Buying land/house in a property company versus no property company

[Jmathews]

Greetings,

I wanted to open a discussion about the pro's and con's of buying land/house within a property company structure versus buying without.

Obviously, within a property company structure there would normally be rules and formalities to follow based upon the contract.

Personally, my experience with a property company (in San Sai, Chiang Mai) is unsatisfactory to say the least. And it has nothing to do with being a farang because my previous Thai neighbor who is a lawyer, gave up dealing and got his money back, after the 1yr warranty, and moved on.

The Pro's I see are like;-

- a known contract of rules to abide by

- added security

- finance plan with monthly repayments (if you can't pay with cash)

The Con's I see are like;-

- the rules mean nothing if the property company do not live up to them

I would like to invite input by the members.

Cheers

[pinkpanther99]

The cons are that the purpose of setting up a company or using a company to buy property in Thailand in order to get around the laws on foreigners 'owning' land is illegal.

No two ways about it.

And don't let some real estate agent tell you otherwise.

Other risks are that you can easily have your 'company' transferred away from you and you are all but helpless to do anything about it.

Watch this: http://www.thaivisa.com/forum/topic/856992-defrauded-by-my-wife-and-criminals-in-thailand-bbc-special-report/

[Jmathews]

Just to clarify, I am not talking about buying land / house with my 'own' company.

This discussion is about an existing Thai property company that I bought the house from, i.e., we have paid for it and we have the channote,verified by the Land Department, in our possession.

[MaeJoMTB]

The biggest 'con' is the property company taking out loans or running up debts.

Your house is their collateral.

What do you do if they go bust?

[LNV]

There are thousands of foreigners here who have bought land / property under a company like this. Are they all just seriously taking a huge risk? Is there any safeguard at all when looking to buy property in this manner?

[Jmathews]

The cons are that the purpose of setting up a company or using a company to buy property in Thailand in order to get around the laws on foreigners 'owning' land is illegal.

No two ways about it.

And don't let some real estate agent tell you otherwise.

Other risks are that you can easily have your 'company' transferred away from you and you are all but helpless to do anything about it.

Watch this: http://www.thaivisa.com/forum/topic/856992-defrauded-by-my-wife-and-criminals-in-thailand-bbc-special-report/

Just to clarify, I am not talking about buying land / house with my 'own' company.

This discussion is about an existing Thai property company that I bought the house from, i.e., we have paid for it and we have the channote,verified by the Land Department, in our possession.

[Jmathews]

There are thousands of foreigners here who have bought land / property under a company like this. Are they all just seriously taking a huge risk? Is there any safeguard at all when looking to buy property in this manner?

Thanks LNV

Pro for us: We have the channote in our possession.

Con for us If the property company goes belly up then we could lose out on the up-front 2yr 'rubbish collection & security service - about 20K baht if my memory is correct.

regards

[Robert24]

not sure why you worry about rubbish collection fee. don't you pay this anyway regardless whether you own it through the company or direct as an individual?

Main con from my experience is the anual tax returns you need to do for the company through which you own the house. Obviously you need to hire a certified accountant and there is cost involved. Everything else is about the same in my opinion.

[hhgz]

"Personally, my experience with a property company (in San Sai, Chiang Mai) is unsatisfactory to say the least. And it has nothing to do with being a farang because my previous Thai neighbor who is a lawyer, gave up dealing and got his money back, after the 1yr warranty, and moved on."

You've answered your own question.

[MaeJoMTB]

Pro for us: We have the channote in our possession.

But the chanote doesn't have your name on it, and the company can request a new one at any time from the land office.

[Robert24]

Pro for us: We have the channote in our possession.

But the chanote doesn't have your name on it, and the company can request a new one at any time from the land office.

that would depend on the company's ownership structure.

[MaeJoMTB]

Pro for us: We have the channote in our possession.

But the chanote doesn't have your name on it, and the company can request a new one at any time from the land office.

that would depend on the company's ownership structure.

Too lazy to read the previous posts?

Or too stupid to understand them?

[Robert24]

Pro for us: We have the channote in our possession.

But the chanote doesn't have your name on it, and the company can request a new one at any time from the land office.

that would depend on the company's ownership structure.

Too lazy to read the previous posts?

Or too stupid to understand them?

apologies if I missed something. It's probably because I'm too stupid as you point out.

[trogers]

Miscommunication due to use of terms?

Did you mean a developer of the housing estate when you said 'property company'?

[Jmathews]

"Personally, my experience with a property company (in San Sai, Chiang Mai) is unsatisfactory to say the least. And it has nothing to do with being a farang because my previous Thai neighbor who is a lawyer, gave up dealing and got his money back, after the 1yr warranty, and moved on."

You've answered your own question.

Yes,in my case it has been unsatisfactory but the original point of the discussion was whether the consensus of opinion suggests yes or no.

regards

[Jmathews]

Pro for us: We have the channote in our possession.

But the chanote doesn't have your name on it, and the company can request a new one at any time from the land office.

Actually, the chanote has my wife's name on it as per the transaction at the local Ampur during the FULL payment from us to the Property Company. So, the property sold cannot request a new one.

regards

[Jmathews]

Miscommunication due to use of terms?

Did you mean a developer of the housing estate when you said 'property company'?

Thank you Trogers - yes it is a developer of a housing estate.

regards

[sendintheclowns]

Add me to the stupid list.

Can I ask you to clear the air, for me ?

You say you bought a house and land in a developers company. Then you say the land chanoet title is in your wife's name.

How does that work?

Is your question about the pros and cons of the developers company providing management services?

Who owns the house,? it should say so on your purchase agreement.

If you or you and your wife own the house, no problem. If the house remains in the developers company, ( this assumption doesn't make sense, I know) for some reason, there are problems, which I'll avoid mentioning.

Is there not still a rule prohibiting your Thai wife from buying land with money sourced directly from you ( I assume you are a Farang.

I won't touch the issue of protecting your equity, should you wife borrow or otherwise encumber the property.

Looking to help, not hinder.

[sendintheclowns]

Add me to the stupid list.

Can I ask you to clear the air, for me ?

You say you bought a house and land in a developers company. Then you say the land chanoet title is in your wife's name.

How does that work?

Is your question about the pros and cons of the developers company providing management services?

Who owns the house,? it should say so on your purchase agreement.

If you or you and your wife own the house, no problem. If the house remains in the developers company, ( this assumption doesn't make sense, I know) for some reason, there are problems, which I'll avoid mentioning.

Is there not still a rule prohibiting your Thai wife from buying land with money sourced directly from you ( I assume you are a Farang.

I won't touch the issue of protecting your equity, should you wife borrow or otherwise encumber the property.

Looking to help, not hinder.

[sendintheclowns]

Excuse the double post - does anyone suffer from this problem? My first post and only this evening generated the following error message " The administrator has limited the number of new posts you can submit within a short time frame. Please wait 12 seconds before replying or posting a new topic." I Click on 'post' button. Result is a duplicate post.

[sendintheclowns]

A good discussion/ explanation of why the type of error message arises which I got is available at the TV support forum .

[trogers]

Seems this topic is similar to comparing buying a house in a gated community, to buying a stand alone house.

[Farang99]

I bought a house in a company development. As well as the price for the house and land there was also a lump some to cover "lifetime maintenance" of the development. Unfortunately, the company ignored the possibility that bank interest rates might change, and as they dropped the development slowly frittered away the capital until there was none left. So now they have to go round trying to collect contributions to maintenance from the individual houses - with limited success, especially as the maintenance is pretty well non-existent!

[KittenKong]

I bought a house in a company development. As well as the price for the house and land there was also a lump some to cover "lifetime maintenance" of the development. Unfortunately, the company ignored the possibility that bank interest rates might change, and as they dropped the development slowly frittered away the capital until there was none left. So now they have to go round trying to collect contributions to maintenance from the individual houses - with limited success, especially as the maintenance is pretty well non-existent!

Never believe any future promises you may receive here: they are generally worthless.

[Robert24]

@ Op: if i your topic is gated community vs stand alone, pls see below my key points:

1) only buy in a gated community that is from a reputable company like Land & Houses or Sansiri etc. Look at some of the gated communitied from some of these developers that are 15-20 yrs old. Then you see who will maintain it well in the long run.

2) gated communities usually have wealthier communities, hence you have less issues with some other problems when you live in a stand alone house

3) Security: If you travel frequently, a gated community is better. A stand alone is ok if you stay home most of the time.

4) stand alone is great if you build somewhere you or your wife knows the community, the neighbours etc.

hope this helps

[KittenKong]

I think what the OP wanted to ask is "is it better to buy from a developer in a managed village or have a house built myself"?

And the answer is "it all depends on how good the developer/management is". And the answer that is that most such management is mediocre to poor.

[Jmathews]

Add me to the stupid list.

Can I ask you to clear the air, for me ?

You say you bought a house and land in a developers company. Then you say the land chanoet title is in your wife's name.

How does that work?

Is your question about the pros and cons of the developers company providing management services?

Who owns the house,? it should say so on your purchase agreement.

If you or you and your wife own the house, no problem. If the house remains in the developers company, ( this assumption doesn't make sense, I know) for some reason, there are problems, which I'll avoid mentioning.

Is there not still a rule prohibiting your Thai wife from buying land with money sourced directly from you ( I assume you are a Farang.

I won't touch the issue of protecting your equity, should you wife borrow or otherwise encumber the property.

Looking to help, not hinder.

That's ok... The title I did has cause misunderstandings. Please read Robert24 message below i.e. gated community vs stand alone

[Jmathews]

not sure why you worry about rubbish collection fee. don't you pay this anyway regardless whether you own it through the company or direct as an individual?

Main con from my experience is the anual tax returns you need to do for the company through which you own the house. Obviously you need to hire a certified accountant and there is cost involved. Everything else is about the same in my opinion.

I am in a gated community, if that helps clarify.

regards

Edited October 7, 2015 by Jmathews

[Jmathews]

I think what the OP wanted to ask is "is it better to buy from a developer in a managed village or have a house built myself"?

And the answer is "it all depends on how good the developer/management is". And the answer that is that most such management is mediocre to poor.

Thank you - that is what I was trying to ask.

Yes, I suspect you are correct - in my case I would rate them as poor.

I was keen to get pro's and con's to this discussion though to promote some sort of criteria to use to compare in a 'developed gated community' v's standalone.

regards

[Jmathews]

Miscommunication due to use of terms?

Did you mean a developer of the housing estate when you said 'property company'?

Yes that is what I meant - thank you