Legal definition of "Condotel" and service requirements of same

[ripley]

Hello,

As TVF members have alway been so helpful, I thought I'd ask if anyone has information on this subject. I can't find anything on the net for Thai law.

I live in a Condotel - the word "Condotel" is part of the name of our building. When I purchased, we had a 24 hour reception desk in our lobby to assist guests and owners. I assumed that this service along with the right to rent out our units privately was part of the definition of "Condotel". (condo plus hotel).

Recently, the Reception desk has been moved to another part of the building which can be accessed only with a "security button". Twenty-four hour services have been discontinued.

Does this building still fulfil the legal requirements of a "Condotel"?

[KittenKong]

Strange. What do delivery people and such-like do?

[ripley]

We are instructed to inform the Business Office btwx. 9am-5pm, they inform the security guard downstairs who then is supposed to let in delivery people, guests, etc. We are meant to trust that the message is delivered. Reception is now in a security area on another floor and on duty until 9pm, so I suppose we can inform them of guests expected and they could let the security guard know. After 9pm., we're meant to go down to the lobby ourselves to escort guests. We've been provided with a list of "Emergency numbers" in case of problems after 9pm. However, details regarding the system are sloppy at best. The only people on duty from 9pm to morning are a few security persons, including one in the lobby. None of these speak English or any language other than Thai. The telephones are out of order for an indefinite period of time which makes all of this more cumbersome. Everything is done via mobile phone and walkie talkies.

And, of course, late night arrivals receive a pretty cold reception.

When we bought into a "Condotel" we did not have any reason to expect that our lobby reception and 24hr services would be cut off. Which is one reason why I'm asking about the definition of a "Condotel" and what services the law requires a Condo to supply in order to categorize itself as a Condotel.

Edited September 2, 2014 by ripley

[KittenKong]

I dont know what the legal definition of "condotel" is, if it even has one.

In my condo building there are staff in the office in the lobby during the day, and English-speaking security guards in the lobby 24/7. It all seems to work well.

Sounds like you should be contacting your committee to find out who authorised the change and why.

[Delight]

Ripley

I have no simple answer to your Q.

My guess is that a ‘condotel’ is created when a developer sells only 50% (or there abouts ) of the apartments and kits out the balance to be rented out as hotel rooms.

If this were the case then the developer would legally control 50% of the votes.

Does this apply in your residence?

[ripley]

Although the developer has retained units in the bldg., I don't know what percentage. I don't think it's 50% or even close to that amount. I also have heard that developers create a Condotel so that they can rent out units they retain and that owners are permitted to do the same. Some of the rentals are short-term. Therefore, It would seem to me that the 24-hr service accessible reception desk would be essential. To the permanent tenants it has proved to be very useful as well.

I've looked on various Condotel sites in Pattaya and altho some of them mention 24 hour reception they also use the term "front desk" and I don't know whether that's the same thing. I've read on some sites that a Condotel must provide 24hr reception, but they aren't quoting law, just giving a description.

The first thing I did and always do on such occasions is ask the Committee and Mgr. about the change. They cite "security" and "financial" reasons and won't budge. As to "Who authorized the change?" the answer was "The Committee did." Full stop. Kitten Kong, I'm cheered to hear that the system works for you and would guess that English speaking guards make a big difference.

My notion is that if a Condotel has certain requirements in law (and our building is called a Condotel - even in its official name -) then we need to comply. But where to find the legal defnition?

I'm wondering too whether, if the brochures given to us when we purchased state 24hr reception, would that be sufficient to make it a legal requirement?

Edited September 3, 2014 by ripley

[veleron]

According to the Condominium Act, (No. 4), B.E. 2551 (2008) Section 6, It states:

"The advertising contents and pictures or letters of induction shall be deemed to be an integral part of the Agreement to Sell a Unit or the Contract of Sale of a Unit, as the case may be. Should the meaning of any contents or pictures be contradictory to or inconsistent with the contents in the Agreement to Sell a Unit or the Contract of Sale of a Unit, the construction thereon shall be made in a manner advantageous to the party to buy or the party buying the unit."

So if your condo is registered under the Condominium Act, the developer needs to provide what is stated in the brochures or marketing materials.

Edited September 3, 2014 by veleron

[Delight]

Although the developer has retained units in the bldg., I don't know what percentage. I don't think it's 50% or even close to that amount. I also have heard that developers create a Condotel so that they can rent out units they retain and that owners are permitted to do the same. Some of the rentals are short-term. Therefore, It would seem to me that the 24-hr service accessible reception desk would be essential. To the permanent tenants it has proved to be very useful as well.

I've looked on various Condotel sites in Pattaya and altho some of them mention 24 hour reception they also use the term "front desk" and I don't know whether that's the same thing. I've read on some sites that a Condotel must provide 24hr reception, but they aren't quoting law, just giving a description.

The first thing I did and always do on such occasions is ask the Committee and Mgr. about the change. They cite "security" and "financial" reasons and won't budge. As to "Who authorized the change?" the answer was "The Committee did." Full stop. Kitten Kong, I'm cheered to hear that the system works for you and would guess that English speaking guards make a big difference.

My notion is that if a Condotel has certain requirements in law (and our building is called a Condotel - even in its official name -) then we need to comply. But where to find the legal defnition?

I'm wondering too whether, if the brochures given to us when we purchased state 24hr reception, would that be sufficient to make it a legal requirement?

As you say'developers create a Condotel so that they can rent out units they retain and that owners are permitted to do the same'

Therefore a Condotel is legally a Condo . Nothing more -Nothing less.

The services that you describe i.e. 24 Hr reception -are financed from the developer's rental income ..

The actual existence of these services could well be at odds with condo law.

It largely depends on the Rules and Regs.

Therefore you accept that these 'extra'services will come and go subject to demand for the ;hotel' part - or you challenge their right to exist.

For certain you cannot challenge alone.

Suggest that you take no action

[ripley]

Veleron - I don't know whether I have all of the brochures/advertising do do with the condo, the brochure I have doesn't mention a reception desk. Funny, actually, as it does mention unobstructed sea views and access as well as "white sand beaches" - none of which we have!! Don't know how they planned to provide all that sand....

Thanks for your advice, Delight. Tho I'll take it to heart I still want to know the definition of "condotel", etc. Have a question lodged with the TVF "ask the lawyer service" but no answer as yet. I'll post it here if I get an answer. I do think that it's an important question.

[ripley]

I'm curious. How could 24-hr reception be in "at odds with condo law'?

[Delight]

Condotels are a product of the market.

A developer need only sell a portion of the apartments in a condo block

Those that don’t sell can be kitted out as hotel rooms-then sold as apartments over time. In the meantime they provide an income stream

The interests of the owners can be at odds with the interests of the guests-particularly as related to ‘quiet living’

To justify a 24 hour reception a substantial number of hotel rooms must exist.

If this number is only say 10% of the total –then the developer has limited control.

If however the number represents 30% + of the total –then the developer will control the AGM vote and as such controls the whole of the common area, maintenance fees and maintenance activity

This assumes that the current level of co –owner apathy does not change

That said –I see that condotels are what’s happening now and the way of the future.

In time maybe new legislation will be generated to accommodate both the interests of both co –owners and hotel guests

[ripley]

Interesting. I take your point about "quiet living" and also about developer owned unit percentages. From scanning the net for "Condotels" in Pattaya, I didn't find very many. Was thinking that they were not popular and phasing out.

In our building, so far as I'm aware, developers still own units and owners rent out their units as well. Most owners rent out for a minimum of 1 month. If the developers rent out for less time or even by the day or wknd. they're certainly discreet about it, it's not obvious as there is no negative impact. Perhaps renting out "hotel style" was their original concept since abandoned. I've liked the word "condotel" included in our name because there is never any challenge to owners who wish to rent out their flats.

On TVF I've noticed some complaints posted about owners doing that, but I reckon that if everyone abides by the rules of behaviour, etc. there's no problem. The owner takes full responsibility for his client.

I have a question in to "Ask the Lawyer" on TVF which, so far, has been ignored. And if condotels are indeed the way of the future, I think a legal definition is essential for the protection of all concerned. Hard to believe that laws don't exist. "To justify a 24-hr. reception a substantial number of hotel rooms must exist....etc" Is this information from your personal "take" as a business person, or do you have a source you can share?

Thanks for the info, as usual!

[Delight]

Ripley

To my mind all the high rise condos (new or under construction ) call themselves Condos –but are in fact Condotels.

A case in point is ‘The Cliff’

Describes itself as a 426 apartment condo.

It is a Condotel.

Hotel rooms for this Condotel are available from ,as an example,Booking.Com

There are so many Condos under construction that they will never find buyers –in the ordinary way.

The Cliff is in an area locally referred to as Cozy Beach

Booking.com also offer hotel rooms for’ The View’

‘

Next door to ‘The View ‘is ‘The Cosy Beach View’

If you want a room there then visit ‘Hotels 2 Thailand’

Last time I checked there were 2000+ apartments /hotel rooms in the area - new or under construction

Suspect that they all have the ‘Russian Tourist Market’ in mind.

The recent 25% depreciation of the Rouble to the Dollar will not work in their favour.

Possibly the current almost zero % Govt. bond rates has influenced all this investment in property.

The way I see it Condotels are happening now.

As for’ but I reckon that if everyone abides by the rules of behaviour, etc. there's no problem. The owner takes full responsibility for his client’

tell that to the Russian tourists who party every night.

.

My reference to ’24 hour receptions ‘is just a subjective view.

As for future legislation to cover Condotels –I very much doubt it.

The only reason that Thailand has a the Condo Act was because the IMF demanded it (condition of a bail out loan in 1979).

It may come –but only if the current batch of Condotels all go the shit.

The reply from your 'Ask the Lawyer'post will be interesting!

Edited September 6, 2014 by Delight

[trogers]

Does one not need a business licence and tax registration to operate a hotel?

[KittenKong]

Does one not need a business licence and tax registration to operate a hotel?

You are supposed to have these to rent out rooms on a daily basis. In practice hardly anyone who rents daily condo rooms seems to have either, or to declare the income.

Personally I'm a bit surprised that there isn't a stream of anonymous tip-offs being given to the tax people, and another stream of legal challenges from bona fide hoteliers.

[ripley]

I posted the question on "Ask the Lawyer" - got no answer and a few days later noticed that the question was no longer on the list! So I've posted it again because I, too, would be most interested in the answer.

[ripley]

Still no response from 'Ask the Lawyer'.

I'm beginning to think there isn't a legal definition for condotels in Thai Law, nor any law governing them.

Edited September 12, 2014 by ripley

[Delight]

Ripley

The Lawyer has responded to your post.

His reply is:-

'A condotel is a lodging that is a hybrid of a condominium and hotel, by being operated as a commercial hotel even though the units are individually owned. A condotel has rental and reservation desks, short-term occupancy, food and telephone services, and daily cleaning services. Rooms in hotels are sold individually to buyers who typically continue renting them to vacationers. In-house management companies rent out the units on behalf of their owners in exchange for a percentage of the rental income. Condotels differ from time shares, where buyers pay for limited use of a resort, because buyers of a condotel own their residence outright and can stay in it, rent it out, or sell it according to their own wishes'.

As I see it ,this is the response as from a business man -not a lawyer

Edited September 16, 2014 by Delight

[ripley]

Reply to the question from TVF "Ask the Lawyer" service:

Posted 2014-09-15 15:52:21

A condotel is a lodging that is a hybrid of a condominium and hotel, by being operated as a commercial hotel even though the units are individually owned. A condotel has rental and reservation desks, short-term occupancy, food and telephone services, and daily cleaning services. Rooms in hotels are sold individually to buyers who typically continue renting them to vacationers. In-house management companies rent out the units on behalf of their owners in exchange for a percentage of the rental income. Condotels differ from timeshares, where buyers pay for limited use of a resort, because buyers of a condotel own their residence outright and can stay in it, rent it out, or sell it according to their own wishes.

[ripley]

Sorry, I picked up the reply from the TVF lawyer site & posted it before seeing Delight's comment. A business man? But it's "Ask the Lawyer".

[Senechal]

I really don't like condotels as an investment at all, and this is a pretty good example why.

Here's the problem: Regular condominiums are ultimately corporations held by shareholders, and those shareholders are the owners of the units. That joint ownership provides a level of business security because what is in the interest of the group, is typically in the interest of each individual owner. (Although this is not always the case, as differences among owners certainly do arise). For the most part though, owners interests are aligned. This alignment of ownership interests insures at some level, that the maintenance and policies of the building will reflect the wishes of the group.

The same cannot be said for many condotels.

[ripley]

Request for details from "Ask the Lawyer" were answered thus:

Legal requirements include having all of the proper licenses such as a hotel license etc. there are no specific laws or rules and regulations for condotels, you must use both condominium laws and hotel laws together.

I want to take this opportunity to thank TVF and Siam Legal for this most useful service. Really helpful!

Edited September 20, 2014 by ripley

[ripley]

I really don't like condotels as an investment at all, and this is a pretty good example why.

Here's the problem: Regular condominiums are ultimately corporations held by shareholders, and those shareholders are the owners of the units. That joint ownership provides a level of business security because what is in the interest of the group, is typically in the interest of each individual owner. (Although this is not always the case, as differences among owners certainly do arise). For the most part though, owners interests are aligned. This alignment of ownership interests insures at some level, that the maintenance and policies of the building will reflect the wishes of the group.

The same cannot be said for many condotels.

As the units are owned by shareholders whose interests are very much focussed on the well-being of the bldg., its services and the corporation as a whole, I've never perceived this as a problem. An owner is entitled to rent out his unit but is as responsible for the behaviour of his tenant as he is for his own. I suggest that, if an owner is receiving income from rentals, that owner is perhaps even more invested in the upkeep and well-being of the condotel. Also, a tenant is not allowed to attend AGMs, vote, etc.

Perhaps the confusion is - again - in the definition and actual usage of a Condotel. I'm speaking of a Condotel which doesn't deal in overnights and weekends but rather monthly or more long-term rentals. It appears that owners could legally rent out by the day but they don't because this is labour intensive and impractical.

My experience is that although any condominium building is enhanced by a lobby reception desk, a Condotel requires one. I wanted to discover whether this is codified in Law. What's your "take" on the Lawyer's reply? I think it would be difficult to pursue in court, but if the laws - such as they are - are contained in hotel as well as condo law it's a case that could be won. At the same time who knows what a can of worms this issue could open??