Development Community

[tiger36]

Stupid question but I'm thinking of buying a villa in a development. Who owns the swimming pool, club house, community grounds? If is the developer, what happens if he sells them after selling the villas?

[Nadia 2]

Stupid question but I'm thinking of buying a villa in a development. Who owns the swimming pool, club house, community grounds? If is the developer, what happens if he sells them after selling the villas?

You can ask the developer, but from what I see, mostly, the developer subdivides a larger plot into smaller resalable plots which will be owned or leased by the individual foreign purchasers. The developer will mostly be left with one title deed which includes the development road and common areas like swimming pool etc. and you will have to pay to the developer a yearly 'maintenance' fee. This can be something like 5,000 THB or more A MONTH. Often it is a bit vague what you get for it and how this amount is calculated and how it may increase in the future.. It is a nice extra profit. Mostly the developer will first register a lease or sell and transfer the land to a landholding company (which is illegal in the first place - this is in Thailand and especially in the long term not a secure option – see several recent posts about this subject). Then you will have to pay a substantial deposit/ first payment installment to the developer before they even start building (you of course already paid for the land).

From what I see the first installment can be an amount that will cover the total costs of the building and everything you pay after that will be profit for the developer… Note that any payment will be unsecured and as there is no legal requirement for something like escrow accounts in Thailand, other than taking a civil action against the developer (in most cases worthless), there is really nothing you can to do to recover your payment in case of.... You will be a at the mercy of the developer (see post 'bamboozled by farang developer').

In the Western world a written contract provides for both parties the legal mechanism to get what is agreed-upon. Unfortunately in Thailand a contract offers the foreign purchasers little to no protection(and with an in fact illegal ownership you do not want to go to court). Procedures are lengthy, the outcome uncertain and in the end the developer will be long gone and his company dissolved. Too many purchasers in the past few years have paid deposits but the development was never started or is standing in a state of partial completion…

Cheers and beware