Good Lawyer, Unpaid Condo Fees

[PingandSingh]

Hi,

Can someone point me to a good lawyer or accountant having decent knowledge of the "Thai Condo Act"?

I need information on how the interest and penalties are calculated over unpaid condo fees for over 10 years +?

I want to buy a condo from someone not having paid those fees for a long time and the building will claim the fees on me.

Thanks.

[Dante99]

Why don't you just ask the "building" for the amount due including interest, in writing on official "building" stationary? If they will not give it to you, ask the current owner to get that information for you, if he can not or will not, do not buy.

If you proceed with the purchase, you should have a very clear clause in the purchase contract that limits your liability for condo fees to a specific amount with the seller being responsible for anything over the specified amount.

[mascarakatze]

The unit cannot be sold without a letter from the juristic manager stating that their are no liens on the property as far as unpaid fees are concerned.

[PingandSingh]

Thanks, however, I know all this already.

I have the figures from the building, I just want to know if correct.

I am not familiar with the interest rates and penalties for unpaid condo fees in Thailand. It is a huge amount (one could buy a decent condo for the unpaid balance) and I would like to know,if not correct. something could be done.

I think this is stuff for a lawyer or someone who knows exactly the procedures.

Cheers

[Greenside]

The unpaid fees are between the condo management and the current owner. All you should be worried about is the price that you are prepared to pay the owner - if he/she doesn't have the money to front it so the management can give provide him with the letter that makes the transfer possible then be wary of the whole deal as he could simply have the manager come to the Land Office to get the back fees at the same time as the transfer. That's not to say that having some professional advice isn't a good thing but stay out of the loop over back fees.

You should also be sure to have copies the latest accounts for the building (2 x annual and last month's) and the minutes of the last General Meeting and pay particular attention to the sums outstanding for unpaid service charges. There are no acceptable excuses for these not to be available - if they are not then talk to more than one existing owner about the conduct of the management and be prepared to walk away from the deal. Believe nothing the vendor, his agent or the management tell you however charming they are.

Seriously, you do not want to be investing in a building with corrupt and/or incompetent mafia-like management - it will sour the whole experience of being a condo owner in Thailand and only once you are committed will you realise how powerless you are in the face of "Big Power".

[PingandSingh]

I would like to buy the 200+ sqm condo on the 11 th floor at 103 Skybreeze. It stands now at 1.8 M + unpaid condo fees of about 500.000 +

If I remember well the condo charges 20 % interest over unpaid condo fees.

I think 20% is far too much but where to check if they allowed to do that?

[Greenside]

I would like to buy the 200+ sqm condo on the 11 th floor at 103 Skybreeze. It stands now at 1.8 M + unpaid condo fees of about 500.000 +

If I remember well the condo charges 20 % interest over unpaid condo fees.

I think 20% is far too much but where to check if they allowed to do that?

You need to understand that they can (and will) do exactly as they like regardless of the Condo Act or any other kind of law on the books. I have known two people come to regret getting involved with a purchase where the back charges were rolled into the purchase and somehow later it was found that they under-calculated some part of what was owing and got landed with an unexpected bill.

I know nothing about the management of Sky Breeze and I'm sure the apartment is wonderful, but the only question you should be asking is whether 2.3m is an acceptable price. If the vendor wants you to buy it, let him do the negotiating over his own debt first. The bit of paper that says it's clear and free at the time of purchase is your only guarantee that you won't get hit for some suddenly discovered shortfall.

Really.

PS On another note, you should be aware that unpaid condo fees are the main reason so many of these older buildings are struggling. The managements are often too lazy to really chase the owners (and they have little in the way of tools to help them collect) so the fees mount up while the building needs attention. If you do become an owner you'll start to think that 20% isn't high enough!

Edited March 8, 2013 by Greenside

[hellodolly]

Thanks, however, I know all this already.

I have the figures from the building, I just want to know if correct.

I am not familiar with the interest rates and penalties for unpaid condo fees in Thailand. It is a huge amount (one could buy a decent condo for the unpaid balance) and I would like to know,if not correct. something could be done.

I think this is stuff for a lawyer or someone who knows exactly the procedures.

Cheers

Not sure if there is any figures in the law. I believe each condo committee can set up it's own penalty system and when the unit is sold clear title will not be issued until all bills against the unit are settled.

[Berkshire]

I would like to buy the 200+ sqm condo on the 11 th floor at 103 Skybreeze. It stands now at 1.8 M + unpaid condo fees of about 500.000 +

If I remember well the condo charges 20 % interest over unpaid condo fees.

I think 20% is far too much but where to check if they allowed to do that?

Why not just offer the owner 1.8M - unpaid fees, or 1.3M? You're still taking a risk, as others have opined, but at least it's minimized a bit.

[indothai]

I'm not sure if they can legally collect interests on unpaid condo fees, I've heard mixed stories and and I cannot confirm details. The condo committee/management can put in "conditions" over unpaid fees, but the legality of it is very very foggy.

There is also a statute of limitation on these fees.

Investigate thoroughly, hire good lawyers, never trust someone that knows it all, be careful, & good luck.

Kind regards,

A condo owner.

[MESmith]

Not sure it was wise to post about a 1.8m+ baht 200sq m condo for sale on a public forum. I imagine there might be a great deal of demand for it now. My understanding was 103 #4 was well run & is in a decent location.

[kcore]

/\

I am on my way over to make a offer!

[Maestro]

From the OP:

I need information on how the interest and penalties are calculated over unpaid condo fees for over 10 years +? 

...

I have the figures from the building, I just want to know if correct.

I am not familiar with the interest rates and penalties for unpaid condo fees in Thailand. It is a huge amount (one could buy a decent condo for the unpaid balance) and I would like to know,if not correct. something could be done.

I think this is stuff for a lawyer or someone who knows exactly the procedures...

Section 18/1 of the Condominium Act B.E. 2522 (1979), added by Condominium Act (No. 4) B.E. 2551 (2008), stipulates the following interest rates:

10% p.a. for payments overdue up to six months

20% p.a. for payments overdue longer than six months

You are quite right, overdue payments plus interest can add up to quite a substantial amount over a ten-year period. The law says nothing about the method of calculation, for example compound interest, and I am not personally familiar with any case. The juristic person manager should be able to give information about it.

P.S. I just reread section 18/1 and it says "non-compounded interest"

Condominium Act - 2522 1979 - updated until 2008.pdf

[Phronesis]

Define GOOD...

[Dante99]

If the building management lets owners run up 500,000 Baht in unpaid bills, why would you want to buy a unit in such a building? Management should have long ago proceeded with legal process to collect. But I don't know much about condos in CM, I only know one guy who owns one and he has had the Thai tax collectors after him for several years to collect 12,000,000 Baht they say he owes so he will not be owing it much longer.

Could be a wide spread problem though as I know of a high end land development where the developer manager collects maintenance fees from only about 25% of the land owners and that has been going on for years.

[market trader]

Look you see the potential problems. Why ask for trouble. Just stay clear and look elsewhere.

[market trader]

The area I live in housing developments and condos are being built like there is no tomorrow. The development I live in which is now 15 years old 5% of the houses are empty. Who is the potential buyer? Certainly not the Thai earning 300 bahts per day. Certainly not my doctor friend who is earning a pittance compared to what I earned in Canada. The Chinese? Japanese? Russians?

[Sojourner]

The Condo Act of 1979 has been superseded by the Condo Act (No.4), B.E. 2551,

Quote; Section 18/1, In the case where the co-owner fails to pay the money under Section 18 within the prescribed period, he must pay a surcharge at a rate of not exceeding twelve percent per year of the due amount without compounding, as prescribed in the articles of association.

The co-owner who is in arrears with the money under Section 18 for six months or more must pay a surcharge at a rate not exceeding twenty percent per year and may suffer a suspension of the provision of such common services or the use of such common property as prescribed in the articles of association, including not having the right to vote at a general meeting.

The surcharge under paragraph one shall be regarded as being the expense under Section 18.

[PingandSingh]

Thanks for all the info.

Does that mean they can charge 20% over the unpaid balance including the 12%?

300.000 unpaid fees + 250.000 (let's say on 12% calculated over the years)= 550.000 total + 50.000 (250.000 x 20%) = 600.000.

or

Does that mean they can charge 20% instead 12% starting after 6 months?

Huge difference in both calculations.

Thanks

[nontabury]

A bit off topic,but does anybody know how the management of a condo can force the condo owner to pay the maintenance

Fee.The reason Iask this ? is I have a condo in Bkk,and the management tells me it's a major problem for them,they simple don't have any powers to force the bad payers to pay up, seemingly the only thing they can do is wait and hope that the condo owners will one day want to sell his unit,in the meantime they can enjoy all the amenities,and expect the building to be maintained.

[Sojourner]

A bit off topic,but does anybody know how the management of a condo can force the condo owner to pay the maintenance Fee.The reason Iask this ? is I have a condo in Bkk,and the management tells me it's a major problem for them,they simple don't have any powers to force the bad payers to pay up, seemingly the only thing they can do is wait and hope that the condo owners will one day want to sell his unit,in the meantime they can enjoy all the amenities,and expect the building to be maintained.

If the juristic manager has any balls he or she can shut off the utilities to the condo or can take them to court. If the unit is not occupied then the juristic manager can attempt to sell the unit to re-claim the fees owed. It all depends on how well connected the owner of the building is or the co-owner.

For PingandSingh, the 12% changes to 20% once the six month threshold is passed.

[nontabury]

A bit off topic,but does anybody know how the management of a condo can force the condo owner to pay the maintenance Fee.The reason Iask this ? is I have a condo in Bkk,and the management tells me it's a major problem for them,they simple don't have any powers to force the bad payers to pay up, seemingly the only thing they can do is wait and hope that the condo owners will one day want to sell his unit,in the meantime they can enjoy all the amenities,and expect the building to be maintained.

If the juristic manager has any balls he or she can shut off the utilities to the condo or can take them to court. If the unit is not occupied then the juristic manager can attempt to sell the unit to re-claim the fees owed. It all depends on how well connected the owner of the building is or the co-owner.

For PingandSingh, the 12% changes to 20% once the six month threshold is passed.[/

The condo manager says it's pointless to disconnect the water supple because the none payers just simple reconnect.

Regarding the electricity supply,they seem to think they have no authority over the elect connection,both of these excuses may be because the manager has been threatened on occasions by these free loaders.

[cyprean]

Lawyers here like to charge a lot of money, and even offer the other party to pay them to get a better result, so I would just contact the condo manager instead of getting ripped off by lawyers.

[Greenside]

I don't think the OP has really grasped the point.

The management (or Juristic Person, they may be one and the same) has demonstrated that he's either lazy, ineffectual or perhaps even profiting out of a situation where back charges are allowed to build up to this level and it should be a big red flag for anyone considering a purchase. Assuming the accounting and statutory obligations have been met (ie audited annual accounts, monthly posted accounts and regular meetings) then at least you can get a handle on the scale of the problem but if what you are offered is a lot of excuses then beware. Getting involved to challenge vested interests in this kind of situation can be stressful at best and at worst even threaten your continued domicile in The Kingdom or personal safety.

By posting further questions about the way the rates are calculated or legal issues surrounding collection you are assuming that the rules actually count for something. Believe me, they don't. It may be this building is in good shape financially despite the arrears this particular seller has run up but I really urge you to stand aside and let him settle his own debt and not let it become part of your deal.

Edited March 10, 2013 by Greenside

[Maestro]

Thanks for all the info.

Does that mean they can charge 20% over the unpaid balance including the 12%?

300.000 unpaid fees + 250.000 (let's say on 12% calculated over the years)= 550.000 total + 50.000 (250.000 x 20%) = 600.000.

or

Does that mean they can charge 20% instead 12% starting after 6 months?

Huge difference in both calculations.

Thanks

I can't make sense out of your figures. The way I read the English translation of the law I would say that if the arrears are not more than six months, the interest is 12%. If it is more than six months, the interest is 20% on the total overdue amount. Let's say:

Monthly common fee THB 2,000

Overdue for 6 months, ie 6x2,000 = THB 12,000

Interest: 12% of 12,000 = THB 1,440

Overdue for 5 years (60 months), ie 60x2,000 = THB 120,000

Interest: 20% of 120,000 = THB 24,000

As always, when in doubt refer to the original Thai text, which is the only valid one:

มาตรา 18/1 ในกรณีที่เจ้าของร่วมไม่ชำระเงินตามมาตรา 18 ภายในเวลาที่กำหนด ต้องเสียเงินเพิ่มในอัตราไม่เกินร้อยละสิบสองต่อปีของจำนวนที่ค้างชำระโดยไม่คิดทบต้น ทั้งนี้ ตามที่กำหนดในข้อบังคับ

เจ้าของร่วมที่ค้างชำระเงินตามมาตรา 18 ตั้งแต่หกเดือนขึ้นไปต้องเสียเงินเพิ่มในอัตราไม่เกินร้อยละยี่สิบต่อปี และอาจถูกระงับการให้บริการส่วนรวมหรือการใช้ทรัพย์ส่วนกลาง ตามที่กำหนดในข้อบังคับ รวมทั้งไม่มีสิทธิออกเสียงในการประชุมใหญ่

เงินเพิ่มตามวรรคหนึ่งให้ถือเป็นค่าใช้จ่ายตามมาตรา 18

[hourlay]

Maestro, You are right.

If monthly fee THB 2,000 => Overdue for 5 years= THB 144,000

Thus if the outstanding amount is 500 000 bath , it means that the monthly fees are around 6000 bath a month...

[PingandSingh]

Maestro,

Is it not:

1 st year 12 x 2000 = 24000 x 20% = 4800 x 5 years = 24000

2 nd year 12 x 2000 = 24000 x 20% = 4800 x 4 years = 19200

3 rd year 12 x 2000 = 24000 x 20% = 4800 x 3 years = 14400

4 rd year 12 x 2000 = 24000 x 20% = 4800 x 2 years = 9600

5 th year 12 x 2000 = 24000 x 20% = 4800 x 1 years = 4800

total 72.000

Your calculation gives 24,000 This calculation gives 72.000 as the total over the same period

Huge difference and which one is correct?

[Maestro]

My calculation is correct.

[wooloomooloo]

None of you are grasping the calculation of interest.

[Greenside]

If the annual accounts for the building are up to date their should be a breakdown of the common area service charges owed by apartment number. If there are no accounts, walk away.