Corrupt Condo Managements

[MeetJohnDoe]

As has been mentioned before, one of the potential pitfalls of buying a condo is bad management. Many times the condo management boards/associations are corrupt or in cahoots with the developer to maintain control of the building by the developer long after the units have been sold off. The developer/board then overcharges or under-provides for services and maintenance and pockets a nice additional revenue/profit stream.

This letter in the current of the Pattaya Mail relates one person's plight:

Longing for condo law oversight

Editor;

Some condo owners are wondering why they have to suffer for years under unscrupulous developer-manager teams. Condo law means nothing to these corrupt people who have neglected upkeep and development with impunity. They refuse to call general meetings, they appoint committees and dismiss them without notice, they ignore suggestions, and requests for outside audits are ignored.

Lawyers consulted by condo owners are fearful of taking on what seem like mafia organizations. It is perfectly clear that some people with loads of money and influence are in control. They are a law unto themselves.

Why wouldn’t it be possible and legal and appropriate for some government person to appoint a person well versed in condo law to visit condos, make inspections, and make reports that will lead to correction of any unholy situations? Surely any malfeasance could be dealt with under the provisions of the Condo Act of 1979 (amended 2008), or section 353 of the penal code. Is corruption so endemic that our prayers will never be heard?

R.E.S.

Just beware when buying, check the rep. of the developer, and ask around the building at random other unit owners before purchase.

[PattayaParent]

The article doesn't mention anything about owner condo management associations, only the developer management.

It is wresting control form the developer management that is the problem.

[Abrak]

I am not a lawyer but I have read the amended Condo Act 2008. There is quite a bit of recourse for abused condo owners. In particular, to the extent that the JP undertakes actions that are not in the best interests of co-owners he can be held personally liable for damages. This places an enormous onus on him NOT to work in the best interest of an individual co-owner to the detriment of other co-owners.

Another consideration for co-owners is simply this - to the extent a condo developer has a reputation for abusing co-owners, he doesnt have a viable profit model in that noone will buy from him. And without a viable profit model he will cease to exist.

[CRUNCHER]

The law is adaquate - just about. The juristic person basically carries the can for non-compliance.

Problem is - who enforces it? Presumably it is Lands Office. Next problem - Do lands office have the manpower, resources or even the experience (not to mention the will) to undertake effective enforcement action?

The letter writer has a good point. There is a real need, in Pattaya at least, for some Government led aggressive enforcement.

I underdstand Lands Office have sent letters to some condo managements. Let us see what follow-up there is.

[Abrak]

The law is adaquate - just about. The juristic person basically carries the can for non-compliance.

Problem is - who enforces it? Presumably it is Lands Office. Next problem - Do lands office have the manpower, resources or even the experience (not to mention the will) to undertake effective enforcement action?

The letter writer has a good point. There is a real need, in Pattaya at least, for some Government led aggressive enforcement.

I underdstand Lands Office have sent letters to some condo managements. Let us see what follow-up there is.

As you say the law is ok. To the extent it places liability on the JP it is good in that it should make him act in the spirit of a condominium but at the same time in many respects it is unenforceable.

My understanding, and I may be wrong here, is that the Condominium Act will always take priority over anything registered at the Land Office. (If you think about it, a developer could say take advantage of his majority shareholding so that minorities paid his maintenance fees under R&R that he voted, wrote and instituted if that was not the case.)

I strongly believe however that the most powerful argument is this - to the extent a developer acts in bad faith to co-owners he is being self destructive.

[CRUNCHER]

Abrak - you are qite right. Until the developer has sold half of the floor area he will always control a general meeting. Even with a large minority he will, inpractical terms, have a big say. He cannot, however, evade the law and the law takes precedence over the R&R.

He must pay management fees for the unsold units. He only has one vote on the Residence Committe. Meetings must be held and accounts presented and displayed in accordance with the law. If this is not done the JP can be fined. Trouble is, many developers (and their appointed JPs) are ignoring the law and without proper enforcement not much can be done.

Certainly if a developer has a lot of unsold units he does not want "bad press" or it may affect future sales. Unfortunately many developers do not have the brains to think that far ahead. Short term greed comes before good business practice.

[PattayaParent]

Abrak - you are qite right. Until the developer has sold half of the floor area he will always control a general meeting. Even with a large minority he will, inpractical terms, have a big say. He cannot, however, evade the law and the law takes precedence over the R&R.

He must pay management fees for the unsold units. He only has one vote on the Residence Committe. Meetings must be held and accounts presented and displayed in accordance with the law. If this is not done the JP can be fined. Trouble is, many developers (and their appointed JPs) are ignoring the law and without proper enforcement not much can be done.

Certainly if a developer has a lot of unsold units he does not want "bad press" or it may affect future sales. Unfortunately many developers do not have the brains to think that far ahead. Short term greed comes before good business practice.

Is this a new article introduced under the revised Act?

In my condo the voting is by ownership percentage and the JP actually has no vote as he's not a condo owner.

[CRUNCHER]

Abrak - you are qite right. Until the developer has sold half of the floor area he will always control a general meeting. Even with a large minority he will, inpractical terms, have a big say. He cannot, however, evade the law and the law takes precedence over the R&R.

He must pay management fees for the unsold units. He only has one vote on the Residence Committe. Meetings must be held and accounts presented and displayed in accordance with the law. If this is not done the JP can be fined. Trouble is, many developers (and their appointed JPs) are ignoring the law and without proper enforcement not much can be done.

Certainly if a developer has a lot of unsold units he does not want "bad press" or it may affect future sales. Unfortunately many developers do not have the brains to think that far ahead. Short term greed comes before good business practice.

Is this a new article introduced under the revised Act?

In my condo the voting is by ownership percentage and the JP actually has no vote as he's not a condo owner.

Sorry if I mislead. I was referring to the developer not the JP who, as you say, has no vote unless he is a co-owner. The developer at a general meeeting has a number of vote depending on how much floor area he is still holding. At a committee meeting it is one man one vote and this includes the developer.

Edited May 24, 2009 by CRUNCHER