Sinking Fund Question

[Serpico]

How much money should be kept in the sinking fund?

Our building has 70 units, 140sqm each, and about 6 million in the fund.

Is there a minimum amount required by law?

[scorecard]

How much money should be kept in the sinking fund?

Our building has 70 units, 140sqm each, and about 6 million in the fund.

Is there a minimum amount required by law?

Sorry Serpico, I can't give you a specific answer, actually I'm looking for some answers to the same question. Here's what I've picked up so far which might be of value:

- The law about buildings classified as condominiums is quite comprehensive and up to date. I've been told that a good quality English translation has been completed by Land & House the property company and is available for purchase in numerous bookshops, but so far I can't locate it.

- On the other hand there is very probably an official English translation which must be available somewhere and probbaly on-line, but my searches so far have been unsuccessful.

-----

- There seems to be a patchy track record of developers not transferrring earmarked funds to the sinking fund controlled by the co-owners committee, or transferring the funds but somehow keeping control.

- The legal advisor for our condo (a legal advisor is required under the appropriate law, as is a certified auditor), says that many building are breaking the law in regard to the requirements under the law for a sinking fund, and also breaking the law in regard to upgrades which are required in terms of fire fighting equipment, waste water treatment, and more.

- Legal advisor says he's aware of many building where there are very serious problems with non-payment of monthly maintenance fees by many of the co-owners, in some cases many years in arrears and co-owners in residence just ignore all requests for payment, taking legal action is problematic, let alone the lack of push by most of the Thai co-owners to authorize legal action for recovery of the funds.

- Foreigners can be a member of the co-owners committee but of course the land title deed for the unit must be in your name, and there is a formula about how many foreigners can be on the committee.

Our legal advisor says there is an amendment to the appropriate law in process saying that all documents for the building must be in both Thai and English if there is 1 (or more) foreign owners. But of course when this will become law is anybodys guess.

If any member has an on-line copy of the appropriate law, would you please share it.

Thanks.

[trajan]

Under the Condo Act as recently amended, there doesnt seem to be a minimum amount stated for the reserve sinking fund (or for that matter the periodic common area maintenance and management charges).....

the required reserve sinking fund (and replenishment thereof) is as set out by the rules of the particular condo juristic person (CJP Rules) (voted on by co-owner meetings) in question....

however, there is a new Section 18/1 of the Condo Act that states that a co-owner who fails to pay its/his/her share of the condo fees/expenses must pay 12% p.a. simple interest on the outstanding amount and if the outstanding amount is late by six months or more then the interest rate increases to 20% p.a. and that delinquent co-owner's voting rights and use of common services or property can be suspended (as set out in the CJP Rules) ...

suspension of rights to use common property (lobby, lifts, hallways etc.) and services seems to be the real "stick", but how that is implemented in real life (does the condo manager physically block a delinquent co-owner from using the lifts/hallways/pool/gym????) is a mystery to me....

[Serpico]

Thanks.

I am also curious about the collection of unpaid maintenance fees.

After sending a series of notices, can the board of directors shut off services to these people?

Edit. You answered my question before I submitted it. THANKS

Edited August 5, 2009 by Serpico

[trajan]

Section 18/1 of the Condo Act states that the suspension of use of the common services and common property only arises when a co-owner is 6 months or more late (and as prescribed in the CJP Rules)....so if the CJP Rules state a procedure for cut-off of common services against a 6 month late co-owner, then I believe those procedures should apply....

also Section 36 (6) of the Condo Act states that the condo manager (who was appointed by the condo co-owners meeting) is empowered to file actions for enforcement of payment of debts from co-owners who are delinquent for 6 months or more (with a cross reference to Section 18)....

lastly under Section 41, the condo juristic person has legal "preferential rights" against the condo real property (and personal property) of the delinquent co-owner (which preferential rights are even superior to mortgage rights of other parties/banks)...

[backsoon]

How much money should be kept in the sinking fund?

Our building has 70 units, 140sqm each, and about 6 million in the fund.

Is there a minimum amount required by law?

Sorry Serpico, I can't give you a specific answer, actually I'm looking for some answers to the same question. Here's what I've picked up so far which might be of value:

- The law about buildings classified as condominiums is quite comprehensive and up to date. I've been told that a good quality English translation has been completed by Land & House the property company and is available for purchase in numerous bookshops, but so far I can't locate it.

- On the other hand there is very probably an official English translation which must be available somewhere and probbaly on-line, but my searches so far have been unsuccessful.

-----

- There seems to be a patchy track record of developers not transferrring earmarked funds to the sinking fund controlled by the co-owners committee, or transferring the funds but somehow keeping control.

- The legal advisor for our condo (a legal advisor is required under the appropriate law, as is a certified auditor), says that many building are breaking the law in regard to the requirements under the law for a sinking fund, and also breaking the law in regard to upgrades which are required in terms of fire fighting equipment, waste water treatment, and more.

- Legal advisor says he's aware of many building where there are very serious problems with non-payment of monthly maintenance fees by many of the co-owners, in some cases many years in arrears and co-owners in residence just ignore all requests for payment, taking legal action is problematic, let alone the lack of push by most of the Thai co-owners to authorize legal action for recovery of the funds.

- Foreigners can be a member of the co-owners committee but of course the land title deed for the unit must be in your name, and there is a formula about how many foreigners can be on the committee.

Our legal advisor says there is an amendment to the appropriate law in process saying that all documents for the building must be in both Thai and English if there is 1 (or more) foreign owners. But of course when this will become law is anybodys guess.

If any member has an on-line copy of the appropriate law, would you please share it.

Thanks.

Dear Scorecard. Pleasantly surprised by your posting. In my Condo (102 units) the sinking fund is lower than 6M. The developer still holds control and funds are 'receivable'.

I am taking the Juristic person Management to Court for non-compliance with Thai Laws in Fire Protection area. Not sure whether this is a Test case, or there have been other's before me. If there were, I would like to know. Post it here or get to me personally,- I'll really appreciate this. After 17 Aug I will post the outcome. It's time to give the bastards a run for their money.

[britishrobert]

There is no minimum amount.

[Brigante7]

What is a sinking fund? Have read about them but don't know what they are.

Brigante7.

[quiksilva]

They are funds set up by the condo (contributed by the co-owners) that are to be set aside and used only for major repairs / renovations. There is no minimum amount, but should be sufficient to cover items such as the replacement of lift cables, exterior painting, new transformers etc.

Once used co-owners should top up the fund. They should only be used after approval at an EGM / AGM.

[Brigante7]

They are funds set up by the condo (contributed by the co-owners) that are to be set aside and used only for major repairs / renovations. There is no minimum amount, but should be sufficient to cover items such as the replacement of lift cables, exterior painting, new transformers etc.

Once used co-owners should top up the fund. They should only be used after approval at an EGM / AGM.

OK, thanks for the info, now I know.

Brigante7.

[Serpico]

Good info here. Thanks.

I too am curious about the responsibilities regarding life/ safety and the juristic persons responsibility.

Our building has faulty emergency lights. Never inspected.

Doors entering the stairwell don't stay closed.

No stairwell pressure system.

Debris in the stairwell.

Unsafe gaps in the stairwell, repairs planned years ago.

No fire drill.

Security recorder disabled.

You get the picture.

[hhgz]

I have no idea what a "stairwell pressure system" is, and that does not matter.

Contact the Juristic person, and the condo building manager. Write an email, and clearly articulate your thoughts without emotion or threats. Before the annual condo owners meeting, bring up your concerns to the Juristic person, and the condo manager. During the annual condo owners meeting, bring up all unreconciled concerns.

[Serpico]

I have no idea what a "stairwell pressure system" is, and that does not matter.

Contact the Juristic person, and the condo building manager. Write an email, and clearly articulate your thoughts without emotion or threats. Before the annual condo owners meeting, bring up your concerns to the Juristic person, and the condo manager. During the annual condo owners meeting, bring up all unreconciled concerns.

Thanks,

Our manager and Juristic Person are not tending to the above life/safety issues. I was just wondering if their inattention is violating the law?

You think it would be a priority.

We will have a Santika event if the residents try to get away thru an unlit, smoke filled, debris covered stairwell with the large gaps that have been scheduled to be fixed long ago.

The stairwell pressure system keeps smoke out of the fire escape route.

[CRUNCHER]

The law does not differentiate sinking fund and management fees. It is all dealt with under money for maintenance. (Sorry don’t have Condo Act with me at the moment and forget wording.) Sinking fund, management fees etc are issues that should be dealt with by the committee and voted on by AGM/EGM.

If money is not paid, in addition to interest, use of facilities can be denied and this includes disconnection electricity and water. Voting rights are suspended. Also JP cannot issue a letter of “being debt free” if a delinquent owner sells his unit. i.e. ownership cannot be transferred.

As has been said, if you own condos it is a good idea to get the amended act (original act as amended by the so called “new condo act”) and read it carefully.

[quiksilva]

BTW its a good idea to not only to check that fire safety equipment has been installed but to get them tested on a regular basis. I recall being the first person to test a pressurised stairwell in a luxury condo that was five years old by the time I had taken the reins.

We turned on the fans, and it promptly collapsed from the 23rd floor down! That's where the sinking fund came in.

[Serpico]

A Farang can get a WP for condo manager?

[quiksilva]

I have always had a work permit. I work for an international property consultancy, at the time I was working in the property management field albeit with a different firm and had the "pleasure" of overseeing the management of several properties.

Edited August 10, 2009 by quiksilva

[hhgz]

"Our manager and Juristic Person are not tending to the above life/safety issues. I was just wondering if their inattention is violating the law?"

Indeed, it is. If what you saying to true, the inattention of the Juristic person is a direct violation of the Condo Act. If I were you, I'd familiarize myself with the Condo Law, and send a registered letter to the Juristic person and send a copy of the Land Office. The Juristic person can be removed from office, and replaced by someone else. The Condo Act has the details.

[Serpico]

Thank you.

You would think after that Santika incident, people would make fire safety a priority.

Does anybody know a fire safety company that can inspect our system?

[stgrhe]

Here you can read all you need to know about condominiums:

http://www.thailawonline.com/en/property/condominiums