Dealing with condo owners who refuse to pay dues/levies

[konisaan]

I'm wondering if anyone has experience with this problem. My mother owns a small condo in a large building in Chiang Mai. Apparently there are numerous owners who haven't payed levies; sometimes for years. There seems to be apathy regarding this issue. The first thing that pops into the mind of most people is 'Take legal action' but the sentiment is that it takes forever and the chances of actually recovering the money are remote.

The worst thing is it can spread like a cancer as more and more people see deteriorating conditions and ask themselves "If other people aren't paying; why should I bother?" These non-payers are obviously parasites that take advantage of those owners that pay their dues. If legal action isn't viable, what are some options?

[Brit_Doggie]

This is why my fees will be increased because of non payers who only spend 1 or 2 months a year here as for legal action it a no no, as for dealing with such owners like making sure that on return the room is sealed against them entering until all dues are paid together with a high interest charge,again not possible so now what nothing if i not pay they turn my water and electrc off but these armpits get away scott free.

[KittenKong]

Actually the chances of recovering the money are extremely high, not least because it is impossible (without fraud) to sell a unit without a debt-free certificate from the JPM. Needless to say the JPM should only provide this if all debts are paid.

As far as recovering the debts before a sale go, in the first place you (by "you" I mean the committee and management) should be applying interest to the debt after the first few months in accordance with the building rules and regulations. This could be around 20% per year, compounded.

Then write to the owners who have not paid, indicating the amount of the debt, the interest and the overdue period. Warn them that if they dont pay you will cut off water services and forbid them access to common areas. Dont hesitate to do this if they dont pay as you are entirely within your rights. Watch out for electricity though if this is billed directly by the PEA: you dont have the right to cut it off.

Also it doesnt hurt to post a list of room numbers with outstanding debts in a prominent place so that all owners know exactly who the cheapskates people with bad memories are. Lost face can be a powerful tool.

If they still dont pay after that you can apply to the courts to have the units sold to pay the debts. And you should win without much trouble, assuming that you have followed the procedures of giving written warning etc. Your JPM should be able to provide or obtain legal advice.

Of course it isnt worth applying to the courts until the debts amount to a significant proportion of the value of the unit. But usually the threat will make most people pay up.

[ripley]

Listen to Kitten Kong and don't despair! If you can get your JPM and Building Management on the ball, money is recoverable. Just one warning: Make certain that the Owners are promptly advised when the overdue CAM fees are finally paid off and that this income is included in your annual audit.

One more note: Sometimes these overdue fees build up to an amount that the rogue owner cannot pay off right away and so s/he keeps defaulting. Deals can be made for scheduled payments on a large sum. I've heard that some condos have excused or "forgiven" interest payments just to get the initial CAM fees paid and in the bank - not fair, but something is better than nothing.

[KittenKong]

One more note: Sometimes these overdue fees build up to an amount that the rogue owner cannot pay off right away and so s/he keeps defaulting. Deals can be made for scheduled payments on a large sum. I've heard that some condos have excused or "forgiven" interest payments just to get the initial CAM fees paid and in the bank - not fair, but something is better than nothing.

I also can imagine that happening in some buildings, especially ones that have a big problem with unpaid fees.

Personally, as a committee member in a building with a good balance sheet, few things give me greater pleasure than pursuing the b*astards for every last satang they owe, including compound interest. If you cant afford to own a condo you should sell it.

[Suradit69]

Our building had a major problem with this. With a change to a more aggressive manager and committee, they recouped a major part of the money due. The few remaining delinquent units are mainly those that appear to be abandoned ... probably owner dead and no transfer of ownership ever made. I assume those units will remain in limbo if no will exists or heirs come forward.

At our last general meeting they said something about shutting off water, but I can't recall if that was just the (apparently) abandoned units or if the threat was used against others.

We actually used the recovered funds toward some planned maintenance work and consequently the assessment for such things was less this year than it would have been.

[Torrens54]

Wonder if we could get our Village to do something similar about a few, almost derelict houses?

Some have been taken over by BANKS that do NOTHING, so maybe we could get the Village Management to threaten the Banks.

But then again......"Thainess" probably comes into the question and No Body will want to "rock the boat."

[mikebell]

Our Juristic Entity took a high-ranking naval officer to court over maintenance fees. It took four years but we were awarded all back fees + interest + some legal costs. He was given just 10 months to repay the lot. He tried to wriggle the year after but has eventually paid in full.

[gjoo888]

I live in a gated community where you need a keycard to enter and exit by car. If you don't pay your fees or dues, you don't get a keycard. Problem solved, unless you don't have a car.

[giddyup]

I live in a gated community where you need a keycard to enter and exit by car. If you don't pay your fees or dues, you don't get a keycard. Problem solved, unless you don't have a car.

We have the same set-up, but the problem is that owners all paid when the remote keys were issued, but now a year later 17 (all Thai) have defaulted on their maintenance. So unless you change the keys every year, an expensive proposition, it's very hard to make them pay. I can see the writing on the wall, now that 17 out of 39 have defaulted, the rest will start to drop out as well, myself included. These bloody free-loaders want all the facilities like street lighting, road sweeping, pool maintenance, security etc, for free. They just don't seem to grasp how quickly a village will go downhill once it's not maintained, which of course affects property values.

[mogo51]

A similar problem exists in our gated community. We do not have owner representation on a Committee, but we are in the process of addressing that.

I wonder what is the position regarding fees to houses not sold by the builders/owners. I assume they must pay their dues on those properties as well?

[jobwolf]

The only real way is to go tocourt and if they don't pay the condo's will go for auction and the money will be recovered. Yes it will take some time but most people will pay if they find out the case is in court. We had the same problem and it works this way.

[blazes]

Our Juristic Entity took a high-ranking naval officer to court over maintenance fees. It took four years but we were awarded all back fees + interest + some legal costs. He was given just 10 months to repay the lot. He tried to wriggle the year after but has eventually paid in full.

High-ranking naval officer?

Was he in the crows' nest?

[topt]

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Actually the chances of recovering the money are extremely high, not least because it is impossible (without fraud) to sell a unit without a debt-free certificate from the JPM. Needless to say the JPM should only provide this if all debts are paid.

As far as recovering the debts before a sale go, in the first place you (by "you" I mean the committee and management) should be applying interest to the debt after the first few months in accordance with the building rules and regulations. This could be around 20% per year, compounded.

Then write to the owners who have not paid, indicating the amount of the debt, the interest and the overdue period. Warn them that if they dont pay you will cut off water services and forbid them access to common areas. Dont hesitate to do this if they dont pay as you are entirely within your rights. Watch out for electricity though if this is billed directly by the PEA: you dont have the right to cut it off.

Also it doesnt hurt to post a list of room numbers with outstanding debts in a prominent place so that all owners know exactly who the cheapskates people with bad memories are. Lost face can be a powerful tool.

If they still dont pay after that you can apply to the courts to have the units sold to pay the debts. And you should win without much trouble, assuming that you have followed the procedures of giving written warning etc. Your JPM should be able to provide or obtain legal advice.

Of course it isnt worth applying to the courts until the debts amount to a significant proportion of the value of the unit. But usually the threat will make most people pay up.

Listen to Kitten Kong and don't despair! If you can get your JPM and Building Management on the ball, money is recoverable. Just one warning: Make certain that the Owners are promptly advised when the overdue CAM fees are finally paid off and that this income is included in your annual audit.

One more note: Sometimes these overdue fees build up to an amount that the rogue owner cannot pay off right away and so s/he keeps defaulting. Deals can be made for scheduled payments on a large sum. I've heard that some condos have excused or "forgiven" interest payments just to get the initial CAM fees paid and in the bank - not fair, but something is better than nothing.

Apologies but I highlighted the relevant text - do you know if you can do this in a gated village as well or does it not apply?

Also I don't think you can cut off the water as each meter is owned by the individual?

Thanks

[masuk]

I live in a gated community where you need a keycard to enter and exit by car. If you don't pay your fees or dues, you don't get a keycard. Problem solved, unless you don't have a car.

We have the same set-up, but the problem is that owners all paid when the remote keys were issued, but now a year later 17 (all Thai) have defaulted on their maintenance. So unless you change the keys every year, an expensive proposition, it's very hard to make them pay. I can see the writing on the wall, now that 17 out of 39 have defaulted, the rest will start to drop out as well, myself included. These bloody free-loaders want all the facilities like street lighting, road sweeping, pool maintenance, security etc, for free. They just don't seem to grasp how quickly a village will go downhill once it's not maintained, which of course affects property values.

Is it possible to change the code, as they do in hotels, and only financial members get the new card and code?

[Asiantravel]

The only real way is to go tocourt and if they don't pay the condo's will go for auction and the money will be recovered. Yes it will take some time but most people will pay if they find out the case is in court. We had the same problem and it works this way.

when people here talk about forcing the sale of the property, what happens in cases where the owner has a mortgage which now happens to be greater than the value of the property?

[Daniel Ingalls]

There are leans on properties in Thailand. If for example you don't pay the maintenance (Security, & street cleaning) year after year, there will be a lean on your house. When the house is put on the market for sale.....Buyer beware of hidden costs, They might be on the hook for back maintenance fees, It doesn't go away with new owners.

[Pinot]

Reason # 726 never to buy property in Thailand

[KittenKong]

Apologies but I highlighted the relevant text - do you know if you can do this in a gated village as well or does it not apply?

Also I don't think you can cut off the water as each meter is owned by the individual?

I dont know how this applies to houses, I'm afraid.

For water, in a condo you can shut off the water supply when this is being resold by the building (which it generally is). In a house with an individual meter billed by the water company I dont see that this would be legal.

You can legally prevent access to common areas and facilities, though this may or may not be easy depending on the layout of your development.

[giddyup]

I live in a gated community where you need a keycard to enter and exit by car. If you don't pay your fees or dues, you don't get a keycard. Problem solved, unless you don't have a car.

We have the same set-up, but the problem is that owners all paid when the remote keys were issued, but now a year later 17 (all Thai) have defaulted on their maintenance. So unless you change the keys every year, an expensive proposition, it's very hard to make them pay. I can see the writing on the wall, now that 17 out of 39 have defaulted, the rest will start to drop out as well, myself included. These bloody free-loaders want all the facilities like street lighting, road sweeping, pool maintenance, security etc, for free. They just don't seem to grasp how quickly a village will go downhill once it's not maintained, which of course affects property values.

Is it possible to change the code, as they do in hotels, and only financial members get the new card and code?

No. It's not a key card it's a remote to open the gates. There is still security there as well in case someone forgets their remote, but it would require everyone to be issued with new remotes to prevent access. There's no easy answer unfortunately.

[giddyup]

Apologies but I highlighted the relevant text - do you know if you can do this in a gated village as well or does it not apply?

Also I don't think you can cut off the water as each meter is owned by the individual?

I dont know how this applies to houses, I'm afraid.

For water, in a condo you can shut off the water supply when this is being resold by the building (which it generally is). In a house with an individual meter billed by the water company I dont see that this would be legal.

You can legally prevent access to common areas and facilities, though this may or may not be easy depending on the layout of your development.

You can't shut off the water or electricity for non-payment of maintenance for a house in a village.

[KittenKong]

The only real way is to go tocourt and if they don't pay the condo's will go for auction and the money will be recovered. Yes it will take some time but most people will pay if they find out the case is in court. We had the same problem and it works this way.

when people here talk about forcing the sale of the property, what happens in cases where the owner has a mortgage which now happens to be greater than the value of the property?

Good question. Perhaps one for the "ask the lawyer" forum?

As far as I know for condos the debt is on the unit and so would have to be paid by the bank before the bank itself could get the balance, though I suppose it would be down to the judge to make the final decision.

I dont know what would happen with a house.

[zaZa9]

Reason # 726 never to buy property in Thailand

^ Just thinking the same thing!

Even supposed upstanding public servants see no problem in shirking their communal responsibilities over here , and every poster above suffering the same old consumer in Thailand problem - what should be delivered isnt , and what should be policed isnt either, and what should be a legal consequence is lost in translation

Posts like this are great for me - they keep reminding me when my mind starts wandering toward blocks of land and plans and a 'nice home by the sea' that Thailand is NOT the place to be doing anything of the sort

[recycler]

Putting a list of names of owners and their condo numbers in the elevators and other visible places will help, certainly with those who are sensitive to loosing face.

[Minnehaha]

The only real way is to go tocourt and if they don't pay the condo's will go for auction and the money will be recovered. Yes it will take some time but most people will pay if they find out the case is in court. We had the same problem and it works this way.

when people here talk about forcing the sale of the property, what happens in cases where the owner has a mortgage which now happens to be greater than the value of the property?

Good question. Perhaps one for the "ask the lawyer" forum?

As far as I know for condos the debt is on the unit and so would have to be paid by the bank before the bank itself could get the balance, though I suppose it would be down to the judge to make the final decision.

I dont know what would happen with a house.

If the bank has ownership and they want to sell it they will need to get the "bai plawdt nee" document from the Juristic Person stating that there are no unpaid bills for the condo. This should include unpaid common fees, electric, etc. The condo cannot be sold without this document. This is not easy to get around, especially if you are a bank.

Just speculation here:

I would imagine a house would be in the same situation - and would need the same document. I would imagine this is true for any asset where liens etc. are possible. However, in the case of a house it might be easier to fake/fraud a way around it and conduct an illegal transaction.

[zaZa9]

^ Like bribe a "juristic person" to provide a clean 'bai plawdt nee' ?

Surely not !

[briley]

I agree with KittenKong except it is my understanding that compound interest is not allowed.

Maximum interest is 20% (after 6 months) and that is simple interest. I believe there was a case in Riverside where they charged compound interest and an owner objected. The owner won the case.

On another point I would be careful about listing non-payers. The laws of libel in Thailand are quite draconian.

If a unit is totally abandoned then it is possible for the condo to get control of the unit, sell it and recover their money. The balance is held for the legitimate owner. But it is time consuming.

[HerbalEd]

Apathy?? Not hardly. The non-payers are cheap selfish a...holes who simply don't want to pay and take responsibility for themselves.

Edited March 17, 2015 by HerbalEd

[Brian Robson]

Not sure if this would be practical for condos, but in our community housing, they hold a general meeting every six months or so, emphasise the importance of paying service fees, then pass round diagrammatic list of house numbers and how much each are in arrears. Then owners are asked to pledge when they will be paying up!

People 'lose face' when others can see who is not paying their dues, so it seems to work quite well.

[elgordo38]

Our building had a major problem with this. With a change to a more aggressive manager and committee, they recouped a major part of the money due. The few remaining delinquent units are mainly those that appear to be abandoned ... probably owner dead and no transfer of ownership ever made. I assume those units will remain in limbo if no will exists or heirs come forward.

At our last general meeting they said something about shutting off water, but I can't recall if that was just the (apparently) abandoned units or if the threat was used against others.

We actually used the recovered funds toward some planned maintenance work and consequently the assessment for such things was less this year than it would have been.

Our condo did the same and interest rates can climb fast to 20% per annum. Threatening seemed to bring the dead beats into line. Its another reason I rent and do not buy.