Bank Draft

[thai1234]

I bought an off plan condo and the turn over payment is now due.

I made a bangkok bank AC payee only bank draft out to the developer for around 1 million.

The transfer has not yet taken place. I have found a buyer for my condo.

I would rather the buyer took over the existing contract and I returned the draft to bangkok bank.

Is this possible? or do I have to complete the deal with the developer myself, and then sell to the buyer as a seperate transaction?

[tangoll]

You need to check the purchase contract that you signed with developer when you first booked and bought the condo, to see if there is a "name change" provision in the contract. Probably there would be and you would be liable to pay the developer a name change fee. If this is possible, then it would be far easier for you to sell the unit before you transfer with the developer, do the name change, and then let the new buyer complete and transfer the condo from the developer.

If you transfer first, there's a lot more involved -- transfer process with developer, paying sinking fund and first year's management fee, and then when you do the resale with the new buyer, getting documents from juristic office, negotiating who pays transfer fees/tax, the sinking fund and paid in advance management fee, etc.

If at all possible, sell before transfer with developer.

If you have to do 2nd option, then check on dates of transfer -- the tax and fees would be greatly different if you do first transfer in 2009 and 2nd transfer in 2010, especially if after 28 March 2010 and the reduced rates are not extended by government.

This assumes you are farang and selling to either farang or Thai. If you are Thai and selling to farang, then 49% farang limit on ownership may apply.

[thai1234]

Thanks Tangoll, I understand its better to sell before transfer, but now ive already made the bank draft out to the developer.

Can I return/cancell the draft?

[oracle]

You can simply assign your right in the contract to the other buyer. The developer can't refuse and can't charge. You just need to notify him. If you assign your rights and obligations in the contract the developer can probably charge an assignment fee. Under the first option you remain responsible but the developer must transfer to the new buyer. The new buyer must of course comply with transferring the money in foreign currency himslef and you cancel your bank draft. I think.

[tangoll]

thai1234, why are you asking here about the bank draft? Why don't you ask Bangkok Bank first?

If the bank draft is already made out crossed with developer's name as payee, and Bangkok Bank refuses to accept the bank draft back, then you can ask developer to endorse the draft to you by signing on the back of the draft (sign it twice) which then makes it a bearer's cheque and you can deposit the cheque back into your own account.

But check with Bangkok Bank first to see if they will cancel the cheque, and failing that, if endorsing the cheque over to you will be acceptable to the bank for deposit into your account.

Failing even that (which I don't think will happen), you can pay the final installment to the developer as a prepayment without transfer, and when you do the sale to the new buyer with name change, the new buyer then does the transfer without further installment payment from him to developer as all installments have already been paid. The new buyer will have to pay the additional fees upon transfer such as transfer fee, sinking fund, management fee in advance, electric meter deposit, etc.

Edited December 3, 2009 by tangoll