Today's SMH (26 Nov) - Eviction threat for Australians who put life savings into Thai dream homes

[pgs]

Direct copy/paste without the pics from the SMH:

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Eviction threat for Australians who put life savings into Thai dream homes November 26, 2014 - 2:44PM Date: - Lindsay Murdoch Phuket: Daryl Davies knew when he saw the luxurious homes set amid eight tropical acres with stunning sea views that this is where he wanted to spend his retirement years.

"They are absolutely delightful," says 70-year-old Mr Davies from Melbourne, referring to a $30 million development on the pristine west coast of the Thai resort island of Phuket.

Mr Davies, a retired commercial pilot, paid the equivalent of about $500,000 in Thai baht for his dream three-bedroom home in Chom Tawan, one of the most prestigious residential developments on Phuket.

But a Thai court has authorised an auction of the homes of Mr Davies and more than 40 other buyers to the highest bidder if millions of dollars owed to the Industrial Commercial Bank of China (ICBC) by the project developer are not repaid by a December 17 deadline.

Read more -- http://www.smh.com.au/world/eviction-threat-for-australians-who-put-life-savings-into-thai-dream-homes-20141126-11u7a1.html

Edited November 26, 2014 by Crossy
Edited for Fair Use, link to original article added.

[advancebooking]

Its disturbing to read this and yet another reason why its better to rent in the LOS. Thailand is played on tricks. Best of luck to the farang involved in this.

[MrWorldwide]

Right - so they cant get the money from the scumbag developer and the next best option is to go after homeowners ? I'd like to see where it's written in their contract of sale that they will be liable for debts incurred by the developer, but I'm sure the boards legal experts will enlighten us in the fullness of time.

[krisb]

Smart enough to fly commercial planes, but dumb enough to invest half a mil in land he don't own.

Must have been a great sales pitch to get him in the silly sausage.

[kannot]

Smart enough to fly commercial planes, but dumb enough to invest half a mil in land he don't own.

Must have been a great sales pitch to get him in the silly sausage.

yeah he needs |JERRY to talk his twaddle about this.

[krisb]

Smart enough to fly commercial planes, but dumb enough to invest half a mil in land he don't own.

Must have been a great sales pitch to get him in the silly sausage.

yeah he needs |JERRY to talk his twaddle about this.

Bet he was an Air Asia pilot!

[DP25]

Its disturbing to read this and yet another reason why its better to rent in the LOS. Thailand is played on tricks. Best of luck to the farang involved in this.

The developers who haven't paid the debt they owe are farang too

Andrew Street, the British developer behind Napawan Asia, admits the company was "over-extended commercially at the commencement of the global financial crisis"

[shirtless]

This country really does not rate as an investment . Too many Cons and not enough Pros.

[steelepulse]

Buying off plan and relying on promises is a tough way to lose a significant investment. The developer sounds like he purposely misrepresented several important facts and took off before the doodoo hit the fan, so he's got his 1 million pound estate in the UK, with no plans to return and face the music.

>>Mr Street, who bought a $1 million house in the English Midlands in August 2013 after leaving Phuket

>>It is not in the interest of all parties concerned for me to return to Thailand whilst in the final steps of the debt workout.

[12DrinkMore]

Its disturbing to read this and yet another reason why its better to rent in the LOS. Thailand is played on tricks. Best of luck to the farang involved in this.

The developers who haven't paid the debt they owe are farang too

Andrew Street, the British developer behind Napawan Asia, admits the company was "over-extended commercially at the commencement of the global financial crisis"

This Andy Street?

https://www.linkedin.com/pub/andy-street/51/a51/816

Claims ownership of Tawan Properties.

http://www.tawanproperties.com/

Anybody looking to buy there?

Caveat emptor

[stevenl]

Buying off plan and relying on promises is a tough way to lose a significant investment. The developer sounds like he purposely misrepresented several important facts and took off before the doodoo hit the fan, so he's got his 1 million pound estate in the UK, with no plans to return and face the music.

>>Mr Street, who bought a $1 million house in the English Midlands in August 2013 after leaving Phuket

>>It is not in the interest of all parties concerned for me to return to Thailand whilst in the final steps of the debt workout.

Especially one party that would rather stay in the UK comes to mind.

[stevenl]

Its disturbing to read this and yet another reason why its better to rent in the LOS. Thailand is played on tricks. Best of luck to the farang involved in this.

The developers who haven't paid the debt they owe are farang too

Andrew Street, the British developer behind Napawan Asia, admits the company was "over-extended commercially at the commencement of the global financial crisis"

This Andy Street?

2577dad.jpg

https://www.linkedin.com/pub/andy-street/51/a51/816

Claims ownership of Tawan Properties.

http://www.tawanproperties.com/

Anybody looking to buy there?

Caveat emptor

Their section 'hot news' on the website is being updated at the moment. Must be to include the 17 December deadline

[arunsakda]

Never invest more than one can afford to lose in the LOScams, I always say .

[Robert24]

well to be fair everyone knows if you put money down om a new development (be it Condo or House) that has not been built yet and only become owner upon completion, that you take the credit counterparty risk. Ie should the developper go bankrupt, you may loose part or all of your downpayment.

nothing special about this. This is the reason why

1) better buy something that has been completed and that you take full ownership upon payment or

2) only pay money down on reputable property developers, ie public traded companies etc. For example Land & Houses, Property perfect, Sansiri etc.

[NamKangMan]

Never invest more than one can afford to lose in the LOScams, I always say .

Why give the "LOScams" one baht of your money, "I aways say."

[manarak]

"believed they had covered all the bases"

'nuff said.

another case of gullible "buyers"

[hansgruber]

Tawan was a bunch of English guys from Hong Kong. Many bad stories have emerged about them. Even their boat charter business had really dubious activities.

Best stay clear of them.

[KittenKong]

If you want to buy property in Thailand, buy something you can legally own outright: a condo. Otherwise rent.

Anything else could easily come back and bite you in the bum one day, as indeed it may be doing to the misguided people who put money into this development.

I do feel sorry for them but they only have themselves to blame for buying something they cant legally own.

[Robert24]

@kittenkong: if I understand this case correct than this has nothing to do that a foreigner cannot own land. It appears that the developer went bankrupt and obviously all downpayments made and any loans from the bank and others to this developer are now at risk of being lost. This can happen with a downpayment on a condo developer as well. And not only in Thailand but in any country.

I don't feel sorry for them. Everyone knows when you make a downpayment on such a development that there is a credit risk of the developer until you can take over legal ownership of your property.

Also one had to ask why you make a downpayment of 14M baht. I mean I don't know the type of property and how many percent of the final purchase price that would have been, but it does sound like completely overpriced.

[StealthEnergiser]

@kittenkong: if I understand this case correct than this has nothing to do that a foreigner cannot own land. It appears that the developer went bankrupt and obviously all downpayments made and any loans from the bank and others to this developer are now at risk of being lost. This can happen with a downpayment on a condo developer as well. And not only in Thailand but in any country.

I don't feel sorry for them. Everyone knows when you make a downpayment on such a development that there is a credit risk of the developer until you can take over legal ownership of your property.

Also one had to ask why you make a downpayment of 14M baht. I mean I don't know the type of property and how many percent of the final purchase price that would have been, but it does sound like completely overpriced.

I would have thought there would have been insurance for this .

[arunsakda]

If you can afford to lose it who cares. Some people spend $500K on a car. It is not my business what people do with their money

but I do feel sorry of those who fall for the illusion. Unless the retired pilot ever crossed a picket line. Then it's "Som nam naa" !

[LivinginKata]

Quote from original news article ...

Mr Davies and other buyers, including five Australian families, believed they were covering all bases before paying for what were promised to be effectively 90-year leasehold titles for the homes, including hiring lawyers to do due diligence on the property.

So, can these lawyers be sued for poor 'due diligence' ?

... although the promise of 90 year leasehold displays the complete lack of legal proficiency

[evenstevens]

the only guarantee of ones investment deposit etc etc,is a escrow account, to be made law here, in the land of the shonk

but a fat chance of that, ever happening

a very nice evening to all

[konying]

Right - so they cant get the money from the scumbag developer and the next best option is to go after homeowners ? I'd like to see where it's written in their contract of sale that they will be liable for debts incurred by the developer, but I'm sure the boards legal experts will enlighten us in the fullness of time.

Well not really . Developer owes bank money, bank owns the property so in reality nothing illegal or unethical on the banks behalf.

[robertthebruce]

Its disturbing to read this and yet another reason why its better to rent in the LOS. Thailand is played on tricks. Best of luck to the farang involved in this.

The developers who haven't paid the debt they owe are farang too

Andrew Street, the British developer behind Napawan Asia, admits the company was "over-extended commercially at the commencement of the global financial crisis"

This Andy Street?

2577dad.jpg

https://www.linkedin.com/pub/andy-street/51/a51/816

Claims ownership of Tawan Properties.

http://www.tawanproperties.com/

Anybody looking to buy there?

Caveat emptor

Gosh lucky escape,for me, I looked at that development. Four years ago, but because it was not complete I declined... Good Choice for,sure...

[Robert24]

to be honest it's not such an uncommon event that a property developer goes bankrupt before the development is finished. I've seen this happening in Europe, in the US and even in Japan. I'm sure it happens in Australia as well. And every time this happens you have people who loose money, be it private investors, banks or others.

Now with regards to due diligence from lawyers: They will make sure all the paperwork, contracts, lease etc is in order. And I assume that was fine. I don't think they will review the credit worthiness/financial stability of a property developer.

About insurance: I'm not aware that people can buy insurance against bankruptcy of a small property developer. Usually such insurance products are called Credit Default Swaps and are only available against major counterparties, such as countries and big corporates. And I assume you would have to buy insurance against a lot more than just AUD 500k.

The best thing to do is really to only buy what's been built already, you see what you get and when you pay the money, you take legal ownership of the property.

Also bear in mind that often there are disputes with regards to the quality or specs of a development. I've seen this many times as well, for example a property is not built according to the plans you have seen, or there are defects the developer hasn't fixed etc.

And in this case, I must come back again to sheer the amount this person paid down. I mean 14M Baht down payment is a huge sum and the contract was only for a 90 year lease too! I should not judge this person but common sense really tells you that this is completely overprized.

[stuarty]

@robertthebruce. Chom Tawan was complete 4 years ago.

[andreww]

is Maan Tawan affected as well?

Here's Tawan's sales pitch btw:

http://www.tawanproperties.com/download/pdf/Chom_Tawan_ebrochure.pdf

[MisterTee]

Tawan was a bunch of English guys from Hong Kong. Many bad stories have emerged about them. Even their boat charter business had really dubious activities.

Best stay clear of them.

Brits wouldn't do anything like this... there had to be Thais involved.

[KittenKong]

@kittenkong: if I understand this case correct than this has nothing to do that a foreigner cannot own land. It appears that the developer went bankrupt and obviously all downpayments made and any loans from the bank and others to this developer are now at risk of being lost. This can happen with a downpayment on a condo developer as well. And not only in Thailand but in any country.

Even here developers are supposed to have bank guarantees and insurance to cover this possibility. In the EU they certainly do and the solicitors/lawyers involved in such a purchase there would be responsible for assuring that everything was in order, and their own liability insurance should cover any error on their part.

Of course in Thailand it may well be that the insurance and guarantees were never obtained at all and the entire thing is just a scam. It certainly would not be the first time it has happened. All the more reason only to pay very small deposits, if any.

But I would not like to be in the position of trying to explain to a Thai court that I wanted compensation for money I had lost trying to buy a house and land that I cannot legally own. For an off-plan condo purchase I would feel much happier.