaiwanderer]

Hi all,

I don't know if this one has come up before but I thought it was a cracker and would like to offer some sound advice to the owner.

A really good friend (Thai) decided to buy a condo a couple of years ago and had to pay 15% over 2 years whilst it was built. It was a good location, and they are very responsible and together! They paid what amounted to about 400, 000 baht over that period and I know it was quite a struggle. Now it is finished and just before she gets a mortgage the company has sent a letter to say that it is 10% bigger than agreed in the contract and they have calculated that it is another 250,000 baht (by the m2 ) and she will have to stump that up too!

In the contract it states that if the unit ends up bigger or smaller, that you accept you will have to pay less or more depending, I find this unbelievable. It's like a single person purchasing a 35m2 pad and then when it's finished it ends up 70 m2 which they can't possibly pay for or have budgeted for and why the hel_l should they have and still have to pay double!

The only thing I can see, is that a judge could possibly ,decide that there is no actual cost per m2 extra listed in the contract, so why should she pay the retail m2 price just because they want you too? You signed at a certain *** m2 in good faith and they have ended up constructing it way outside that, so why shouldn't it be either nothing more, or the building costs only?

I really feel for them, and it is not simply an easy 'oh get a refund type situation' as they have struggled and waited for 2 years whilst built and the value now built is way over what was paid. If this happens on a large percentage of the units it appears like a total scam to me in adding a % profit to the whole project for the owner.

Any expert advice would be appreciated.

Mak

Firstly its not 'like' they are being asked to pay double. They are being asked to pay for an extra 10% floor space (at 166,666THB less than the 10% actually represents according to the original contract pricing). (I also note you say its now worth far more than what was paid - assume you mean rise in values generally rather than the 250,000thb they are being asked to pay).

It would be unusual for the price per square m not to be specifically stated in the contract and even if its not a judge (or anyone) would not take long working it out (price divided by scheduled size multiplied by actual size).

It is not unusual at all for there to be differences in final build size. 10% is a bit more than typical though. Usually anything above or below by up to 5% the sale stands and the buyer pays or is discounted the difference. Beyond 5% they can (in theory) choose to do that or break contract and get a refund. I feel for them in that it is beyond what they budgeted and if they may not be able to secure financing but given (in my experience at least) how common this possibility is I am a little confused why neither the contract deals with it or they did not at all anticipate the possibility.

I do not believe at all that it is a scam (i might wonder where else the builder's measurements went wrong though!). They are being asked to pay 93% of the actual increase in floor space on the value per square meter of the original contract, and if I understand you correctly the market value of the unit per square meter is also now much higher than that in the original contract anyway.

Of course if they do not wish or are unable to go ahead I cross my fingers for their refund in (my general assessment of) the current market.

[stgrhe]

Mak, your friends must have signed the agreement without good legal advise, which is very sad actually. Too many buyers try to save costs and then end up with problems.

It may not help your friends but a warning to others, never ever accept the developers' contract drafts as they are because they are not likely to be balanced. In the worst cases the developer will have all rights and the buyer all obligations.

I would definitely recommend your friends to seek advise from a Bangkok law firm specialising in real estate.

[RAZZELL]

I've heard of people being asked for more money when the condo turns out bigger than advertised.

Get a ruler and get a lawyer!

RAZZ

[makavelithedon]

Many thanks for the replies everyone. I do know an excellent property lawyer so I will pass on the details, but as highlighted by some of you, the fact the measurements are 15 ft or more out is a little concerning regardless of the financial side!

Thanks again.

[sxgun]

Hi,

It is not unusual for the size of a new condo to change. The actual measurement of the unit is done by the land office when they issue the individual Chanolt for the Condo unit. It is the land department that decides the exact measurement of the condo unit.

Normally in a Sale/Purchase contact there is a clause that also for the unit to be slightly smaller or larger that the measured size of the unit in the contract.

If I recall correctly in one of my contracts this is up to 5%.

In the contract the price per square meter is stated. This, times the actual square meters of the unit determines the purchase price.

So a question I would ask is the clause in your friends contract?

If not I think an attorney may help sort out the problem.

If the unit size is smaller or larger that what is allowed in the contract then I think it gets more complicated.

I.E. negotiations.

It sounds like the measured size of your friends unit was more than what is typically allowed for. I think 5%.

Hope this helps.

[hhgz]

"It's like...purchasing a 35m2 pad and then when it's finished it ends up 70 m2 "

Unless I misread your post, the situation is nothing like that. First you comment that the final cost is 10% more than originally thought, but this example is 100% more.

"In the contract it states that if the unit ends up bigger or smaller, that you accept you will have to pay less or more depending, I find this unbelievable."

It's a common phrase, believe it or not.

[makavelithedon]

"It's like...purchasing a 35m2 pad and then when it's finished it ends up 70 m2 "

Unless I misread your post, the situation is nothing like that. First you comment that the final cost is 10% more than originally thought, but this example is 100% more.

"In the contract it states that if the unit ends up bigger or smaller, that you accept you will have to pay less or more depending, I find this unbelievable."

It's a common phrase, believe it or not.

Wow,

And as appears usual on Thai Visa these days there appears little positive to the post other than try and pick a petty squabble.

I think everyone else saw my comment as exaggerated, but nothing in Thailand would surprise me and having to suddenly pay another 70% or so on the original deposit is a sizable amount however you look at it.

On listening to other views, it appears actually it's not that common and there are usually caps.

So to everyone who replied constructively thanks again.

Edited May 13, 2009 by makavelithedon

[mmushr00m]

How much bigger was the condo in sqm? You mentioned 10%, 10% of what? let me guess, 1-2sqm bigger?

My advice is to

- check how they did the measurements, go to the land department to get a copy of the measurements.

- cross check it with the plans of the condo you were given when you bought it,

- if possible get a blue print of the condo and cross ref it with the final measurement drawing.

See if they added new bits to the original plan or included bits which were not in the orig meaurements (at time of buying).

- If you know someone at the land department, see if they can help you.

Who is the developer?

Goodluck, I went through the same thing myself.

[think_too_mut]

In the contract it states that if the unit ends up bigger or smaller, that you accept you will have to pay less or more depending, I find this unbelievable. It's like a single person purchasing a 35m2 pad and then when it's finished it ends up 70 m2 which they can't possibly pay for or have budgeted for and why the hel_l should they have and still have to pay double!

It's nothing like that.

The clause in the contract is to allow for things like pillars or part of pillars protruding through a condo or causing a small dent that affect (+ or -) floor space.

Reasonably small variations.

My condo was 70square centimetres smaller than originally sold and that money was deducted upon final payment. Another condo of the same type next to me did not have that pillar (about 25x30cm eating up my floor space) shared beteween common area and my condo and was paid as initially agreed.

[kaxper]

my condo contract also has this +/- clause which i thought was pretty fair, but i was expecting the variance to be in the <5% range ... 10% seems large and certainly calls into question design issues, like did the contractor screwed up, did your neighbor unit shrunk by 10%, are the hallway corridors smaller than expected, did the overall common area shrink. these are certainly issues you can bring up on transfer if it is indeed the case. however, if the unit size is larger with no effect on what i mentioned, i don't have any issues if it went from say a 50sqm unit to 55sqm and rightfully i should pay given that it is in the contract. in hindsight, all of us should have just made a notation on the contract to cap it at say 5%, and have a clause that gives the buyer to opt out (get a refund) if it exceeds 5%.

[thaiwanderer]

my condo contract also has this +/- clause which i thought was pretty fair, but i was expecting the variance to be in the <5% range ... 10% seems large and certainly calls into question design issues, like did the contractor screwed up, did your neighbor unit shrunk by 10%, are the hallway corridors smaller than expected, did the overall common area shrink. these are certainly issues you can bring up on transfer if it is indeed the case. however, if the unit size is larger with no effect on what i mentioned, i don't have any issues if it went from say a 50sqm unit to 55sqm and rightfully i should pay given that it is in the contract. in hindsight, all of us should have just made a notation on the contract to cap it at say 5%, and have a clause that gives the buyer to opt out (get a refund) if it exceeds 5%.

obviously i have not seen your purchase contract but given you say this opt out was not in it could i possibly ask if any substantive amendments were made to the contract the seller / developer supplied?