Shared Apartments And Managment Companies What Are The Pit Falls

[508414]

Hi all - I am thinking of buying an apartment on Koh Phangan - there are five apartments in the block and there will be five seperate owners. The company we are buying from intend to own the common land and pool - the apartment owners will own the land the apartment sits on - the company we buy the land from then intends to be the management company to whom the owners will all pay management fees - could you advise if there are any pit falls to this arrangement, or would we better off owning the land and the pool. As these apartments are not regarded as Condos due to there being no Condominium licence being granted on Koh Phangan would we still be covered under the Condo act of 2008 - any information or advice that you could offer with regards to this query would be much appreciated - thanking you in anticipation

[trogers]

Hi all - I am thinking of buying an apartment on Koh Phangan - there are five apartments in the block and there will be five seperate owners. The company we are buying from intend to own the common land and pool - the apartment owners will own the land the apartment sits on - the company we buy the land from then intends to be the management company to whom the owners will all pay management fees - could you advise if there are any pit falls to this arrangement, or would we better off owning the land and the pool. As these apartments are not regarded as Condos due to there being no Condominium licence being granted on Koh Phangan would we still be covered under the Condo act of 2008 - any information or advice that you could offer with regards to this query would be much appreciated - thanking you in anticipation

How can your rights be protected by the Condo Act when the project is not licensed and registered as a condominium?

What will happen when the company mortgages the common land and pool in the future, defaults on paying back the mortgage, and the property is foreclosed?

And you ask if it is all right to buy into a project that is juggling ways to get around the law, and then expect protection from the law?

[508414]

Thanks. is there anything to protect apartment owners. wot do people with apartments have in there contract bout common land.

[thaiwanderer]

IMHUO

as above no protection from condo act as not a condo

major pitfall is not owning the common land

essentially you are at the mercy of the common land owner (at the very least no real control over management fees and at most (as above) they foreclose or simply refuse to honour any agreement / right of way etc. over the common area, many other disagreeable possibilities)

this may never occur and you may never have a problem - BUT....... etc.

if your heart is set on this property (after think about it again and again and checking if still in love with it and then again and again etc.) the ideal structure (in simplest terms) would of course involve all the apartment owners owning the common land and having freedom to decide between yourselves the maintenance company etc. (there are many other considerations but only if you can clear this hurdle with the seller can they even come into it)

essentially 'owned' apartments are a very very poor third after condos and villas (even where villas in shared estates)

the whole attraction (to some) of condos is the protection however small that comes with it - an 'owned' apartment has the potential for huge problems regardless of how much you may try to cover all bases by contract evn where you all own the common land

sorry to pour cold water but on the general information you've given thats my take - others may disagree

Edited May 18, 2009 by thaiwanderer

[508414]

Thank you

[ballbreaker]

From everything you have describe the deal could bring you many problems in the future.

As many people say, "don't invest any money in Thailand that you cannot afford to lose".

[trogers]

IMHUO

as above no protection from condo act as not a condo

major pitfall is not owning the common land

essentially you are at the mercy of the common land owner (at the very least no real control over management fees and at most (as above) they foreclose or simply refuse to honour any agreement / right of way etc. over the common area, many other disagreeable possibilities)

this may never occur and you may never have a problem - BUT....... etc.

We should view acquiring the property as an investment. And such an investment can be liquidated in the future - that is, sold to another person. Since you have questions as a first time buyer, what questions will there be if you try to sell the property to another?

[quiksilva]

You say apartment and condo, be clear. There is a difference here. Apartments usually refer to a building which has many units available for lease individually, condo's are owned.

This sounds like the owner is offering long leases on units within the development, but you must understand if this is an apartment, the only thing that you 'own' is a leasehold interest in your unit for whatever term is specified in the contract.

Look into long leases on this forum to get a clear understanding of what they entail, look into renewals as well. Also you should investigate estate management charges.

Remember in this development you would be a tenant and the only rights that you would have are those which are stated in your contract.