Unbuilt Phuket condo buyers appeal to Gov to push refunds

[NamKangMan]

@ KB

"Build a house" - on land I can never own. I never would.

"Rent a vehicle" - there's the vehicle, there's the key. Ok, there's my money. No problem.

"Rent a house" - there's the house, there's the key. Check the area out first. Check the internet, TV signal, electric, water and security. Ok, there's the money. No problem.

"Buy anything through the internet" - I don't buy from Thai companies. Like most, usually comes from China. Yes, I put some faith in the Thai postal system for delivery, but to date, never had a problem. Most purchases I make over the internet here are for air tickets. Air Asia (Malaysian parent company) - never had a problem.

"Rent a hotel room" - see, "rent a house" for same same.

"Get a driving licence" - I've got Thai driving licences. What's your point there????

"there are some things you don't have to put a deposit on. In fact, many things. Like food and drink" - YES, hence my "bar girl" example. People should treat property in the same way, if they are intent on buying.

"But, when someone wants/needs payment in advance, the convention here is 50% down" - NO, the convention is you are going to be screwed over.

"Why don't you go and play in a tuk-tuk thread." - why don't you come back to this thread when you can offer some advice that ensures people do not become victims to the property industry here?

[KarenBravo]

Have you ever bought a condo off plan NKM? No? I didn't think so.

We all know your views on buying property and you also know that many of us have made quite a bit of money purchasing property here.

You want to keep throwing money away renting, that's up to you. Just as it is a decision for each individual that lives here.

At least you haven't polluted this thread with all your repetitive whining about public transport (yet).

I have bought a condo off-plan. The first one built in Phuket at the Condotel by a reputable company.

And there is the secret behind buying off-plan and thus making a decent profit. Choose a well-known company with a proven track-record.

I paid 20% and then further instalments as work reached certain pre-determined stages.

The total cost was 265K. Sold it after one year of rent-free living for 480K.

PS. When are you ever going to learn how to multiple quote? Is it beyond you?

Edited May 10, 2015 by KarenBravo

[sendintheclowns]

My case has been reported, but only to the extent of the Judgements by the Phuket lower court and Appeal Court. If it is of any interest, we are a retired western couple. We invested 4 million baht in a 30 year lease of an apartment, as we had retired here and wanted income to supplement our pensions. Under the contracts, the developer wax not allowed to borrow against nor to sell the property. He illegally sold the rights to all 12 apartments, with 30 registered year leases ( and their renewal options) to a Phuket businessman, for 15 million baht. The business man claimed that

- he did not visit the property, to notice that there were 12 occupied apartments,

- when he handed over the money to the developer at the Land Office, neither he nor his lawyer did "due diligence" by checking with the Registry Officer to see that there were 11 leases registered, against the buildings,

- when doing this transaction, neither he nor his lawyer noted that there was 1 additional lease application for registration, posted on the public notice board at the Land Office. All of this despite that his loan agreement referred to land, 2 buildings and a swimming pool.

The Court Judgement had nothing to do with the Pleading which we filed. The Pleading was for the Court to rule under the Consumer Protection Act ( that the developer and the lender acted against our interests, by the developer transferring the property to the Thai lender.).

The Judgement said, in plain English, " this is not a lease. it is legally structured like a condo and the plans look like those of a condo. So it must be a condo. Under the Condo laws, you must buy the condo, not lease it. You did not buy it, or if you did, you did not register it as a purchase of a condo property. So your purchase is invalid. And - your lease is invalid.

[sendintheclowns]

Some extra background to my case:

the Judgement also said that we should be charged for illegally trying to get around the restrictions on foreigners owning land.

The logic of this last point was due to us subscribing collectively for 49% of the company shares. These shares were be held for the duration of the lease ( and any extension), and to be returned once the lease expired. The lease structure was prepared by a Thai law firm, which is on the list of lawyers recommended by a number of Embassies, today. It was approved by each investor's personal law firm, in 2004. It has been used by 100's if not 1000's of apartment units sold, on Phuket alone. At Appeal, the Thai business man added an extra charge, that we had tried to defraud him. The irony of this part is he is a very successful business man, selling product to major non- Thai developers on Phuket. At the time of writing, there are apartments listed for resale, with similar lease paperwork registered in place. I have asked several developers and Property agencies if, what they are selling is legal . The answer is 'no problem'.

Now that our Judgement has been public, since early 2014, a number of law firms are reversing their long- standing advice. STILL, a number of law firms continue to say that there is nothing wrong our paperwork, except "maybe you should use a different set up for protecting your lease renewal option". so, legal advice in some cases is good for today - but you had better not go to court and have it reviewed by a Judge, as he may rule that you have nothing.

I think that the lesson learned is, no matter how careful you are with investing your money, in property, here in Thailland, no matter how good the advice you obtain from a law firm and a property agency, the advice may be useless, in hindsight. Because the system of regulations are not reliable. As Bill Barnett described it, you are safe if you buy from a major developer. The problem, is that, on Phuket, the major developers account for at most, 25% of the units sold. The 75% are subject to the laws of the jungle. And, although I love the country and would never leave, I and you are second class citizens. Excuse the length of these 2 posts. I hope there is some guidance in here.

[LivinginKata]

Some extra background to my case:

the Judgement also said that we should be charged for illegally trying to get around the restrictions on foreigners owning land.

<snip>

Just says it all - so much for all these estate agents/legal people. Even the 49% condo rule seems to be in doubt.

[TallGuyJohninBKK]

I think that the lesson learned is, no matter how careful you are with investing your money, in property, here in Thailland, no matter how good the advice you obtain from a law firm and a property agency, the advice may be useless, in hindsight. Because the system of regulations are not reliable.

I'm assuming, the case you're involved in is the one reported in the news here recently, where a Thai judge in Phuket invalidated the long-term (30-year?) lease process.

So... are you still appealing further up the legal chain, or you're out 4M bht and that's the end of it?

Edited October 12, 2015 by TallGuyJohninBKK

[LivinginKata]

I think that the lesson learned is, no matter how careful you are with investing your money, in property, here in Thailland, no matter how good the advice you obtain from a law firm and a property agency, the advice may be useless, in hindsight. Because the system of regulations are not reliable.

I'm assuming, the case you're involved in is the one reported in the news here recently, where a Thai judge in Phuket invalidated the 30-year lease process.

So... are you still appealing further up the legal chain, or you're out 4M bht and that's the end of it?

My undersatnding is that a legally registered condo attracts a 90 year lease (or is it 99 years ?) The 30 year contract usually relates to the actual land, not the building.

[TallGuyJohninBKK]

I think that the lesson learned is, no matter how careful you are with investing your money, in property, here in Thailland, no matter how good the advice you obtain from a law firm and a property agency, the advice may be useless, in hindsight. Because the system of regulations are not reliable.

I'm assuming, the case you're involved in is the one reported in the news here recently, where a Thai judge in Phuket invalidated the 30-year lease process.

So... are you still appealing further up the legal chain, or you're out 4M bht and that's the end of it?

My undersatnding is that a legally registered condo attracts a 90 year lease (or is it 99 years ?) The 30 year contract usually relates to the actual land, not the building.

Here's the prior case that I was referring to, and it sounds like the one SendIn may be part of:

http://www.thaivisa.com/forum/topic/804067-phuket-court-rules-secured-or-collective-leases-are-void/

PHUKET: -- In a shock decision by the Phuket Civil Court, backed by the Region 8 Appellate Court, it has been ruled that the so-called “secured leases” offered by some real estate developers to allow foreigners to secure a cast-iron 90-year lease are not valid.

The case is now to go to the Supreme Court.

The Phuket News’ legal correspondent, Jerrold Kippen, has revealed that not only has the structure been ruled invalid but the courts’ decision may mean that the original underlying 30-year lease, even if registered with the Land Office, is now void – it never existed, leaving the buyer with two handfuls of nothing.

[DrDave]

<snip>

Having lived in Patong for 10 years, I recall when Sai Kor was first being built up and the word was that much of that land was in the hands of the powers

that be. I wonder if the other partner "no longer being around" is a euphemism for something else?

That was my thought, exactly, when this whole "partner no longer around" business was first brought up.

[timewilltell]

My case has been reported, but only to the extent of the Judgements by the Phuket lower court and Appeal Court. If it is of any interest, we are a retired western couple. We invested 4 million baht in a 30 year lease of an apartment, as we had retired here and wanted income to supplement our pensions. Under the contracts, the developer wax not allowed to borrow against nor to sell the property. He illegally sold the rights to all 12 apartments, with 30 registered year leases ( and their renewal options) to a Phuket businessman, for 15 million baht. The business man claimed that

- he did not visit the property, to notice that there were 12 occupied apartments,

- when he handed over the money to the developer at the Land Office, neither he nor his lawyer did "due diligence" by checking with the Registry Officer to see that there were 11 leases registered, against the buildings,

- when doing this transaction, neither he nor his lawyer noted that there was 1 additional lease application for registration, posted on the public notice board at the Land Office. All of this despite that his loan agreement referred to land, 2 buildings and a swimming pool.

The Court Judgement had nothing to do with the Pleading which we filed. The Pleading was for the Court to rule under the Consumer Protection Act ( that the developer and the lender acted against our interests, by the developer transferring the property to the Thai lender.).

The Judgement said, in plain English, " this is not a lease. it is legally structured like a condo and the plans look like those of a condo. So it must be a condo. Under the Condo laws, you must buy the condo, not lease it. You did not buy it, or if you did, you did not register it as a purchase of a condo property. So your purchase is invalid. And - your lease is invalid.

Why can't you buy a lease on a condo - I thought that was quite common once the foreign quota was used up.

[timewilltell]

I think that the lesson learned is, no matter how careful you are with investing your money, in property, here in Thailland, no matter how good the advice you obtain from a law firm and a property agency, the advice may be useless, in hindsight. Because the system of regulations are not reliable.

I'm assuming, the case you're involved in is the one reported in the news here recently, where a Thai judge in Phuket invalidated the 30-year lease process.

So... are you still appealing further up the legal chain, or you're out 4M bht and that's the end of it?

My undersatnding is that a legally registered condo attracts a 90 year lease (or is it 99 years ?) The 30 year contract usually relates to the actual land, not the building.

I have never heard of a 90 year lease in Thailand - 30 year leases are supposedly legal but try enforcing one when there is a problem. Multiple renewable illegal leases I've heard of but never a 90 year lease.

[TallGuyJohninBKK]

The recent court ruling out of Phuket that I posted on earlier in this thread, where farang lessees were told that their investments were basically illegal and void, involved three successive 30 year leases totaling 90 years.

“The leases marketed to foreigners typically provide for an initial 30-year term plus two additional successive 30-year renewal terms.

http://www.thaivisa.com/forum/topic/804067-phuket-court-rules-secured-or-collective-leases-are-void/

[LivinginKata]

My undersatnding is that a legally registered condo attracts a 90 year lease (or is it 99 years ?) The 30 year contract usually relates to the actual land, not the building.

I have never heard of a 90 year lease in Thailand - 30 year leases are supposedly legal but try enforcing one when there is a problem. Multiple renewable illegal leases I've heard of but never a 90 year lease.

Many many years ago I looked at news articles about condo purchases. They seemed to suggest 90 year leases. These days I am aware that only a maximum of 30 years can be legally registered at the land office. I searched about the net for more information on the 90/99 year idea. All I can find is 30 year lease and freehold purchase ....

"CAN FOREIGNER HAVE OWNERSHIP OVER CONDOMINIUM UNIT?

Under the Thailand Condominium Act, Foreigners are allowed to own condominium units in Thailand. There is however on a restriction of not more than 49% of the total combined floor area of all units in a condominium project can be owned by the foreigners, for example if there is the total combined floor area of all units in a condominium project is 1,000 square meters foreigners can have ownership over the condominium units for the total area of not more than 490 square meters, the left of 510 square meters must be owned by Thai entities (Thai individuals or Thai companies or partnership) or sold to the foreigners as leasehold condominium units."

[DrDave]

Many many years ago I looked at news articles about condo purchases. They seemed to suggest 90 year leases. These days I am aware that only a maximum of 30 years can be legally registered at the land office. I searched about the net for more information on the 90/99 year idea. All I can find is 30 year lease and freehold purchase ....

"CAN FOREIGNER HAVE OWNERSHIP OVER CONDOMINIUM UNIT?

Under the Thailand Condominium Act, Foreigners are allowed to own condominium units in Thailand. There is however on a restriction of not more than 49% of the total combined floor area of all units in a condominium project can be owned by the foreigners, for example if there is the total combined floor area of all units in a condominium project is 1,000 square meters foreigners can have ownership over the condominium units for the total area of not more than 490 square meters, the left of 510 square meters must be owned by Thai entities (Thai individuals or Thai companies or partnership) or sold to the foreigners as leasehold condominium units."

I believe that the normal 30 year lease for a condo is still legal and valid.

At issue here are the "secured" leases that were sold to people with a duration of 90 years, which also involved a share purchase in the underlying Thai company that owned the land. The courts have ruled that these "secured" leases are invalid because they seek to get around the 30 year limit on registered leases, and they attempt to hide share ownership in the land. As a result, the original 30 year leases that were registered on the unit titles are now void, since they were part of this scheme.

Now that the "secured" lease scheme and original 30 year leases have been declared to be illegal and void, It seems to me that an appropriate remedy would be to simply register a new, simple 30 year lease. Downside to the foreign purchaser would be that he would need to pay the tax on the lease again, and obviously the lease would expire after 30 years. Of course, the developer would have to agree to do this, assuming they haven't run off with the money or re-sold the unit.

[LivinginKata]

<snip>

Of course, the developer would have to agree to do this, assuming they haven't run off with the money or re-sold the unit.

Exactly. There is zero incentive for the land owner to agree to another 30 years for no further 'fee'. There is a huge incentive for the land owner to ask for the same as the first time, or just sell onto someone else. There is zero protection for the initial leaseholder, yes there may be a contract in place but if the owner defaults on the contract then it's a civil case to be filed, will take many years to resolve in court, and meantime the initial leaseholder is out on the street. Everything is stacked against the leaseholder.

[NamKangMan]

<snip>

Of course, the developer would have to agree to do this, assuming they haven't run off with the money or re-sold the unit.

Exactly. There is zero incentive for the land owner to agree to another 30 years for no further 'fee'. There is a huge incentive for the land owner to ask for the same as the first time, or just sell onto someone else. There is zero protection for the initial leaseholder, yes there may be a contract in place but if the owner defaults on the contract then it's a civil case to be filed, will take many years to resolve in court, and meantime the initial leaseholder is out on the street. Everything is stacked against the leaseholder.

I agree.

Why would they simply offer a new 30 year lease, for free, when they are in control of something that can be resold, after the initial 30 years has expired?

[LivinginKata]

I agree.

Why would they simply offer a new 30 year lease, for free, when they are in control of something that can be resold, after the initial 30 years has expired?

You listen/read comments from people buying/bought a 30 year lease and they usually try to rationise - oh the company/developer/whoever won't default, I trust them. But who knows what will happen 30 years later. People die, companies are bought/sold.

I myself bought a 30 lease in my first month in Patong. Actually I bought the balance of 27 years from a New Zealand guy. I took the view that I would be dead before the lease expired and that I was buying a 27 year rent free house. As It happened I sold on the lease after 3 year - for a profit .... so I did well.

[DrDave]

<snip>

Of course, the developer would have to agree to do this, assuming they haven't run off with the money or re-sold the unit.

Exactly. There is zero incentive for the land owner to agree to another 30 years for no further 'fee'. There is a huge incentive for the land owner to ask for the same as the first time, or just sell onto someone else. There is zero protection for the initial leaseholder, yes there may be a contract in place but if the owner defaults on the contract then it's a civil case to be filed, will take many years to resolve in court, and meantime the initial leaseholder is out on the street. Everything is stacked against the leaseholder.

I agree.

Why would they simply offer a new 30 year lease, for free, when they are in control of something that can be resold, after the initial 30 years has expired?

Actually, my comments were regarding the initial sale (leasehold) of a new condo - not extending a lease after the initial 30 year lease expires. What happens after the expiration of a 30 year lease is always a crap shoot.

My point was that "the right thing to do" in this case would have the developer register a new, valid 30 year (or less) lease since the courts have invalidated the original "secured" lease. The courts have left the original purchasers hanging out to dry with nothing to show for the payments that they made, while the developers who were marketing this scheme in the first place, have been given an opportunity to re-sell a product that was already purchased by somebody else. In other words, the people who bought the "secured" leases have been penalized the entire sale amount, while the developers who sold the "secured" leases have been rewarded with the opportunity for an additional profit of 100% of a secondary sale amount.

The only hope that these original purchasers under the "secured lease scheme seem to have in order to make them whole is to file another case with the courts, suing the developers for either return of their payments, or registration of a new simple 30 year lease that would replace the invalidated lease. I don't have much confidence that this would lead to a positive outcome, though.

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