Starting A Home Owners Association (Limited Company)

[Yaaklenmai]

The development, I live on, is being offered the opportunity (by the developer) of forming a company to manage our own affairs OR have our sois, communal gardens etc handed over to the local government.

Having studied the pros & cons I think that there is only one sensible option and that is to take responsibility for ourselves.

However, I am unsure about the legal situation, in Thailand, regarding the following:

1) Proxy votes

A number of the home owners are not residents, on the development, primarily using their houses as weekend homes with a couple having rented them out.

But, as only home owners will be allowed to vote, on whether to establish a company, (or not) the issue of proxy voting takes on major importance.

So.

i. Is there any required format for the proxy form itself?

ii. Is there any specific information that the form must contain to allow someone to utilise that proxy?

iii. What method can be used to send the form? i.e. Can it be emailed, faxed or must it be the original document and must it be received a stipulated time ahead of the meeting when the vote will be held?

We will require 50%+ of home owners to vote for establishing a company and would not want the legality of any proxy votes questioned.

2) The Articles of Association (Incorporation).

Assuming that the meeting votes in favour of establishing our own company and then elects a committee, who will become the board of directors, the first thing that they must address are The Articles.

So.

i. Is there anything, in Thai Law, which is different from that which applies in The West, which would expect them to cover the purpose of the company, how directors are elected, their responsiblities, their powers etc.?

ii. Given that the company formation will require 50+% of all house owners to vote in favour of it, is there any Thai Law which stipulates:

iii. Whether the articles need to be voted upon at all?

and (if so)

iv. Whether a majority of home owners (shareholders) must vote to ratify (accept) them OR if a simple majority of those present at a meeting (called for that purpose) is acceptable?

3) The costs involved.

The developers appear to be very keen for us to form the company, rather than cede the land to the local government, however, no mention (as yet) has been made of the costs of formation.

So

In the event (unlikely I feel) of the developer not wishing to meet these what would our liability (realistically) be?

Hopefully, someone on here will be able to provide the information I'm looking for.

Many thanks in advance!

FAO Moderators!

I posted this, yesterday, in the "Real Estate, housing, house and land ownership" forum but looking at the number of views (and 0 replies) I think I will not get the answers I need there.

Please, please leave here, where I may have more success!

[farang000999]

Kinda surprising that the developers are not leading the way here. I mean, you obviously have done a bit of research but do the developers really expect that every home owner dedicate the time that you have and to have the ability to navigate the legal and technical barriers?

[Yaaklenmai]

Kinda surprising that the developers are not leading the way here. I mean, you obviously have done a bit of research but do the developers really expect that every home owner dedicate the time that you have and to have the ability to navigate the legal and technical barriers?

Kinda surprising that the developers are not leading the way here. I mean, you obviously have done a bit of research but do the developers really expect that every home owner dedicate the time that you have and to have the ability to navigate the legal and technical barriers?

They, I think, are attempting to be helpful and are, certainly, in favour of us having our own company.

However, their English is not good enough for them to understand the finer details I'm looking to understand and I'm not sure if they, genuinely, understand the need for procedures not being able to be questioned, after the event.

For example, when I emailed them (in Thai), having had my TGF translate what I wanted to ask, the response addressed the generality, rather than the specifics of my question.

[NanLaew]

The whole concept of a HOA is alien to most Thai homeowners unless they have invested in condominiums. Then again, their participation is reportedly woeful and as witnessed by the form of the letter you received, they prefer to follow than lead. Unfortunately, any working HOA needs a financial contribution to be practical and that's where any fleeting Thai interest will be turned away.

"Pay for what? I can keep my house and yard clean and my dog will bark if anyone tries to break in." will be a typical response. In the meantime, the leaves falling on the sidewalk from the trees inside their property will pile up and their guard dogs sh!t will be fouling your driveway.

This very question was raised on another Thai forum (maybe even the same poster) and unless the HOA does have individuals AND associations rights founded firmly in Thai law, I think you would be on a hiding for nothing. The HOA's I have experience with (in Texas) were very effective even to the point of being legally able to seize your property for aggravated non-compliance with their rules and regulations. That should get the average Thai home owners attention.

[travelmann]

The whole concept of a HOA is alien to most Thai homeowners unless they have invested in condominiums. Then again, their participation is reportedly woeful and as witnessed by the form of the letter you received, they prefer to follow than lead. Unfortunately, any working HOA needs a financial contribution to be practical and that's where any fleeting Thai interest will be turned away.

"Pay for what? I can keep my house and yard clean and my dog will bark if anyone tries to break in." will be a typical response. In the meantime, the leaves falling on the sidewalk from the trees inside their property will pile up and their guard dogs sh!t will be fouling your driveway.

This very question was raised on another Thai forum (maybe even the same poster) and unless the HOA does have individuals AND associations rights founded firmly in Thai law, I think you would be on a hiding for nothing. The HOA's I have experience with (in Texas) were very effective even to the point of being legally able to seize your property for aggravated non-compliance with their rules and regulations. That should get the average Thai home owners attention.

Just about sums up the response many of them will say, outside of their own house they dont care and many dont even care inside, witness the semi derelict black mould covered older properties, nice Mercedes though!

[craigt3365]

OP: I think you've made a big mistake posting in General rather than in the RE forum. Many of our RE experts never visit the general forum. Here, you'll get plenty of off topic comments and other BS, which I'll try to weed out, but your best bet is the RE forum. Even if you have to wait for replies. You'll have less, but they'll be of a higher quality. Plus, don't forget it's Songkran. Many are out on vacation. Just give it some time and be patient.

NanLaew aside. He is quite knowledgeable on this subject but I do believe also watches the RE forum. Right?

Your call.

[Langsuan Man]

Be very careful with this idea, they always threaten that if you don't set up an HOA, then the local moo ban will take over. What they (the developers) are afraid of is that the local moo ban will force them to detail any problems with the development and account for any funds collected for the "community" before they will take it over

If they get you to form the HOA, then the juristic person(s) will take over this requirement and guess what, will have to employ a local lawyer to pry the information out of the developer

[topt]

I don't know how big your development is but as Nan Laew suggests you may have an issue getting the required interest from your fellow owners - both Thai and foreign. This has been a major issue in the moo bahn I live in where at the last AGM only about 8 house owners out of say 40 turned up. Trying to get people to agree on actions that were needed was like walking through quicksand - and this was on items that everyone had a vested interest in like the level and cost of security.

I had thought that AGMs needed to be at least every 12 months but this last one was 18 months ago. The foreign Chairman appointed at that time then resigned but no one was informed (not even the committee). Salary for the secretary (prbably works about 2 hours per week) went up 30% this year and she works for the original developer who still seems to be running things. When I queried this she said "so why don't you pay a company to take over then..."

The biggest problem is the complete lack of interest from nearly all the owners to make changes. IMHO you will need a strong Chairperson and committee (or enough to form a quorum) and, as NL says, legally binding articles that every houseowner signs up to, otherwise you are heading for a world of frustration.

[Yaaklenmai]

Be very careful with this idea, they always threaten that if you don't set up an HOA, then the local moo ban will take over. What they (the developers) are afraid of is that the local moo ban will force them to detail any problems with the development and account for any funds collected for the "community" before they will take it over

If they get you to form the HOA, then the juristic person(s) will take over this requirement and guess what, will have to employ a local lawyer to pry the information out of the developer

Many thanks, for that piece of advice, it was something that I was, totally, unaware of.

Do you know if there is a, particular, terminology that applies to the enquiries you refer to?

Edited April 19, 2012 by Yaaklenmai

[Yaaklenmai]

I don't know how big your development is but as Nan Laew suggests you may have an issue getting the required interest from your fellow owners - both Thai and foreign. This has been a major issue in the moo bahn I live in where at the last AGM only about 8 house owners out of say 40 turned up. Trying to get people to agree on actions that were needed was like walking through quicksand - and this was on items that everyone had a vested interest in like the level and cost of security.

I had thought that AGMs needed to be at least every 12 months but this last one was 18 months ago. The foreign Chairman appointed at that time then resigned but no one was informed (not even the committee). Salary for the secretary (prbably works about 2 hours per week) went up 30% this year and she works for the original developer who still seems to be running things. When I queried this she said "so why don't you pay a company to take over then..."

The biggest problem is the complete lack of interest from nearly all the owners to make changes. IMHO you will need a strong Chairperson and committee (or enough to form a quorum) and, as NL says, legally binding articles that every houseowner signs up to, otherwise you are heading for a world of frustration.

Our development comprises of 58 houses, in a gated community which, currently, has its' own security.

So far, we've managed to create a reasonable level of interest with meetings, typically, being attended by more than 50% of owners.

What I'm hoping for is that we can agree to establish the company and then have a strong set of articles approved, thus giving the future board the power to enforce any rules and regulations that they draw up.

Collecting the cash I would not see as a major problem, assuming that these give the board the same authority that the electricity & water companies enjoy.

If you don't pay them they just withdraw your right to use their infrastructure!

Edited April 19, 2012 by Yaaklenmai

[topt]

I don't know how big your development is but as Nan Laew suggests you may have an issue getting the required interest from your fellow owners - both Thai and foreign. This has been a major issue in the moo bahn I live in where at the last AGM only about 8 house owners out of say 40 turned up. Trying to get people to agree on actions that were needed was like walking through quicksand - and this was on items that everyone had a vested interest in like the level and cost of security.

I had thought that AGMs needed to be at least every 12 months but this last one was 18 months ago. The foreign Chairman appointed at that time then resigned but no one was informed (not even the committee). Salary for the secretary (prbably works about 2 hours per week) went up 30% this year and she works for the original developer who still seems to be running things. When I queried this she said "so why don't you pay a company to take over then..."

The biggest problem is the complete lack of interest from nearly all the owners to make changes. IMHO you will need a strong Chairperson and committee (or enough to form a quorum) and, as NL says, legally binding articles that every houseowner signs up to, otherwise you are heading for a world of frustration.

Our development comprises of 58 houses, in a gated community which, currently, has its' own security.

So far, we've managed to create a reasonable level of interest with meetings, typically, being attended by more than 50% of owners.

What I'm hoping for is that we can agree to establish the company and then have a strong set of articles approved, thus giving the future board the power to enforce any rules and regulations that they draw up.

Collecting the cash I would not see as a major problem, assuming that these give the board the same authority that the electricity & water companies enjoy.

If you don't pay them they just withdraw your right to use their infrastructure!

Sounds much more positive than where I am. I would be very interested to hear how it turns out and what articles you agree to when it is all decided.

[Yaaklenmai]

OP: I think you've made a big mistake posting in General rather than in the RE forum. Many of our RE experts never visit the general forum. Here, you'll get plenty of off topic comments and other BS, which I'll try to weed out, but your best bet is the RE forum. Even if you have to wait for replies. You'll have less, but they'll be of a higher quality. Plus, don't forget it's Songkran. Many are out on vacation. Just give it some time and be patient.

NanLaew aside. He is quite knowledgeable on this subject but I do believe also watches the RE forum. Right?

Your call.

Thanks for that.

Metisdead has been kind enough to leave my post in position, on RE, whilst stating that it is now closed but can be found on General topics.

Seems like the best of both worlds!

[craigt3365]

OP: I think you've made a big mistake posting in General rather than in the RE forum. Many of our RE experts never visit the general forum. Here, you'll get plenty of off topic comments and other BS, which I'll try to weed out, but your best bet is the RE forum. Even if you have to wait for replies. You'll have less, but they'll be of a higher quality. Plus, don't forget it's Songkran. Many are out on vacation. Just give it some time and be patient.

NanLaew aside. He is quite knowledgeable on this subject but I do believe also watches the RE forum. Right?

Your call.

Thanks for that.

Metisdead has been kind enough to leave my post in position, on RE, whilst stating that it is now closed but can be found on General topics.

Seems like the best of both worlds!

The closed topic will quickly drop off the first page, which means most won't see it there. Only here in General, where this topic really should not be, will it have new posts thus keeping it in the top of the list. FYI...you've gotten some great responses, but as I mentioned before....

[GentlemanJim]

All very interesting, but considering the importance of what you are doing both procedurally and legally, would it not be better to put this firmly in the hands of a property lawyer? I know it will mean an expense at the start but surely it could save a hell of a lot further down the road.

[NanLaew]

All very interesting, but considering the importance of what you are doing both procedurally and legally, would it not be better to put this firmly in the hands of a property lawyer? I know it will mean an expense at the start but surely it could save a hell of a lot further down the road.

Good idea.... but only if there is a local property lawyer that is familiar with the concept of a Home Owners Association. I would hazard that such a lawyer would be, as my granny would say, scarcer than hens teeth. As pointed out by others, this is something that is not to be taken lightly as you would pretty much be walking an untrodden path with no identified local points of reference. Maybe easier to start The Association of Home Owners Associations and seek members. When the both of them sign up, pick their brains and then you can start your own!

[scorecard]

All very interesting, but considering the importance of what you are doing both procedurally and legally, would it not be better to put this firmly in the hands of a property lawyer? I know it will mean an expense at the start but surely it could save a hell of a lot further down the road.

Good idea.... but only if there is a local property lawyer that is familiar with the concept of a Home Owners Association. I would hazard that such a lawyer would be, as my granny would say, scarcer than hens teeth. As pointed out by others, this is something that is not to be taken lightly as you would pretty much be walking an untrodden path with no identified local points of reference. Maybe easier to start The Association of Home Owners Associations and seek members. When the both of them sign up, pick their brains and then you can start your own!

I looked at the OPs details but I can't see anything about location.

I'm aware that a BKK based Thai law firm is currently advising a group of home owners in Pattaya (gated commnity) on this subject but in fact a much more complex overall picture, I'm told the law firm is well experienced in this specific field but I don't have any specific details of past cases they have handled or their track record and I don't have any details of their costs.

The law firm is based in Bangkok. If the OP wants the name please PM to me.

And good luck.

Edited April 20, 2012 by scorecard

[Yaaklenmai]

Can I, firstly, say that I am, extremely, grateful to everyone who has taken the time to respond to my thread and try to help me out - Because help me out you have!

Some people posted, some posted and invited a p.m. with others contacting me (directly) via the latter route, without posting.

To cut to the chase, I now understand (I think) so much more about this subject than I believed possible.

Examples would be as follows - I'm, deliberately, not attributing names because some of the information was received via p.m. and I will respect that confidence

1) I now possess the "Establishing a Housing Development Guide" - Thai Government Issue (In English).

From that I can see that the normal "ferang" way (establish company/compose, then submit, Articles etc) is not the way it works here and that the Articles (under whatever name) must form part of the submission.

2) I now possess a copy of the "Specimen Rules and Regs - English Translation (So not Thai Government issue) for a "Juristic Entity".

3) I have been provided with the name of a specialist Thai Land Law Lawyer, who would appear to not be frightened of reputations and believes that Thai Law is paramount and must be safeguarded against individual threats.

4) I can now understand the point made by "Langsuan Man", which I did not before, but think that it is covered in the "Establishing a Housing Development Guide" - at least I hope it is!

6) GentlemanJim's point was noted and I (mistakenly) thought that we did not need to get to that stage until the company had been agreed upon.

Having read the "guide" it would appear that Thai Law requires action in advance, (appointment of agent etc) which I would never have guessed.

So, at this stage, I'm now combing the "guide", in particular, before I attempt to speak to the recommended lawyer, early next week, so that I can have, specific, questions prepared.

I'm just hoping that it does not turn out that he only speaks Thai - Joke (sort of)!

In the interim, there is one big question that I would, very much like to know the answer to.

Can anyone, please, tell me what the difference is (in Thai terms) between an HOA and a Juristic Entity?

Having read both documents, the first refers to a "Board of Directors" (implying Limited Company status) and the latter to a "Committee", which would suggest something, totally, different!

I'm hoping to understand the answer to that before I speak to the lawyer - so I don't appear, totally, braindead!

Once again,

Many, many thanks to those who have, already, enlightened me and (in advance) to those that will continue to do so!

Finally, can I thank "Craig3365" & "Metisdead".

Without their cooperation this thread would have been confined to RE - Many thanks again!

Edited April 21, 2012 by Yaaklenmai