Condo Owners association - really necessary?

[jimmybcool]

Hi All,

I am soliciting opinions. If you were in the market for a condo would a condo owners association and associated books be mandatory for you? Or would you accept the premise of a well maintained building by the original developer who was operating a hotel business in his part of the building?

I am also curious and how difficult to establish one is when there are few full time residents in the building. Think maybe 6-7 full time residents.

Thanks for any education on this.

[ripley]

I can see how the circumstances would make you feel you were home and dry. But over time things do change and it's good to be prepared.

In my opinion, every co-owner of a condo should have a copy of the Regulations, a monthly audit, an AGM, a Committee of at least 3 people and a Juristic Person Manager who is approved or elected by the owners at an AGM. (a committee is not the same thing as a "co-owner association".)

You may feel you don't need them but come the day when you do need them - you REALLY do!

[jimmybcool]

I can see how the circumstances would make you feel you were home and dry. But over time things do change and it's good to be prepared.

In my opinion, every co-owner of a condo should have a copy of the Regulations, a monthly audit, an AGM, a Committee of at least 3 people and a Juristic Person Manager who is approved or elected by the owners at an AGM. (a committee is not the same thing as a "co-owner association".)

You may feel you don't need them but come the day when you do need them - you REALLY do!

[jimmybcool]

Thanks. I think I agree with you. For a follow up, if you were in the market for a condo today, and saw one you liked in a building that had neither juristic nor accounts for the building would you still purchase in that building?

What if the developer (who still owned over half the building and operated a hotel business) assured you he would take care of all maintenance issues for your annual maintenance fee?

[harrry]

If it is a condo it must have a committee. If it is not you own nothing.

[smutcakes]

Thanks. I think I agree with you. For a follow up, if you were in the market for a condo today, and saw one you liked in a building that had neither juristic nor accounts for the building would you still purchase in that building?

What if the developer (who still owned over half the building and operated a hotel business) assured you he would take care of all maintenance issues for your annual maintenance fee?

Following on a little from what Harrry alludes to, a condo cannot be called a condo until it is registered as a Juristic Person Condominium, and to do that at Registration they must have a Juristic Person Manager (JPM). I understand in the early days prior to the first General Meeting of Co-owners there will not be a Committee, and the issues some people have is the Developer (Normally also a representative of who will be the JPM) at the outset can simply not choose not to have the first General Meeting, the penalty for which is fairly trivial.

I would advise a couple of things:

1) Check the regulations to assess whether the hotel is legitimate and has a hotel licence. As far as I am aware, it is not possible to get a hotel licence within a registered condominium, although Serviced Apartment licences are attainable. I believe only State Tower? is the one with a hotel licence and is a registered Juristic Person.

2) Why would the developer offer to absorb your maintenance fees?

3)You sure its a condo, not an apartment

If something is to good to be true it normally is, I cannot understand why a developer would offer to absorb your fees. I would look carefully into this before committing. It may seem like a good thing at the current time, but you never know what will happen 5-10 years down the line.

[jimmybcool]

Thanks. I think I agree with you. For a follow up, if you were in the market for a condo today, and saw one you liked in a building that had neither juristic nor accounts for the building would you still purchase in that building?

What if the developer (who still owned over half the building and operated a hotel business) assured you he would take care of all maintenance issues for your annual maintenance fee?

Following on a little from what Harrry alludes to, a condo cannot be called a condo until it is registered as a Juristic Person Condominium, and to do that at Registration they must have a Juristic Person Manager (JPM). I understand in the early days prior to the first General Meeting of Co-owners there will not be a Committee, and the issues some people have is the Developer (Normally also a representative of who will be the JPM) at the outset can simply not choose not to have the first General Meeting, the penalty for which is fairly trivial.

I would advise a couple of things:

1) Check the regulations to assess whether the hotel is legitimate and has a hotel licence. As far as I am aware, it is not possible to get a hotel licence within a registered condominium, although Serviced Apartment licences are attainable. I believe only State Tower? is the one with a hotel licence and is a registered Juristic Person.

2) Why would the developer offer to absorb your maintenance fees?

3)You sure its a condo, not an apartment

If something is to good to be true it normally is, I cannot understand why a developer would offer to absorb your fees. I would look carefully into this before committing. It may seem like a good thing at the current time, but you never know what will happen 5-10 years down the line.

Thanks for the reply.

1) I am not 100% certain of anything. The building is called a condotel. I have no idea if his business is registered as serviced apartments or a hotel license is owned.

2) He isn't offering to absorb our maintenance fees. he collects them from the few condo owners each year and performs maintenance. Of concern is there are no books or accounts to examine. I am paying 26,700 baht a year for an 80 sqm condo.

3) How could it be an apartment when I have a sales title? At the time of purchase I looked up an independent real estate lawyer here and had them assure me I was signing a sales document. I assume they are right. I got the tor tor and other stuff at the time of sale.

I purchased 6 years ago off plan. The building is complete and I live here part time. Overall I am happy with the condo and maintenance. What I worry about is there has never been a formal condo owners association or juristic and the developer is doing his best to talk everyone out of it again.

If I ever wish to sell I am unclear on how much more difficult it will be without any building accounts or books for a prospective buyer to examine.

And I am concerned that the developer who is older than I will either pass away or sell his business (which he has been trying to do for over a year). In either case even assuming I trust the original developer to cover any unexpected maintenance costs I have no reason to trust the next guy.

But I am not the smartest guy in the world so I am looking for opinions here to see if ANYONE takes the side that says what is currently happening is normal and OK, and that they would not hesitate to buy into such a building. Anyone?

[smutcakes]

Thanks. I think I agree with you. For a follow up, if you were in the market for a condo today, and saw one you liked in a building that had neither juristic nor accounts for the building would you still purchase in that building?

What if the developer (who still owned over half the building and operated a hotel business) assured you he would take care of all maintenance issues for your annual maintenance fee?

Following on a little from what Harrry alludes to, a condo cannot be called a condo until it is registered as a Juristic Person Condominium, and to do that at Registration they must have a Juristic Person Manager (JPM). I understand in the early days prior to the first General Meeting of Co-owners there will not be a Committee, and the issues some people have is the Developer (Normally also a representative of who will be the JPM) at the outset can simply not choose not to have the first General Meeting, the penalty for which is fairly trivial.

I would advise a couple of things:

1) Check the regulations to assess whether the hotel is legitimate and has a hotel licence. As far as I am aware, it is not possible to get a hotel licence within a registered condominium, although Serviced Apartment licences are attainable. I believe only State Tower? is the one with a hotel licence and is a registered Juristic Person.

2) Why would the developer offer to absorb your maintenance fees?

3)You sure its a condo, not an apartment

If something is to good to be true it normally is, I cannot understand why a developer would offer to absorb your fees. I would look carefully into this before committing. It may seem like a good thing at the current time, but you never know what will happen 5-10 years down the line.

Thanks for the reply.

1) I am not 100% certain of anything. The building is called a condotel. I have no idea if his business is registered as serviced apartments or a hotel license is owned.

2) He isn't offering to absorb our maintenance fees. he collects them from the few condo owners each year and performs maintenance. Of concern is there are no books or accounts to examine. I am paying 26,700 baht a year for an 80 sqm condo.

3) How could it be an apartment when I have a sales title? At the time of purchase I looked up an independent real estate lawyer here and had them assure me I was signing a sales document. I assume they are right. I got the tor tor and other stuff at the time of sale.

I purchased 6 years ago off plan. The building is complete and I live here part time. Overall I am happy with the condo and maintenance. What I worry about is there has never been a formal condo owners association or juristic and the developer is doing his best to talk everyone out of it again.

If I ever wish to sell I am unclear on how much more difficult it will be without any building accounts or books for a prospective buyer to examine.

And I am concerned that the developer who is older than I will either pass away or sell his business (which he has been trying to do for over a year). In either case even assuming I trust the original developer to cover any unexpected maintenance costs I have no reason to trust the next guy.

But I am not the smartest guy in the world so I am looking for opinions here to see if ANYONE takes the side that says what is currently happening is normal and OK, and that they would not hesitate to buy into such a building. Anyone?

Jimmy,

If you are not sure on half the things yourself it is very difficult for anyone to comment to much. If you are really worried perhaps get a lawyer to investigate, although i think this is a little OTT. Perhaps just go to speak to the guy, and explain your concerns. As you say you are not complaining about the standard of his upkeep of the property, so he wont need to get defensive. Just ask him in the event you need to sell your unit, who would issue the debt free certificate, which should be issued by the JPM. If you can locate the JPM you can ask them about the accounts of the building. One of their main responsibilities is to publish monthly statement of account of the Condominium no later than the 15th of the month, otherwise they are committing a criminal (?) offence. If when you try to speak to these people you should be able to guage in their reaction whether something is amiss, and if so maybe it is time to ask a lawyer to look into it.

I understand your concerns but i think you need to do a little bit more investigating yourself before people can offer much advice. I know a few 'Condotel's' which are simply condominiums. I would not read to much into the name.

By my calculation you are paying a common fee of about 28 baht sqm/month which is on the low side for Bangkok/Pattaya/Hua Hin, but is within a normal range, neither crazy high or low.

[ripley]

Sure sounds to me like you're living in a "Condotel". I think that your developer is obliged by law to set up an AGM to elect a committee, JPM and to provide you with a copy of the condo regulations

Like I said before, things do change. Without the above representation, Maintenance rates can escalate without warning, standards of service and cleanliness can decline. The developer could change his usage of the building from an hotel to an "entertainment center" or some other business which would drastically affect your lifestyle. . And, of course, should he die or otherwise surrender his ownership you'll have a new owner with perhaps a different agenda to cope with.

I sympathize. I really do.( I've always wanted to live in a nice hotel where they take care of all the headaches.) But my experiences as well as the experiences of people on TVF have taught me to use extreme caution.

[jimmybcool]

Thanks Smutcakes and Ripley,

I know for certain there is no accounting or separate management. The developer collects our maintenance fees and mixes them with his general hotel business income and considers it revenue. He maintains the building form his general fund.

Regarding the annual fee and it's size it might be around the right amount but isn't a percentage of that set aside each year for long term issues like painting and elevator repair? A "sinking fund"? We have none so in reality we pay too much to simply do nothing unless he reaches into his pocket when/if such an expense arises. Since he is trying to sell his hotel business I doubt the buyer (if he can find one) will assume the same liability when the regular deposits into such accounts have not occurred and the developer seller simply walks away.

There is no juristic.

There are no monthly statements.

Sorry I can't offer more specifics. I think this IS all there is. A building where the proper legal path has not been implemented.

Is this common? Does it prevent people from buying and selling?

I think it would stop me from buying into the building. I bought while under construction and "assumed" I would be provided legitimate vision into the status of the buildings financial situation upon completion. Now the developer is balking after 7 years. Should not have waited this long/

[ripley]

You might try selling the unit back to the developer. Or perhaps to another owner who likes the situation.

[jimmybcool]

You might try selling the unit back to the developer. Or perhaps to another owner who likes the situation.

Yeah. But, at what price? With no open market the developer isn't actually motivated to offer the going rate is he? And I might find an interested buyer who doesn't care about this situation. It appears from this thread no one here would be. That means I have a reduced sales market and reduced value. And that is the crux of the issue.

I am actually not looking to sell my condo at this time. I like it. but I want the option of doing it in future as it is an asset with real value. And I feel that I don't have that option without the legal form of building management.

[harrry]

Make a query to the department handling the conominium act. My understanding is they enforce the requirements about reporting and agms and committee very strongly. I understand they will even send someone to attend a meeting if asked.

[rayongchelsea]

He isn't complying with the law period.

As previously stated ask for the rules and regulations booklet.

Go to the land department and ask these questions to them.

What is in your original contract regarding cam fees etc..

My lawyer had to do a lot of investigating for me at the land dept. when I happened to start asking questions to our developer/ committee - complete waste of time, hiding a multi- tude of sins, which eventually resulted in a group of co-owners filing a law suit.

Good luck.

[ripley]

Y'know, asking the Developer if he's interested in buying your unit - whether or not you want to sell it - might yield some interesting information for you. It would most likely start a dialog.

[jimmybcool]

Y'know, asking the Developer if he's interested in buying your unit - whether or not you want to sell it - might yield some interesting information for you. It would most likely start a dialog.

He is having these discussions with another owner who does want to sell. They are far apart in price. The owner does want an unreasonable number (if the number is what the developer tells me - I don't know). But I know he has always said he'll buy mine back for what I paid. But I purchased an empty shell at discount when he was desperate for cash to continue construction. I then fitted it out with a superior European company for about 2 million baht. SO that is a non-starter.