Screwed Up And Got Stuck With A Company Owned Condo. Now Looking For Advice.

[BodhiBum]

So first off, I know now I should've known better. But hindsight is great and golden, but not very helpful. So now I'm in damage control mode.

The company who built the place conveniently forgot to provide guidance on how to properly purchase a condo on foreign ownership, and back then I stupidly didn't get a lawyer to help me through the process. So of course I ended up in the Thai 51 percent, with a company owned condo.

So now my worry is that they've set up the company with the 51% owned by their Thai lawyer. What is the best way to work this so I'm as safe as possible. I know that the gov can change the rules tomorrow and all company owned condos can be extinct. But baring that unfortunate turn of events, what can I do? I'm thinking a few options, please if anyone more knowledgeable can provide advice I'd very much appreciate:

1) Change the 51% Thai ownership from my property company to a lawyer of my choosing. I've heard this is the most common option, and if you find a lawyer you trust then they will take this on. So if anyone can suggest a lawyer that does this for a large number of falangs, then that may be the safest option.

2) Registering an Usufruct or or Right of Superficies at the Land Department. But as I understand this would give the Thai majority shareholder ownership, and only myself that right to use for life.

I really am not sure the way forward here, so any help from those more knowledgeable on TV would very much be appreciated. Please don't flame me for my initial stupidity. I rightly recognise what I've done wrong. And I've taken my time over the past few years to rectify the situation. But I'd like now to get a little more security in my situation these days, so please give any advice possible.

[justcruisin]

I would also keep om eye on sales in the building that you have ownership in.. If a foreign owned apartment is purchased by a Thai, then the % of foreign owned apartments change and you may be able to change your unit over to your name.

[strollling]

Hope you're not too attached to the place.

And that the money was play money that you didn't/don't need.

[Darrel]

The company who built the place conveniently forgot to provide guidance on how to properly purchase a condo on foreign ownership, and back then I stupidly didn't get a lawyer to help me through the process. So of course I ended up in the Thai 51 percent, with a company owned condo.

You probably mean that they deliberately sold you a Thai-quota unit when they realised that you didnt know the difference. What a charming lot property developers and real estate agents are. You dont need a lawyer to help with purchase in farang name, it really is a doddle. Lawyers and agents just make it appear complicated so that they can rip you off better.

That said, the difference in value today may not be huge if (and it's an enormous if) your unit is in a building that is very popular with Thais, or extremely popular with farangs who will be so keen to buy there that they dont mind buying in company name. All that is a bit unlikely though, and will probably get even less likely in the medium term.

Personally I wouldnt touch company-name anything with someone else's bargepole, let alone my own, but if I had the misfortune to be in your shoes I might think about altering the company structure so that the voting rights are separated from the ownership. This way you can retain control and, in theory, should be able to prevent your bent lawyer from selling the unit out from under you.

Best of luck.

[Darrel]

I would also keep om eye on sales in the building that you have ownership in.. If a foreign owned apartment is purchased by a Thai, then the % of foreign owned apartments change and you may be able to change your unit over to your name.

Certainly a possibility but very unlikely as most buildings are either not very popular with farangs (and so no problem with 49/51) or not very popular with Thais (in which case any Thai wanting to buy will probably just buy an unsold unit in the Thai quota, or a company name unit, rather than pay over the odds for a farang name unit). Stranger things have happened though.

That said, I do know of a case where this did happen; a Thai wife inherited from her dead farang husband a unit in a Pattaya building that is very popular with farangs, and stupidly transferred it into her own name. She immediately lost about 40% in value and a smart farang managed to pick up a Thai-name unit for a song and put it in his name on the same day. He was paying a monthly "retainer" to the JP office to be told about such things before they happen.

[BodhiBum]

You probably mean that they deliberately sold you a Thai-quota unit when they realised that you didnt know the difference. What a charming lot property developers and real estate agents are. You dont need a lawyer to help with purchase in farang name, it really is a doddle. Lawyers and agents just make it appear complicated so that they can rip you off better.

That said, the difference in value today may not be huge if (and it's an enormous if) your unit is in a building that is very popular with Thais, or extremely popular with farangs who will be so keen to buy there that they dont mind buying in company name. All that is a bit unlikely though, and will probably get even less likely in the medium term.

Personally I wouldnt touch company-name anything with someone else's bargepole, let alone my own, but if I had the misfortune to be in your shoes I might think about altering the company structure so that the voting rights are separated from the ownership. This way you can retain control and, in theory, should be able to prevent your bent lawyer from selling the unit out from under you.

Best of luck.

That's exactly what I mean, and clearly you hit the nail on the head. No prizes for outing the scum that call themselves realtors in this town. I know better now, but doesn't do me much good when the papers have been signed and delivered.

Luckily my unit is in a building that is popular with Thais and foreigners. I'm not so much worried about selling as the demand for my building is not a problem, and I dont' much want to sell regardless. What I'm more worried about, and the point of this post, was how I can properly protect myself in my current situation of potentially losing my condo in the future through no fault of my own due to the dodgy company set up which i wasn't party to, and I don't really understand.

But you said:

I might think about altering the company structure so that the voting rights are separated from the ownership. This way you can retain control and, in theory, should be able to prevent your bent lawyer from selling the unit out from under you.

Ok, good, great. HOW? Please explain.

Please PM as I would LOVE your advice.

Edited May 6, 2012 by BodhiBum

[Darrel]

I have sent you a PM explaining that I am probably the last person to ask for advice about company structures; I really don't want to know anything about them and wouldn't get involved with them under any circumstances.

That said, a few people have told me that the share structure of their companies is split in two parts; one which covers the ownership (split 49/51) and one which covers the voting rights (split 80/20 for example). This means that the owner of the 80% voting shares can veto any action that might be detrimental to him (ie the sale of the property). Other people have told me that this isnt really legal either.

I don't know about the legality and I don't want to know. As far as I'm concerned company structures are a total nightmare and about as desirable as gonorrhoea, but that's just my opinion.

Good luck.

[PattayaPhom]

You should first ask in Jurisic office, you may find this can be rectified easily.

[Langsuan Man]

What I want to know is how long has this company existed ?

Since you were clueless by buying it via the company route have you been to a lawyer or accountant and had the company updated on an annual basis ? If not, then you are really liable for getting a nasty surprise from the Department of Business Development, Ministry of Commerce since if you failed to file and update the company registration you are subject to some heavy fines

You can go to a lawyer and change the structure of the company by diluting the shares amongst Thais (remember how Taksin had shares in the name of his driver, maid and gardner) but of more immediate concern is how the company currently stands regarding updating and filing

By the way, as long as you safeguard your company seal no one can transfer, sell or encumber the companies "ownership" of your condo

But the first thing I would do, if I was you, would be to contact a lawyer for some real advice and not depend upon Thia Visa for legal information

[ThailandInvestmentGuide]

In relation to your two suggestions:

"1) Change the 51% Thai ownership from my property company to a lawyer of my choosing. I've heard this is the most common option, and if you find a lawyer you trust then they will take this on. So if anyone can suggest a lawyer that does this for a large number of falangs, then that may be the safest option."

An anonymous person in an online forum suggests "Khun Joe is great, totally honest" - are you going to try to get the current lawyer (who may be straight for all we know) to sign over to Joe, who could be as bent as a dogs hind leg? Do you know any Thais personally who could be trusted for this role?

"2) Registering an Usufruct or or Right of Superficies at the Land Department. But as I understand this would give the Thai majority shareholder ownership, and only myself that right to use for life."

I can imagine the conversation between you and the company's lawyer, "please khun somchai, would you mind signing this application for a usufruct?". "But Khun Bodhibum this is quite unnecessary, why do you need it?". "Well Khun Somchai, it's to stop you ripping me off". <buzzer sounds>

The granting of the usufruct would not affect ownership but yes it would give you the right to use the property for the term specified in the usufruct

Before you take even one more step you need to bring your general knowledge of property matters up to speed a bit ... otherwise you may find yourself jumping from the frying pan into the fire. There are plenty of relevant threads here, there is good information available in some of the better lawyers' web sites, there are books. Then you need to sit down with a lawyer who is well-recommended by someone you know and trust .. just to discuss your situation and your options. The suggestion to the speak to the condos Juristic Officer might also be sound ... not to complain about the situation but just to discuss possible options.

[aussiebebe]

While I agree with what Darrel wrote regarding lawyers being unnecessary when a foreigner buys a condo in their own name "it really is a doddle", the best thing for the OP to do would be to hire a lawyer to give advice. Find a firm in the same area as the condo. I used the same company when I bought a condo in 2009 and then sold early this year, the fees were 20k each time and just gave me piece of mind, but I admire those who handle their own sales!

[Delight]

Maybe I am missing something -maybe not

This is how I see it.

1)For a Farang to purchase a condo in the Thai 51% it must be via a Thai company-so far so good.

2) As a Farang you can only own max.49% of this company-That seems to be the case from what you say.

3) The voting rights belonging to the other 51% company directors must be signed over to you . i.e you must have 100% of the voting rights.That way you have 100% of the control of both the company and the condo.

That bit is missing from what you say (apologize if I have missed something).

As of now if the company owns the condo 100% and you own 49% of the company -then you only own 49% of the condo.

Solution -arrange matters to achieve 100% of voting rights in your name

I assume that you have the original purchase contract

I assume that you have evidence of payment of the full amount.

Given that you have these then getting the 100% voting rights should not be difficult.

If you have difficulty then others,including the Lawyer have conspired to defraud you.

If I were you, I would have no further contact with anybody except a lawyer who is qualified to help you.

If there is evidence of illegal practice then I suspect that you can sue them for damages.

I have never heard of a Thai company which is set up for the purpose of buying a condo where there is only a single Thai citizen who owns 51%. Typically there are 6 . The 51 % shares are divided by 6

This looks like an attempt to defraud.

Good luck

[Khun Jean]

This looks like an attempt to defraud.

Good luck

Fixed it.

[BodhiBum]

The company set up to own the condo has existed for a few years now, and the books are all up to date and yearly company taxes paid up. The problem was that the developer had their own in-house lawyer who set up the company, and assigned the 51% thai shares between members of the company. As it now still stands. However, I eventually moved the books to another lawyer who was recommended, who then suggested I change the thai shares over to himself and other members of his law firm. I was wary of that, and now a year or so on I have the feeling this thai lawyer is anything but trustworthy. Hence I'm looking for a new lawyer I can trust, or at least I don't suspect will purposely seek to take advantage of my less than ideal situation.

So now I'm stuck with 51% of the shares with my old crooked developer, and no trustworthy thai (do they exist?) to move the shares to. I was thinking my best option would be to find an honest lawyer and move the 51% to them, and get the 100% voting rights confirmed are with me. But as was pointed out, a lawyer that is recommended on TV as being straight as a tent pole, might turn out as crooked as the rest of them. And no, I don't know any Thais personally that I trust. I'd rather just get as trustworthy a lawyer as humanly possible, and beyond that I can't see how much more I can do in this position.

One point about my company seal, my present lawyer suggested I keep all my company documents and the seal with them. On second thought that doesn't sound like such a good idea. I think I'll get those back in my own safe asap.

So two suggestions were to check with the Juristic Officer of my condo. But who exactly is the Juristic Officer? The condo owners committee just replaced the building management company, but I doubt they would be any help as they only manage the grounds. There is a guy who represents the co-owners at the condo meetings, but I doubt he would be much help. I've tried to ask about the foreign ownership quota with the developer but they won't even discuss, even though they are still advertising condos for sales with foreign ownership.

[Darrel]

I've tried to ask about the foreign ownership quota with the developer but they won't even discuss, even though they are still advertising condos for sales with foreign ownership.

If there is still farang-name quota available then perhaps you could sell the condo to yourself and put it in your name. You dont have to ask the the developer about this; it's the Land Office that decides about the quota. You would have to pay transfer tax of course, and you would need to show proof of import of the original funds. Quite what the Land Office would make of the transaction I dont know but if the developer is advertising the farang-quota units truthfully (and it's a big if) this might be an option.

One other thing; dont assume that Thais are all crooks and farangs aren't. I would say that there is probably a much higher percentage of crooks amongst farangs who are involved with property and law and "business" generally here than there is with Thais.

[Delight]

You say and get the 100% voting rights confirmed are with me.

I read this that the 100% voting rights could well be you already.

Given this then there was nothing wrong with original arrangement.

All you have to do is check this out.

You say But who exactly is the Juristic Officer?

Surely you must be aware of the Juristic Person Manager. His or her name is registered at the land office and has the task of Managing the common property in the condo and ensuring that a

condo stays within the law.

You say

I don't know any Thais personally that I trust

Companies are set up all the time . I have never heard of a dodgy deal.

A Professional lawyer has too much to loose.

Having read your last post it is becoming clear to me that your mismanagement and lack of effort is the root cause of your problems

[Darrel]

Companies are set up all the time . I have never heard of a dodgy deal.

A Professional lawyer has too much to loose.

I'm guessing you dont read the local papers very often.

[BodhiBum]

No argument from me here. My misfortunes are completely of my own making. I'm just now trying to perform damage control, as I said earlier.

Darrell, I'm not sure how the Land Office would take trying to sell myself the company. But the idea could possibly be ingenious. Or they may laugh me out of the Land Office. But it's definitely worth a shot. I'll let you know how it goes.

[Darrel]

Darrell, I'm not sure how the Land Office would take trying to sell myself the company. But the idea could possibly be ingenious. Or they may laugh me out of the Land Office. But it's definitely worth a shot. I'll let you know how it goes.

There would be nothing wrong or illegal or difficult about this at all, if (and it's a big if) there is still farang-quota available for sale in the building. Bear in mind that in developments with more than one building, each building is often treated as a separate entity so "Lovely Condo 1" may be sold out in farang name but "Lovely Condo 2" may not be. This doesn't help you if your unit is in "Lovely Condo 1".

The only problem you might have (aside from your company taxes etc not being in order) is the Land Office not accepting that your original funds for purchase came from abroad.

All that said, it's more likely that the developer is just lying about farang-name units still being available in the hopes of selling more Thai-quota units in company name.

[23962323]

Darrell, I'm not sure how the Land Office would take trying to sell myself the company. But the idea could possibly be ingenious. Or they may laugh me out of the Land Office. But it's definitely worth a shot. I'll let you know how it goes.

There would be nothing wrong or illegal or difficult about this at all, if (and it's a big if) there is still farang-quota available for sale in the building. Bear in mind that in developments with more than one building, each building is often treated as a separate entity so "Lovely Condo 1" may be sold out in farang name but "Lovely Condo 2" may not be. This doesn't help you if your unit is in "Lovely Condo 1".

The only problem you might have (aside from your company taxes etc not being in order) is the Land Office not accepting that your original funds for purchase came from abroad.

All that said, it's more likely that the developer is just lying about farang-name units still being available in the hopes of selling more Thai-quota units in company name.

Darrel, week 3 of the Pattaya Times revelations,this time with documentation from land office,can the camera (or scanner) lie too?. Edited May 9, 2012 by 23962323

[Darrel]

I'm calling no one a liar (apart from perhaps the developer).

When I said "nothing wrong" I was concentrating just on the act of him selling his house out of his company name into his farang name, and assuming that there werent any basic issues with the company ownership to start with.

Obviously any particular or recent problems that might affect all company ownership would come on top of that, but presumably that would be the same regardless of who he was trying to sell to. I think that these issues are beyond the scope of this thread and fall outside what the OP wants to know about.

I looked at a recent copy of Pattaya Times on Monday over breakfast but I didnt spot the articles you mentioned.

[lovetotravel]

Many, many, many foreigners own property via Thai nominee companies. I've yet to hear of any farang who has lost their property due to this type of ownership. I understand your concern, but IMHO, wouldn't worry about it too much. Doom and gloom'ers have been talking about this for years and nothing has happened so far. Actually, things might be moving in the favor of foreign ownership. In Pattaya, they are trying to change the laws so 70% of the building can be foreign owned. And there are some rumblings about land also. But these have been ongoing rumors for years.

One of the advantages of having it in a company structure is you can easily sell it to another foreigner. For sure the best bet is to have direct ownership. But to change that now, you'll have to take the asset out of the company and pay taxes on the "sale". The downside to a company is having to pay 14k Baht/year in fees.

[Darrel]

Many, many, many foreigners own property via Thai nominee companies.

Many people do drugs here also, or work here without a permit, or overstay their visa. Does that make it advisable? The list of illegal things that many foreigners do in Thailand is very long indeed.

I've yet to hear of any farang who has lost their property due to this type of ownership.

I'm guessing you dont read these pages very often, or read the local newspapers. Buying in foreign name is the only legal way to absolutely guarantee ownership and to protect your investment. It even protects from gold-digging girlfriends.

Actually, things might be moving in the favor of foreign ownership. In Pattaya, they are trying to change the laws so 70% of the building can be foreign owned.

Indeed. And that would be precisely to reduce the number of unsold Thai-quota units hanging around and to reduce the need for dubious company structures.

One of the advantages of having it in a company structure is you can easily sell it to another foreigner.

Duh. The main disadvantage of company structures is that you can only sell to someone who either doesnt know or doesnt care about their dubious legality. Many foreigners wouldnt touch them with the proverbial bargepole.

If you want something easy to sell to foreigners just buy in foreign name in the first place. Nothing simpler and totally legit.

[TommoPhysicist]

Get your company to sell the condo to you for 1,000bht.

You will still have to pay tax on the 'real valuation' but that might not be much.

[jamescollister]

Many, many, many foreigners own property via Thai nominee companies. I've yet to hear of any farang who has lost their property due to this type of ownership. I understand your concern, but IMHO, wouldn't worry about it too much. Doom and gloom'ers have been talking about this for years and nothing has happened so far. Actually, things might be moving in the favor of foreign ownership. In Pattaya, they are trying to change the laws so 70% of the building can be foreign owned. And there are some rumblings about land also. But these have been ongoing rumors for years.

One of the advantages of having it in a company structure is you can easily sell it to another foreigner. For sure the best bet is to have direct ownership. But to change that now, you'll have to take the asset out of the company and pay taxes on the "sale". The downside to a company is having to pay 14k Baht/year in fees.

Think if you do a seach you will find the law was changed in 2009 to make nominee companies illegal. Things may move slow here, but they do move. Jim

[Darrel]

Get your company to sell the condo to you for 1,000bht.

Cant be done unless the farang quota is not sold out.

[lovetotravel]

I'm guessing you dont read these pages very often, or read the local newspapers. Buying in foreign name is the only legal way to absolutely guarantee ownership and to protect your investment. It even protects from gold-digging girlfriends.

I agree with what you are saying. If you read my post, I said direct ownership is the best bet. But if it's in a company now, he's in a bit of a pickle. But in the same jar with thousands and thousands of foreigners. Something the Thai authorities know and something they aren't going to just drastically change over night. This is a big money maker for a lot of people.

I do read these pages often. And am still waiting for a link that shows where somebody has been kicked out of their house SOLELY due to ownership being in a Thai nominee company. No extraneous factors, such as pending legal matters due to marriage or debt.

[Langsuan Man]

I do read these pages often. And am still waiting for a link that shows where somebody has been kicked out of their house SOLELY due to ownership being in a Thai nominee company. No extraneous factors, such as pending legal matters due to marriage or debt.

Other than land confiscated from a foreign motocycle gang in Phuket, you won't find it ( and that was for money laundering) . A fact that is conveniently lost on the RENT, RENT, only RENT brigade

[jamescollister]

I do read these pages often. And am still waiting for a link that shows where somebody has been kicked out of their house SOLELY due to ownership being in a Thai nominee company. No extraneous factors, such as pending legal matters due to marriage or debt.

Other than land confiscated from a foreign motocycle gang in Phuket, you won't find it ( and that was for money laundering) . A fact that is conveniently lost on the RENT, RENT, only RENT brigade

Think you will find that some Chinese had rice land confiscated last year. The new laws only came in to effect 2009 and the Government put a national police ageny as the enforcement arm. So probably not too many cops to investigate, but time is on thier side. Jim

[lovetotravel]

I do read these pages often. And am still waiting for a link that shows where somebody has been kicked out of their house SOLELY due to ownership being in a Thai nominee company. No extraneous factors, such as pending legal matters due to marriage or debt.

Other than land confiscated from a foreign motocycle gang in Phuket, you won't find it ( and that was for money laundering) . A fact that is conveniently lost on the RENT, RENT, only RENT brigade

Think you will find that some Chinese had rice land confiscated last year. The new laws only came in to effect 2009 and the Government put a national police ageny as the enforcement arm. So probably not too many cops to investigate, but time is on thier side. Jim

These are the shady deals Thailand will be focusing on. Not some foreigner with 1/2 rai of land in a village. Deals like this Chinese rice land are big ticket items. Worth pursuing for sure. Just like they are starting to pursue resorts encroaching on national forest land.