Clarification needed on foreigner quota

[Senechal]

Anyone knowledgable about foreigner quotas? I'm not clear on a couple points:

When foreigners consider a condo purchase, is the only important question for potential foreign purchasers "what is the current ratio of foreigners to Thais?"

Or are individual units within a building marked / allocated in advance as eligible or ineligible for foreign purchase?

In other words, is it possible that a building has (for example) only 10% foreigners, but a specific individual unit within that building is not eligible for foreign ownership because it isn't "allocated" to foreign ownership?

Also: Prior to purchase, what sort of documentation other than a wink and the word of the seller is suggested to prove foreign ownership eligibility?

Is there some risk that post-purchase a condo might actually not be eligible, and the sale void?

Edited October 31, 2014 by Senechal

[steveromagnino]

AFAIK it is first come first served, so the building, if it is under 49%, the next person coming along and buying a unit can still be part of the foreign quota.

In Pattaya and tourist destinations, the developer off plan does indeed segregate the prices and quotas for foreign and local. Due to the demand for many of the foreign owned developers being unable to sell to Thais (through lack of demand, skill in marketing and taste mostly).

Once part of the foreign quota, a unit can always be sold to another foreigner who is also part of the foreign quota, as both are part of the 49%. If the quota is reached already, then the next local owner selling to a foreigner thereafter will be unable to sell to a foreigner with ownership in the foreign quota until/unless someone else sells from the foreign quota back to a local thus freeing up some percentage allowing that to occur.

[Senechal]

Thanks. That makes sense. I was trying to reconcile the fact that some units for sale seem to be "allocated" as foreign ownership. (Like many buildings in Pattaya will have two classes of units available for sale even when buying off-plan). And other buildings seem to just check the overall ratio at the time of sale.

So hypothetically speaking: if a Thai person buys a "Thai ownership" unit in a building that has "allocated" units for foreign purchase. And the foreign ownership is still well-under 49% .. say, 30%. And then the Thai owner wants to sell his condo to a foreigner -- can he? Or is his unit forever allocated under the Thai allocation somehow?

How would this be enforced? Is it written into the bylaws of the building? Or is the foreign allocation merely a "builder" concept, and once the unit is sold the only thing that matters is the overall ratio?

Edited October 31, 2014 by Senechal

[Delight]

Should you wish to purchase a condo in a new development –then you will simply ask (the developer) if space in the 49% is available. If ‘yes’ and you wish to proceed then a contract will be drawn up and both parties will duly sign. The contract will be in your name.

It would be unusual for a developer to pre –allocate certain apartments to the 49% allocation.

That would only serve to restrict his hand. It’s simply’ first come first served’.

At the time of transfer (at the land office ) an official letter from the Juristic Person Manager(JPM) will specify that the purchase is in fact within the 49% . When the transaction is complete you will receive a Condominium Title Deed bearing your name.

This procedure is much the same if you purchase a pre-owned condo .There of course will not be a contract involving the developer.

The pre –owned condo could be, at the time of purchase, be in foreign name , a Thai name or in a Thai company name. It does not matter. All that matters is that space is available in the 49% foreign space allocation.. The letter from the JPM is essential

You refer to risk. If both the developer and the JPM behave illegally then there is in some risk for you. The risk being that you do not get your condo. However the bigger risk is for both the developer and the JPM . They risk ending up in jail.

Pay your money at the land office.

[Senechal]

Got it. Thanks. It's the letter from the Juristic Person Manager that I hadn't heard about. That makes sense.

[bangkoklawyer24]

Nice explanation from the real estate dealer's marketing handbook. Unfortunately the reality is different. There is no such letter of the JP. They have neither knowledge nor control whether all the Thai are selling their units to foreigner over night. Therefore, there is never a covenant in the condo purchase agreement that the unit can be registered by the foreigner. In many cases the risk is very remote, under other circumstances the risk is substantial.

[Senechal]

Nice explanation from the real estate dealer's marketing handbook. Unfortunately the reality is different. There is no such letter of the JP. They have neither knowledge nor control whether all the Thai are selling their units to foreigner over night. Therefore, there is never a covenant in the condo purchase agreement that the unit can be registered by the foreigner. In many cases the risk is very remote, under other circumstances the risk is substantial.

Wow. First I've heard of this. So even during a purchase it's conceivable that the ratio could shift under your feet and leave you with a condo that you can't legally own?

So if what you're saying is correct then the moral of the story is: Think twice before buying in a building where the ratio is anywhere close to 49:51. You might complete the transaction only to find out that you don't legally own it.

[KittenKong]

Nice explanation from the real estate dealer's marketing handbook. Unfortunately the reality is different. There is no such letter of the JP. They have neither knowledge nor control whether all the Thai are selling their units to foreigner over night.

Have you ever heard of debt-free certificates, without which one cannot transfer ownership of a condo? These are issued by the building (unless they are forged).

[dean008]

Thats what I was also led to believe by my JP

Nice explanation from the real estate dealer's marketing handbook. Unfortunately the reality is different. There is no such letter of the JP. They have neither knowledge nor control whether all the Thai are selling their units to foreigner over night.

Have you ever heard of debt-free certificates, without which one cannot transfer ownership of a condo? These are issued by the building (unless they are forged).

[technologybytes]

There are two separate quotas, the percentage of units and the percentage of the building by volume. Of course the latter is necessary in order to prevent a developer from making a load of small units and selling them as thai quota.

The percentage of units quota is maximum of 49% foreigner, the volume quota is currently 40% but of course usually more than 5% of a building is communal areas so it may be more theoretical than practical limit.

Of course, a unit becomes foreigner allocation ONLY when the chanote is registered to a foreigner. If it's registered to a Thai then it's Thai allocation.

At the time of transfer the chanote can transfer from Thai to Foreigner ONLY if such a transfer does not exceed the maximum allowed allocation.

Remember it's a Maximum allocation, so it's possible to be 100% Thai allocation.

Also, remember the Thailand Condominium Act was NOT passed to allow foreigners to own property, it was passed to assist Thai developers to sell condos!

Edited November 3, 2014 by technologybytes

[innerspace]

You sure? Never heard of % by units before, only total sqm.

Also note that if a Thai buys or inherits a foreign name unit that unit becomes thai owned. Which leaves the door open for an equal sized Thai owned unit to transfer to a foreigner, upon verification of quota availability at the land office.

[KittenKong]

You sure? Never heard of % by units before, only total sqm.

Me neither.

[Delight]

I am a bit confused about your statement:

‘There are two separate quotas, the percentage of units and the percentage of the building by volume. Of course the latter is necessary in order to prevent a developer from making a load of small units and selling them as thai quota.

The percentage of units quota is maximum of 49% foreigner, the volume quota is currently 40% but of course usually more than 5% of a building is communal areas so it may be more theoretical than practical limit.’

Section 14 of the condo act refers to ownership of common property and section 19 defines foreign ownership expressed as a percentage of total ownership.

The act states:

SECTION 14. The ownership ratio in common property of co-owners shall be according to the ratio between the space of each housing unit and the total

space of all the housing units at the time of the private, commonly-owned housing registration pursuant to Section 6.

And

SECTION 19 bis Alien or juristic persons stated in Section 19 may have ownership in a condominium unit, when added together, must not exceed forty-

nine percent of the total space of all units in that condominium at the time of applying for the condominium to be registered under Section 6."

Perhaps you could detail your source in relation to your statement:

The percentage of units quota is maximum of 49% foreigner

[Delight]

Nice explanation from the real estate dealer's marketing handbook. Unfortunately the reality is different. There is no such letter of the JP. They have neither knowledge nor control whether all the Thai are selling their units to foreigner over night. Therefore, there is never a covenant in the condo purchase agreement that the unit can be registered by the foreigner. In many cases the risk is very remote, under other circumstances the risk is substantial.

A condo co-owner ,distressed that his building had breached the 49% foreign ownership quota, sought advice from the ‘Ask the Lawyer ‘ forum .

The lawyer replied:

‘When buying a condo, the Land Office requires a letter from the manager of the building stating the ratio of foreign owners to Thai owners. If this sale puts the ratio over 49% then the official at the Land Office will reject the sale. This has obviously been circumvented in the past.’

So according to this lawyer a letter from the JPM is required

.

Edited November 10, 2014 by Delight

[bangkoklawyer24]

Nice explanation from the real estate dealer's marketing handbook. Unfortunately the reality is different. There is no such letter of the JP. They have neither knowledge nor control whether all the Thai are selling their units to foreigner over night. Therefore, there is never a covenant in the condo purchase agreement that the unit can be registered by the foreigner. In many cases the risk is very remote, under other circumstances the risk is substantial.

A condo co-owner ,distressed that his building had breached the 49% foreign ownership quota, sought advice from the ‘Ask the Lawyer ‘ forum .

The lawyer replied:

‘When buying a condo, the Land Office requires a letter from the manager of the building stating the ratio of foreign owners to Thai owners. If this sale puts the ratio over 49% then the official at the Land Office will reject the sale. This has obviously been circumvented in the past.’

So according to this lawyer a letter from the JPM is required

.

No one knows the foreign quota better than the land office. As this case shows, a letter and a little bit cash can bend the law in Pattaya.

[KittenKong]

A condo co-owner ,distressed that his building had breached the 49% foreign ownership quota, sought advice from the Ask the Lawyer forum .

The lawyer replied:

When buying a condo, the Land Office requires a letter from the manager of the building stating the ratio of foreign owners to Thai owners. If this sale puts the ratio over 49% then the official at the Land Office will reject the sale. This has obviously been circumvented in the past.

So according to this lawyer a letter from the JPM is required

.

No one knows the foreign quota better than the land office. As this case shows, a letter and a little bit cash can bend the law in Pattaya.

If the LO knows the quota as you say, why do they want the confirmation letter from the building in the first place?

And how can the building issue such a letter if, as you claim, "There is no such letter of the JP. They have neither knowledge nor control whether all the Thai are selling their units to foreigner over night."?

You seem to change your mind a lot.

[bangkoklawyer24]

If the LO knows the quota as you say, why do they want the confirmation letter from the building in the first place?

And how can the building issue such a letter if, as you claim, "There is no such letter of the JP. They have neither knowledge nor control whether all the Thai are selling their units to foreigner over night."?

You seem to change your mind a lot.

I am not the Ask-the-Lawyer! No change at all on my side.

[KittenKong]

No change at all on my side.

You said two things that appear to be entirely contradictory:

1) "There is no such letter of the JP. They have neither knowledge nor control whether all the Thai are selling their units to foreigner over night."

2) "As this case shows, a letter and a little bit cash can bend the law in Pattaya"

So is there a letter or isn't there? And if there is one, does the LO require it or not? And if they don't require one because they already know the quota in the building, how could writing such a letter make any difference to the quota?

And if they already know the quota in the building, how could anyone in the building forge documents to allow farang sales above the quota?

Whilst we are at it, how about the debt-free letter from the building? Is that a requirement or not?

[bangkoklawyer24]

Cool down, K.Kong. There is no letter requirement and it is not possible to exceed the quota - outside of Pattaya. But in P-town you can bend the law by such a letter and an envelope. This gives the land officer the motivation to ignore the law. Clear enough?

[KittenKong]

Cool down, K.Kong. There is no letter requirement and it is not possible to exceed the quota - outside of Pattaya. But in P-town you can bend the law by such a letter and an envelope. This gives the land officer the motivation to ignore the law. Clear enough?

Makes zero sense to me. If it's just a bribe, what's the letter for?

And I'm not even warm.

[SheungWan]

Cool down, K.Kong. There is no letter requirement and it is not possible to exceed the quota - outside of Pattaya. But in P-town you can bend the law by such a letter and an envelope. This gives the land officer the motivation to ignore the law. Clear enough?

I have been told by one person that the quota in Pattaya is now being enforced and that foreign owners of apartments in older apartment blocks where the quota has been clearly exceeded cannot now effect a foreign owner transfer. Any corroboration of this?

[KittenKong]

I have been told by one person that the quota in Pattaya is now being enforced and that foreign owners of apartments in older apartment blocks where the quota has been clearly exceeded cannot now effect a foreign owner transfer. Any corroboration of this?

How about this?

http://www.thaivisa.com/forum/topic/774461-49-foreign-ownership/

[SheungWan]

I have been told by one person that the quota in Pattaya is now being enforced and that foreign owners of apartments in older apartment blocks where the quota has been clearly exceeded cannot now effect a foreign owner transfer. Any corroboration of this?

How about this?

http://www.thaivisa.com/forum/topic/774461-49-foreign-ownership/

Yes, exactly that. However my contact also informs me that the window for envelopes being used to effect a transfer is now closed and that foreign ownership re transfers in such buildings eg Center Condo, Yensebai and others are now screwed.

[rayongchelsea]

Cool down, K.Kong. There is no letter requirement and it is not possible to exceed the quota - outside of Pattaya. But in P-town you can bend the law by such a letter and an envelope. This gives the land officer the motivation to ignore the law. Clear enough?

Yes there is. As chairman for the condo committee I sign them with the the juristic person. It is a control over who is buying and selling and where commissions are going.

There is no motivation for the land office to ignore the law , they will accept the letter. It is the juristic office that is negligent in their duty as they know the quota and the rules.

The land office is just an administrative centre it doesn't enforce rules etc..

There is also a letter of debt, no condo will be transferred without this letter..

K.k is correct.

Of course the quotas have been changed at one time it was allowed 100% foreign quota..

Why is Pattaya different?

[Langsuan Man]

There are some, although rare. exceptions to this 49% / 51% ratio. One of which was that during the 1987 financial crisis for about a year there was no farang quota at all, since the government was desperate for foreign currency inflows. To encourage foreigners to bring cash into the country there was an emergency decree (or a temporary change to the Condominium Act) that allowed the quota to be exceeded.

One condo that this specifically impacted was Center Condo on Pattaya Tai, next to the Wat. As far as I know, this is the only condo in Pattaya where the farangs make up a majority of owners. The Committee elected by the owners there has been successful in getting many things done, that they would not have been able to do, if Thais were in a majority position. Thais are generally loathe to approve any upgrades or necessary spending to enhance or increase the properties values in condos

This also means that in the case of Center Condo the Land Office in Pattaya has a list of exactly which properties can be registered in a farang name. When you go to the Land Office the only document that you bring to the land office is a letter from the Center Condo management stating that there are no arrears for utilities or common fees so the condo may be registered and chanote issued. The Juristic Person has nothing to do with certifying the farang Thai ratio at Center Condo, it is all managed by the Pattaya Land Office based upon their records

[KittenKong]

Of course the quotas have been changed at one time it was allowed 100% foreign quota..

A minor technical point of no real importance, but I understood that the quota was increased from 49/51 to 70/30 during the last crash, but that was as high as it ever got.

[rayongchelsea]

There are some, although rare. exceptions to this 49% / 51% ratio. One of which was that during the 1987 financial crisis for about a year there was no farang quota at all, since the government was desperate for foreign currency inflows. To encourage foreigners to bring cash into the country there was an emergency decree (or a temporary change to the Condominium Act) that allowed the quota to be exceeded.

One condo that this specifically impacted was Center Condo on Pattaya Tai, next to the Wat. As far as I know, this is the only condo in Pattaya where the farangs make up a majority of owners. The Committee elected by the owners there has been successful in getting many things done, that they would not have been able to do, if Thais were in a majority position. Thais are generally loathe to approve any upgrades or necessary spending to enhance or increase the properties values in condos

This also means that in the case of Center Condo the Land Office in Pattaya has a list of exactly which properties can be registered in a farang name. When you go to the Land Office the only document that you bring to the land office is a letter from the Center Condo management stating that there are no arrears for utilities or common fees so the condo may be registered and chanote issued. The Juristic Person has nothing to do with certifying the farang Thai ratio at Center Condo, it is all managed by the Pattaya Land Office based upon their records

Thanks for that. That is very interesting.

You point out one of the great weaknesses in this whole ownership of condos, a thai run committee can be very apathetic and loathe to spend, make sure there are foreigners on the committee and not just a token one or two so there is accountability and that the thai owners are not in any relationship with the developer if it's a new build.

[hhgz]

"... a thai run committee can be very apathetic and loathe to spend, make sure there are foreigners on the committee..."

You're absolutely correct: all Thais are apathetic, and all farangs have initiative. Thanks for clearing that up for us. I'm glad that I don't live in your neighborhood. During the decade that I owned a condo, I found that the Thai condo committee performed its job faithfully, and dealt quickly with owners who did not pay their fees. Too, those lazy, pathetic, and poor Thai owners had the same concerns about the building as I did.

[KittenKong]

You point out one of the great weaknesses in this whole ownership of condos, a thai run committee can be very apathetic and loathe to spend, make sure there are foreigners on the committee and not just a token one or two so there is accountability and that the thai owners are not in any relationship with the developer if it's a new build.

I think it's more the Thai owners who are loathe to spend rather than the Thai committee members. Though in fact in my building Thai co-owners rarely stand for election to the committee, and few Thai co-owners go to the AGM. But when they do go they often vote against expenditure.

One thing I would say about Thai committees is that they tend to be "nicer" about enforcing rules than a farang committee would be, and this can lead to the rules simply being ignored. Farang committees I have seen worry less about upsetting/denouncing/punishing those who wont obey the rules, and unsurprisingly as a farang I agree with that tactic.

As for nepotism and corruption, in my building one of the worst offenders was a farang committee member who provided services from his company to the building at vastly inflated prices. My motto would be: never elect anyone to the committee who is actively involved in running a business here or who has family members or friends who run businesses here. Vote for the retired people who dont need to work.

[rayongchelsea]

"... a thai run committee can be very apathetic and loathe to spend, make sure there are foreigners on the committee..."

You're absolutely correct: all Thais are apathetic, and all farangs have initiative. Thanks for clearing that up for us. I'm glad that I don't live in your neighborhood. During the decade that I owned a condo, I found that the Thai condo committee performed its job faithfully, and dealt quickly with owners who did not pay their fees. Too, those lazy, pathetic, and poor Thai owners had the same concerns about the building as I did.

Ok point taken, another defensive foreigner , more thai than thai..

My neighbour is very nice and I have great thai neighbours, great thai members on the committee and I am in court with the developer as a foreigner because the Thais are too apprehensive/scared on their own.i care greatly for my thai co- owners. I have been bullied, intimidated, racially abused etc...to defend my Thai co- owners who who been very generous in supporting the legal fund.

I should have re_qualified that by saying that it is better to have a mix and the apathetic may have been too strong.

None of my thai neighbours are poor.

I wasn't referring to cam fees, but more about repairs, especially upgrades..

But it is a fact that thai committees in my experience can be loathe to spend on repairs etc..they are more conservative and yes foreigners can be a positive experience as many are retired actually live in the condo instead of just visiting periodically, and are more attached to their investment.

Your post was way out of order..you aren't even in my league when it comes to helping thai co- owners or even knowing Thais.

You didn't mention you were on the committee of your condo..you know very little then...just one condo then!

Stop using every excuse to think its all thai bashing.