Owning Condos

[loppylugs1]

Interesting article in (deleted) today under the headline "cannot sell my condo in Jontiem to a friend."

Quoting the source the quota is now up to 53% and irrespective of anything else it is the dates 1999 to 2004 that matter when purchase took place. Anything over the quotas will be terminated,starting with the latest working backwards until the required quota is reached,or setting a company up or selling to a Thai which would considerably reduce its worth.

Ill PM anyone interested with the source if required Thought it was April the first when reading it

[KittenKong]

Probably this:

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

[loppylugs1]

Probably this:

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

Probably ,but it was not picked up on with any great detail, with potential confiscations and whatever Seems the Thai authorities are getting more than serious.

How do the developers around Pattaya flog their wares now,seems they are all 100% farang

[ThaiBob]

I believe units at vt1 and VT2 are also above the 49% foreign threshold because of the 1999-2004 exemption for Bangkok and Pattaya condo projects. It was always my understanding these units were grandfathered and could be resold to a foreigner. It would be interesting to know if that is the case and if that is the situation at Chateau Dale.

[Anthony5]

I believe units at vt1 and VT2 are also above the 49% foreign threshold because of the 1999-2004 exemption for Bangkok and Pattaya condo projects. It was always my understanding these units were grandfathered and could be resold to a foreigner. It would be interesting to know if that is the case and if that is the situation at Chateau Dale.

I thought the 1999-2004 exemption had many restrictions with which VT never would be able to comply, like the land maximum 1 Rai and not more than 7 storeys.

Anyway, the person the original article, who has the penthouse at Chateau Dale, has probably the correct papers if it is in his name. Because someone went bent at the LD, isn't his problem in my opinion.After all there are another 52,99% of owners in that building who are in the same position

[DD13]

Setting up a "Thai" company (as with land ownership) is the way

Edited December 1, 2014 by DD13

[KittenKong]

The "article" mentioned by the OP is in fact a forum post and not a newspaper article. It does give some extra info that wasn't given in the ask-the-lawyer question that I provided the link for.

I think the important question here is whether or not the sale(s) that put the building over-quota originally were as a result of legal relaxation of the quota or some sort of error or fraud on the part of the building JP.

Either way, it does seem very unfair to penalise someone who may have purchased in good faith.

[KittenKong]

Setting up a company (as with land ownership) is the way

Not really, as company-owned units are invariably worth less than farang-owned ones (at least in buildings that are popular with farangs).

And of course the company ownership is probably illegal in itself.

[jbaldwin]

I believe units at vt1 and VT2 are also above the 49% foreign threshold because of the 1999-2004 exemption for Bangkok and Pattaya condo projects. It was always my understanding these units were grandfathered and could be resold to a foreigner. It would be interesting to know if that is the case and if that is the situation at Chateau Dale.

Yes. This is the situation at Chateau Dale. The Condo has been over 49% since the exemption ended in 2004. Previously foreigner to foreigner transfers were permitted by the Land Office but this stopped without any warning earlier this year.

[rayongchelsea]

Setting up a "Thai" company (as with land ownership) is the way

The worst possible way!

[john1000]

rayongchelsea, on 01 Dec 2014 - 16:14, said:

DD13, on 01 Dec 2014 - 15:36, said:

Setting up a "Thai" company (as with land ownership) is the way

The worst possible way!

Agree.

How long before a closer look at companies, solely created to own property as so called assets of a company, are put under the microscope.

Farang may not lose their home but hefty fines would be a good income stream for the government, given the number of places owned in this way.

[gk10002000]

so is this topic implying that some condos won't let you sell your unit because there are clauses in the original purchase agreement that say something like you can't sell to foreigners if certain percentages are not met? Another very useful piece of information. Thanks

[ThaiBob]

I believe units at vt1 and VT2 are also above the 49% foreign threshold because of the 1999-2004 exemption for Bangkok and Pattaya condo projects. It was always my understanding these units were grandfathered and could be resold to a foreigner. It would be interesting to know if that is the case and if that is the situation at Chateau Dale.

Yes. This is the situation at Chateau Dale. The Condo has been over 49% since the exemption ended in 2004. Previously foreigner to foreigner transfers were permitted by the Land Office but this stopped without any warning earlier this year.

Hopefully, this is some kind of clerical or bureaucratic error that will get sorted out and is not official Land Office policy. As others have mentioned a farang unit has greater value and I personally would not use a Thai-company structure. Edited December 2, 2014 by ThaiBob

[loppylugs1]

so is this topic implying that some condos won't let you sell your unit because there are clauses in the original purchase agreement that say something like you can't sell to foreigners if certain percentages are not met? Another very useful piece of information. Thanks

Was not a clause in the contract,just a blanket refusal to allow foreigner to foreigner sales,and not part of the quota system either

[chris2004]

Setting up a "Thai" company (as with land ownership) is the way

Anyone who buys a condo through a thai company needs their head examined.

[petercool]

A post with a link to an unapproved site was removed

[loppylugs1]

I believe units at vt1 and VT2 are also above the 49% foreign threshold because of the 1999-2004 exemption for Bangkok and Pattaya condo projects. It was always my understanding these units were grandfathered and could be resold to a foreigner. It would be interesting to know if that is the case and if that is the situation at Chateau Dale.

Yes. This is the situation at Chateau Dale. The Condo has been over 49% since the exemption ended in 2004. Previously foreigner to foreigner transfers were permitted by the Land Office but this stopped without any warning earlier this year.

Hopefully, this is some kind of clerical or bureaucratic error that will get sorted out and is not official Land Office policy. As others have mentioned a farang unit has greater value and I personally would not use a Thai-company structure.

Thought the link would be removed,if there is much interest in this thread I will type it out word for word. For sure no clerical error,just another tightening of whatever,could,would possibly lead to something else

[petercool]

^^ Unfortunately ThaiVisa is not authorised to quote from that link so maybe a synopsis of the key salient points from their article could suffice but not word for word please as we could all be in trouble .....

[Pattaya46]

I thought the 1999-2004 exemption had many restrictions with which VT never would be able to comply,

like the land maximum 1 Rai and not more than 7 storeys.

Hi. I don't think their is such restrictions. By example Center Condo is a 16 storeys building and has a 90% foreign threshold (I think), because of the rules when it was built.

I don't think there has been any change for such condo units. They always were grandfathered for the foreign unit and - seeing that there is frequently resales in this condo - I would know if any buyer or seller got this problem.

[Anthony5]

I thought the 1999-2004 exemption had many restrictions with which VT never would be able to comply,

like the land maximum 1 Rai and not more than 7 storeys.

Hi. I don't think their is such restrictions. By example Center Condo is a 16 storeys building and has a 90% foreign threshold (I think), because of the rules when it was built.

I don't think there has been any change for such condo units. They always were grandfathered for the foreign unit and - seeing that there is frequently resales in this condo - I would know if any buyer or seller got this problem.

http://www.bangkokcondo.com/condo_laws.htm

ACQUISITION OF CONDOMINIUM UNIT BY ALIEN

Previously, an alien could have ownership in a condominium unit or bought a condominium unit in each condominium in a proportion not higher than forty percent of the total space of all units in that condominium at the time the application for condominium registration had been lodging. Later, on April 28th, 1999, the Condominium Act was amended to facilitate an alien in the purchase of condominium unit. As such, an alien may have ownership in a condominium unit in a proportion not higher than forty nine percent of the total space of all units in that condominium at the time the application for condominium registration is being lodged. The amended Act also provides that an alien may have ownership in a condominium unit exceeding forty nine percent if the following rules are satisfied:

1. 1. Such condominium shall be situated in Bangkok Metropolis, municipality area or other local administrative area i.e. the Pattaya City;

   2. The total area of the land on which a condominium is situated, when combined with the land provided for common use or benefit of all co-owners, shall not exceed five rai;

   3. Such condominium shall accommodate not less than forty condominium units;

   4. Such condominium shall be registered not less than one year prior to the date an alien applies for ownership in the condominium unit;

   5. Such condominium shall not be situated in the area of military safety zone under the law on Military Safety Zone;

   6. An alien shall utilize a condominium unit in a way that is not contrary to the local custom or good living of the local community;

However, in a five year term as from April 28th,1999, the rules concerning the acquisition of ownership by an alien in a condominium unit in a higher proportion than forty nine percent shall take effect. After that it shall be repealed, and the alien obtaining an ownership in this regard and the alien receiving an ownership in a condominium unit transferred by the former are allowed to continue holding the ownership in that condominium unit even in a higher proportion than forty nine percent.

http://www.joneslanglasallesites.com/investmentguide/country/thailand/restrictionsonforeignpropertyownership

Prior to April 2004, foreigners could purchase up to 100% of a condominium project, provided it was located in Bangkok Metropolis, municipality area or other administrative area and the site area was less than five rai (two acres) as stipulated in the Condominium Act (No. 3), B.E. 2542. This law was in effect between 1999–2004 and is still valid for condominiums purchased during that period.

[fosseway]

I remember commenting on the 49/51% rule in a previous post, and stating that our condo J.P will not allow the transfer of Thai owned condo's to be transferred into a company name with a foreigner as the director, without the foreigner providing proof that the company is compliant with the rule affecting foreign ownership rights, that is to say the 51% of the Thai company has to be made up of a genuine Thai investors, that have actually paid for the shares with their own funds, with their Thai name on the share certificate, not the usual "grey area" deal where the lawyer and staff just sign blank share certificates and these are held by the foreigner until he wishes to sell or transfer.

I was lambasted and mocked for stating this was our J.P ruling on this, even someone commenting that if the J.P. did this to him, he would have him in court faster than xxx Actually I would not hold out much hope of winning that case, as it would be asking the judge to support an illegal act.

[Anthony5]

I remember commenting on the 49/51% rule in a previous post, and stating that our condo J.P will not allow the transfer of Thai owned condo's to be transferred into a company name with a foreigner as the director, without the foreigner providing proof that the company is compliant with the rule affecting foreign ownership rights, that is to say the 51% of the Thai company has to be made up of a genuine Thai investors, that have actually paid for the shares with their own funds, with their Thai name on the share certificate, not the usual "grey area" deal where the lawyer and staff just sign blank share certificates and these are held by the foreigner until he wishes to sell or transfer.

I was lambasted and mocked for stating this was our J.P ruling on this, even someone commenting that if the J.P. did this to him, he would have him in court faster than xxx Actually I would not hold out much hope of winning that case, as it would be asking the judge to support an illegal act.

Ah, our JP with an agenda woke up again.

[fosseway]

No agenda Anthony5, just stating it as it is, and by the way, I am not the J.P.

[KittenKong]

I remember commenting on the 49/51% rule in a previous post, and stating that our condo J.P will not allow the transfer of Thai owned condo's to be transferred into a company name with a foreigner as the director, without the foreigner providing proof that the company is compliant with the rule affecting foreign ownership rights, that is to say the 51% of the Thai company has to be made up of a genuine Thai investors, that have actually paid for the shares with their own funds, with their Thai name on the share certificate, not the usual "grey area" deal where the lawyer and staff just sign blank share certificates and these are held by the foreigner until he wishes to sell or transfer.

It seems to me that the JP's business begins and ends with ensuring that his declarations about quotas and debts are correct. I dont see how it can be any of his business how the company buying the unit is structured, nor is he in any way competent to determine this.

As far as the JP is concerned there are only two sorts of buyers: foreign and non-foreign (which covers both Thai and company). All the rest is for the Land Office to decide on.

[yankee99]

I remember commenting on the 49/51% rule in a previous post, and stating that our condo J.P will not allow the transfer of Thai owned condo's to be transferred into a company name with a foreigner as the director, without the foreigner providing proof that the company is compliant with the rule affecting foreign ownership rights, that is to say the 51% of the Thai company has to be made up of a genuine Thai investors, that have actually paid for the shares with their own funds, with their Thai name on the share certificate, not the usual "grey area" deal where the lawyer and staff just sign blank share certificates and these are held by the foreigner until he wishes to sell or transfer.

I was lambasted and mocked for stating this was our J.P ruling on this, even someone commenting that if the J.P. did this to him, he would have him in court faster than xxx Actually I would not hold out much hope of winning that case, as it would be asking the judge to support an illegal act.

If you think this would be an obstacle its not. Companies are almost always set up 100% thai then its 49% transfered to the foriegner.

[yankee99]

Setting up a "Thai" company (as with land ownership) is the way

Anyone who buys a condo through a thai company needs their head examined.

Company condo ownership is not the same as company land ownership.

[Anthony5]

Setting up a "Thai" company (as with land ownership) is the way

Anyone who buys a condo through a thai company needs their head examined.

Company condo ownership is not the same as company land ownership.

Yes it is, it is the same illegal circumvention of the law which say that the particular property can only be owned by a Thai individual, or a Thai company that isn't set up solely to own property.

[ThaiBob]

After reading Anthony5's links in an earlier post I would like to see how some Land Office bureaucrat talks his way out of not permitting a foreigner to foreigner transfer. The assumption being there has not been a change in the Condominium Act that we don't know about. Another factor is the Thai military junta might be playing games with the law behind the scenes. They were trying to make changes to the Foreign Business Act but had to back off because of the outcry fromm foreign business owners and their governments.

[rayongchelsea]

Setting up a "Thai" company (as with land ownership) is the way

Anyone who buys a condo through a thai company needs their head examined.

Company condo ownership is not the same as company land ownership.

Yes it is, it is the same illegal circumvention of the law which say that the particular property can only be owned by a Thai individual, or a Thai company that isn't set up solely to own property.

Agreed, and where is the re- sale market for a condo owned in a thai company, on top of CAM fees, you have audit fees, accounting fees etc..an expensive and unnecessary proposition.