Condo Service Charge Laws?

[dave111223]

I'm some what confused with the service charge laws. My wife and I were discussing the condo building 'situation' with the condo 'officers' (the employees who manage the condos affairs); as bulding is in need of some maintainance.

They said that their budget was seriously limited due to the amount of residents that simple just dont pay their service charges.

As i understand it the only way the service charges are enforced is when you go to sell the condo you *must* have all the service balance paid off, or the department of land will not allow you to transfer ownership.

However what if someone never pays their service charges, and never sells their condo? Eventually it must become impossible to sell the condo?

For example if you bought a condo was 500,000 baht 10 years ago, and never paid the service, and say the balance after 10 years was 600,000 baht, so if you sold the condo you'd lose 100,000 baht? So obviously in their situation you'd just never sell the property?

Is their any kind of recourse that the 'building' can take against dead beats that never pay their service charges (causing the rest of us residents to lose money on our investments)?

(Obviously this is Thailand so i'm sure the budget is also limited by lots of people skimming off the top here and there, but save these comments for another thread)

[backflip]

The recourse available to condo building management is written in the condo by-laws. If the building management answers your question, "We don't know", that's the problem. When I was looking for a condo, I visited a couple buildings that were in need of a lot of maintenance, and the biggest landlord (who owned a couple dozen rental units) simply refused to apy the condo fee. Both buildings were on the vege of bankrupcy...and the real estate agent wanted to know why I didn't want to buy a unit there.

[johnnyk]

This seems to be a common condo problem.

People don't want to pay the fees as they don't see any immediate benefit and its hard to enforce. Of course, its not about immediate benefit but this concept is beyond the reach of some people.

Naturally, the building deteriorates and so does your investment.

Caveat emptor!

Edited October 16, 2006 by johnnyk

[Gary A]

When you are looking to purchase a condo unit you should be looking at the condition of the common grounds and the security. One of the first questions you should ask is the condition of the general fund. I have a unit in Lalana Jomtien and the general fund has such a huge surplus that they gave some money back to the owners the past two years. My maintenance fee is 10 baht per square meter per month or 600 baht per month for mine. I got back 2,000 baht last year.

That's just another reason I would NEVER buy pre-construction. The developer doesn't care about what happens after the units are sold. He just wants to take his money and run.

[ZZZ]

Some condos have written in the condo by-laws that the management have the authority to stop access to units where the condo fee have not been paid, others shut off the water and electricity supply to these units.

It's all up to you as an owner to get your fellow owners to vote this in to your condos by-laws.

[johnnyk]

But getting the mgmt to do it might be another story.

[dave111223]

Thanks for the comments, i should be able to join the 'condo committee' at the beginning on the new year, so hopefully at that point i'll be able to get some changes enacted.

Some condos have written in the condo by-laws that the management have the authority to stop access to units where the condo fee have not been paid, others shut off the water and electricity supply to these units.

Cutting electricity and water are both good ideas, 'stopping access' seems too a bit to confrontational by Thai standards, not sure if i'd be able to get people to agree with that one.

These methods would work for the really cheeky b*stards that actually live at the building without paying the service.

But i'm still wondering about the owners who dont live at the building, and have just 'abandoned' the unit, what recommendations do you guys have with respects to these units?

Edited October 16, 2006 by dave111223

[ZZZ]

Introduce a hefty late payment charge. This will make them pay up on time in stead of wait until they have to when they sell the unit.

[dave111223]

Introduce a hefty late payment charge. This will make them pay up on time in stead of wait until they have to when they sell the unit.

There is already hefty fine for late payment (or atleast what i think it hefty). 10% per month on the total late balance (so the balance is compounded at 10% per month).

But i almost think this encourages people not to pay if they havent paid for awhile. As after a few month of no payment, this total can add up pretty quickly.

[briley]

Our condo management do have the ability to get a court order to take over a condo who's owner is in arrears - mind they are not willing to go that far but the threat does keep the default numbers down.

Naming and shaming can also work, if management are willing. Generally getting condo fees paid depends upon the tenasity of the management in persuing the problem.

As others said look for a place that is in good condition, also look for a high % of farangs, not that they always pay!

[astral]

I live in Penang, so it is not quite the same, but I read on a recent bill to my landlord,

who is behind with his management fees (), that the card for bringing the car in will be

revoked if payment is not made.

No problem for me as I ride a motorcycle and can scoot round the end of the barrier.

[Dragonman]

Some legal comments regarding points made.

Water may be cut off, although if the person is not living there doesn't matter much. Electricity cut off and restriction of rights of access are not strictly legal, but some Condos do anyway.

The giving of 2,000 baht back to residents from maintenance and sinking fund is dubious in relation to Juristic Person Law 1994.

It is correct that litigation may take place but expensive ( more than maintenance fees).

Registration cannot take place normally until back fees are paid. People should ensure there are no back fees when contract completed, or you are liable.

Late payment charges of 10% per month compounded would likely be overturned in Court as per Contracts Law. But reasonable scare tactic, if owner not aware.

[steveromagnino]

Our condo management do have the ability to get a court order to take over a condo who's owner is in arrears - mind they are not willing to go that far but the threat does keep the default numbers down.

Naming and shaming can also work, if management are willing. Generally getting condo fees paid depends upon the tenasity of the management in persuing the problem.

As others said look for a place that is in good condition, also look for a high % of farangs, not that they always pay!

Agree with most, although I look for the opposite of high % of foreigners; most of the buildings that were in disrepair when I purchased my place were that way due to high numbers of rented units; sometimes high numbers of non-Thai tenants/landlords and thus high numbers of people who had no interest in paying the body corp, since the tenants if any couldn't care less about their landlord being named and shamed; stopping water supply or power might not be possible in buildings without centralised metering.

Go for a building of B grade or higher, and with a high proportion of owner occupiers, and then the 'name and shame' plus restriction of services has more impact. If the person is not Thai with vacant unit (aparently a fair few Korean owned units are like this) then they have little incentive to pay body corp for years. Seeing somewhere in operation for a while and you'll know how well it is maintained.

Might be very different outside of BKK though; not sure how slums like View Talay will survive; their development with the dolphin swimming pool looks like a dog; I guess that is a good indication of what their new places will be like?!

[BlackJack]

I cant see why the situation cannot be reversed in that the co-owner that doesnt pay the fees cannot enter the building.

The co owner under civil law must then take the matter to court to get it resolved - there money not the condo's money.

We I am now there are 20 court cases running - coming out of my fees. I think the situation should be reversed as above.

If fees havent been paid then the property should be seized and auctioned off.

Any leagal buffs out there want to comment

thanks

[Gary A]

This year again, the condo association is returning 2,000 baht of my maintenance fee IF I attend the association meeting. The meetings are well attended. Since it will cost me more than 2,000 baht to make the trip, they will be able to keep the money this year.

[ThaiBob]

I cant see why the situation cannot be reversed in that the co-owner that doesnt pay the fees cannot enter the building.

The co owner under civil law must then take the matter to court to get it resolved - there money not the condo's money.

We I am now there are 20 court cases running - coming out of my fees. I think the situation should be reversed as above.

If fees havent been paid then the property should be seized and auctioned off.

Any leagal buffs out there want to comment

thanks

I live in a condo/townhouse development here in California. Owners whose dues are in arrears is a minor problem because the assciation policy is clear and enforced. Late monthly payment means a 15% penalty. Two months late and the association can declare the dues delinquent and can start process to auction off propery. If there are hardships the association usually can work out a re-payment schedule with the owner. Any legal costs are charged to the default owner. These drastic measures are seldom necessary since just the threat by the association usually gets the desired results.

[quiksilva]

There is truly very little that a condominium manager can do, yes you can cut the water off, but as someone said before it it illegal in Thailand to cut off the juice and restrict access.

However, depending on the condo by-laws, they usually have the power to block the sale of units, until all arrears have been paid.