New Condo Management Advoce Needed

[tnewman]

Okay, I'm new to this forum and new to Thailand, having just bought a 2-bed apartment in a newly built condominium in Patong, Phuket. Apologies if I come across as asking daft questions, but as I say, I'm new here. Any advice would be welcome.

Like I said, I bought a new apartment in a condominium block. The building is finished, but almost all the units are still owned by the developer company, and are being rented out. I suspect that the developer did not want to sell all the units in the middle of a market slump and is waiting to sell when the market picks up again, and sold mine and (I think one other) to get some cash in.

I've already run into a few problems. Firstly, I received an invoice from the management company, which appears to be identical to the developer, telling me I needed to pay the management fees up front for the whole year. This contradicted what it said in the sales agreement, which said it would be charged quarterly. When I challenged them on this, it took them about 2 days to get their story straight. Eventually they settled on the matter having been decided by a majority of residents' votes before I bought the place, way back in June 2009. I asked them for minutes of meeting from this decision, and had to ask them several times. After a few days I received from them a hastily-drawn up word document, unsigned, which by the electronic record suggested it was created that afternoon. It listed the developer's representaive, his dad, and business partner (2 Americans and 1 Australian) as being present only in their capacity as shareholders of the developer/management company and owners of the various units. There is no reference to a committee, chairman, manager, etc. When I asked them why the minutes of meeting had only just been drawn up this afternoon, the developer's rep. said they were being translated from Thai. I agreed to pay the money up front, but told them I expect more transparency in future meetings/decisions.

This seems to have pissed them right off, and they decided to submit to me a very amateurish-looking invoice alleging late payment of the final puchase installment. For the sake of this discussion and to keep things simple, let's assume the payment was not late (my lawyer was in charge of the final payment, and it was dependent on a lot of things, such as appointments at various govt. bodies, completion of construction works in the unit, etc. It wasn't late.). I am now concerned they are going to start witholding services because I haven't paid this latest invoice. So I have a few questions addressed to anyone on here who might be able to advise.

1) Is it normal for the developer and management company to be the same company? Is a debt from one transferable to the other, i.e. if there is a dispute related to the purchase of the unit can it be considered to be a debt owed to the management company and therefore they can start withrawing services? I would expect the accounts for each to be separate, but can somebody confirm this?

2) Is it normal for the residents' committee to also be the owners of the management company? I get the impression they demanded the full year's fee from me because as the only independent resident, I was the sole source of outside cash. What is stopping them from increasing the management fee by 100% whenever they feel like it?

3) Is it normal that the minutes of every meeting would be recorded in Thai and they would have to translate them? Or are they, as I suspect, pulling a fast one here?

4) Are they allowed to make a decision, and record it in the minutes, based soley on their being shareholders of the developer/management company and owners? From a brief reading of the Condominium Act, there is supposed to be a committee and a chairman, not just three blokes saying they are the majority owners.

5) The byelaws imply that I am not allowed to rent the apartment. Eg.

Each owner shall occupy his/her unit as a residence for said owner and/or the owner's family (whether related by blood, marriage or adoption). For the purposes of these rules, the word "owner" is taken to mean any person, bona fide beneficiary of a trust, shareholder or executive officer of a corporation, or partner of a partnership, holding legal title to a unit ownership.

Followed by:

No more than one person may occupy the unit with the owner or the owner's family as a nonrental occupant. However, nothing in this provision shall be construed to allow boarding house type arrangements, individual room rental arrangements, student dormitory arrangements, hotel arrangements, transient occupancy for compensation arrangements, and temporary residence exchanges of more than one year, all of which are prohibited regardless of the presence of the owner or the owner's family member.

and:

With respect to hardship situations involving sudden job transfer, sabbaticals, illness entailing an extended stay in a health care institution, or the death of an owner, the Board must grant permission to an owner to lease or rent his/her unit to a specified lessee for a period of not less than six consecutive months nor more than twelve consecutive months, or on such other reasonable terms as the Board may establish

Which I take to mean I can only rent the place out under special circumstances with the Board's (whoever they are) approval. However, the rest of the units are being rented out to tourists both long and short terms like a hotel. Am I right in assuming that having bought the place I can rent it out to whomever I like (within reason)? Or do I need approval from the residents' committee/management company first? Also, to what extent are the byelaws legally binding? What is stopping the management company/resident's committee deciding I am, say, not allowed to install a fixed telephone line in the apartment? Or I'm not allowed to let the mother-in-law stay?

6) To what extent can the management company refuse to cooperate in the maintenance of my apartment? Say I want to change the water heater and need to temporarily turn off the water supply, can they refuse a building contractor access?

I do have a lawyer here, and I am due to meet with him to discuss these issues, but so far his advice seems to be along the lines of Rodney King: can't we all just get along? He has a point, but I need him to represent my interests, not just find a solution whereby I shell out $10k whenever it is demanded and everybody is happy for a month or so.

Any help would be very much appreciated.

[123ace]

My first advise is back off from doing anything that may upset the developer and their team. You need to keep the relationship intact.

I doubt the unsold units have been withdrawn as a tatic in a weak market, its more likley that there is no real demand and this is why they are unsold.

The first years mgt fees are normally paid in advance upon transfer. They may have overlooked this in earlier papaerwork and only figured out the opportunity once they studied the property mgt set up at the last minute.

For the management issue, it is often the case with local developers that they will set up a mgt company semi in-house as they will only have to pay salaries and not an additional fee. This often results in the mgt company learning as they go along. As the developer holds most of the units then yes they will have voting rights control over the building. The first AGM will not be due until 6 months after the first owner took possession. I suggest that you try and get on the committee, however by the sounds of things this will be held in Thai, and minutes can be taken in thai and this means you get a transalation only - all perfectly normal.

The wording for not renting etc looks like it was taken (cut and pasted) from somewhere else - push back on this as is something I have not seen before and is very unreasonable.

[tnewman]

My first advise is back off from doing anything that may upset the developer and their team. You need to keep the relationship intact.

I doubt the unsold units have been withdrawn as a tatic in a weak market, its more likley that there is no real demand and this is why they are unsold.

The first years mgt fees are normally paid in advance upon transfer. They may have overlooked this in earlier papaerwork and only figured out the opportunity once they studied the property mgt set up at the last minute.

For the management issue, it is often the case with local developers that they will set up a mgt company semi in-house as they will only have to pay salaries and not an additional fee. This often results in the mgt company learning as they go along. As the developer holds most of the units then yes they will have voting rights control over the building. The first AGM will not be due until 6 months after the first owner took possession. I suggest that you try and get on the committee, however by the sounds of things this will be held in Thai, and minutes can be taken in thai and this means you get a transalation only - all perfectly normal.

The wording for not renting etc looks like it was taken (cut and pasted) from somewhere else - push back on this as is something I have not seen before and is very unreasonable.

Thanks for the reply, 123ace. Unfortunately, the developer (or at least, his representative) threw his toys out of the pram the first time I asked for the minutes of meeting and has been acting like a petulant teenager since, with him finshing off by telling me I'll have to organise all works myself and I'll get no cooperation from him. About 5 minutes later I got the late payment notice. Not looking good, is it?

My only hope is that as more residents come on board they will dilute his own influence, but I have a feeling he is content to rent the whole place for a while. Do developers normally turn into rental companies, or do they generally want to sell up and scoot off as soon as they can?

[beginner]

Where are you Jack Dawson?

[123ace]

Looks like you may be in for the long haul on this. Keep calm. pay your bills on time nad you will slip below their radar.

Based on the complaints you have rasied, none of these are that serious so just ignore it and enjoy the place.

[donx]

Where are you Jack Dawson?

He's busy reading his "notes to self".

[jackdawson]

here i am .

nice 2 c u all .

re:

Is it normal?

i like that; that's funny

"normal" compared to what?

note to self: continue NOT to buy a Patong condo (or for that matter, even go to Patong)

ps can i ask? how much did u pay mr. newman?

[pkrv]

Firstly sorry I requested your post to be moved from the pinned thread.

If you are dealing with a developer then yes for a period the management company will be the developer, however they must hand over to a management company and create a juristic. This is not exactly set in stone, though the condominium act does specify this time period (I think six months). This is the case even with the very best and most prestigious developments in Thailand.

Even in my own condominium there has been some confusion, but because it is obvious that we sometimes do not understand each other, everyone tries harder.

I will give you an example. The condominium was finished a few years ago and I was asking questions about the Foreign Exchange Transfer Form (FET/FETF). But it was low on my priority list. It was only when this was made available on one of the pinned threads was I able point to it and say that’s what I want. I got all the documentation within one email, though that too took me time to decipher with the help of the guys here on Thaivisa.

[hhgz]

As the first owner of a condo unit, you are exposed to higher costs than people who buy a previously owned unit. Generally stipulated by contract, these costs are:

1. prepaid sinking fund (approximately 500THB/sqm)

2. prepaid maintenance cost for one year (perhaps 50THB/sqm)

In any case, you should demand an official typed and chopped receipt.

Elsewhere in this forum, you'll find the latest Condo Act - in English - and I suggest that you read it carefully.