Actions rqd, after AGM vote, to Chg Condo Fiscal Year

[OneZero]

I know that it is possible to change the condo fiscal year to run 01Oct - 30Sep, as long as owners have approved it at an AGM/EGM.   In order to defend such actions legitimacy at an upcoming EGM, I need the following information / specific references to condo law / regulation that I can reference to refute our condo JP claim that it is illegal to make such a fiscal year change.

Questions:

1. Can the AGM vote for change be confirmed by a simple majority show of attendees hands, or is a certain percentage of floorspace required (25%, 33%, 50%, etc).

2. What followup actions by condo representatives (JP, committee, mgr, accountant, etc) are necessary to legally register the change with government office(s).

 

Background:

At a recent AGM at my Chiang Rai condo we were scheduled for a vote to change the fiscal year dates.  One owner asked the JP if it was ok to make such a change.  BTW, the condo pays this JP only 5,000 thb per month, and that may have a bearing on his replies.  The JP initially replied that it was too difficult to do because it required coordination with and inspection visits by several government agencies (which he refused to name).  I replied that my condo in Jomtien had already done so without referencing any great difficulties, and I requested the JP to elaborate on what he considered such great difficulties.  The JP hummed & hawed a bit, and then pulled out a pocket phone from which he read supposed condo law stating that the condo fiscal year must run from 01Jan - 31Dec, and can not be changed.  He went on to state that my condo in Jomtien had therefore acted illegally.  Attendees at the AGM could not refute the JP,  so decided not to vote on the issue now (AGM) but to wait until such time as someone can provide proof that the JP's hasty anwear was either wrong or not the full story.  I was the one tasked with obtaing answears to the questions I am asking above.  If I can come up with specific references that justify the legitimacy of a fiscal year change, and specific actions that need to be accomplished, we could then take a vote, if still desired, at an upcoming EGM already being planned to decide other issues.  

 

Further Background:

My condo in Pattaya did it years ago but the new mgt there is under administrative fire from owners (for other reasons) and is not interested in being responsive to my current queries.  

Evidence that other condos have done this is shown by the following tv link / thread: 

 

[KittenKong]

As far as I know the committee can alter the fiscal year without co-owner approval at all. The fee-paying year cannot be altered without at least a majority vote of those present at a GM, or possibly even a 75% vote of all co-owners, depending on your building regs.

 

In my experience the only people keen to alter the fiscal year will be those who want to steal from the building. It will be very hard if not impossible to correlate income and expenditure and bank balances if the fiscal year is not the same as the fee year and it will allow plenty of scope for fraud, which is the last thing you want to do in Thailand. I'm not aware of any real advantages that changing the fiscal year would give your building.

 

KISS applies in spades in Thailand.

[OneZero]

Thanks for reply.  I had not considered this.  I respect your experience in these matters, so have to ask if there is not some simple way to negate such a negative possibility.

 

[blackcab]

The Condominium Act doesn't have anything to say about this. The stipulation is that there is a 12 month accounting period, not the dates the 12 monthly period must be.

 

Section 38/1 The condominium corporate shall prepare a balance sheet at least once every twelve-month cycle which shall be deemed as accounting year of such condominium corporate.

The balance sheet under paragraph one must contain the particulars on the amount of properties and liabilities of the condominium corporate as well as receipt-expenditure account and audited by an auditor and then submitted to the Joint Owner General Meeting for approval within one hundred and twenty days from the date ending the accounting year.

 

To change the accounting period you need permission from the Revenue Department. This might be best applied for by your accountant, who will be heavily involved in this process anyway.

 

Once the Revenue Department give consent, the Ministry of Commerce needs to be informed - again, your accountant can deal with that.

 

I can't see why this cannot be decided by majority vote at an AGM. There is no mention in the Condominium Act of a certain percentage of owner's votes being required.

 

IMPORTANT: Please ensure your condo accounts are in good shape. Requests to change the accounting period can often be the result of people trying to evade tax.

 

As such be prepared for a tax investigation by the Revenue Department. I would say that with a condominium it is less likely you will be inspected, but don't rule it out.

[KittenKong]

3 hours ago, OneZero said:

Thanks for reply.  I had not considered this.  I respect your experience in these matters, so have to ask if there is not some simple way to negate such a negative possibility.

 

 

I dont think so. If the accounts are hard to read for any reason then there is simply more scope for fraud. Keep them as clear and detailed as you possibly can.

[OneZero]

KittenKong, blackcab,

I thank both of you very much for your very helpful advice.

[lkn]

2 minutes ago, KittenKong said:

I dont think so. If the accounts are hard to read for any reason then there is simply more scope for fraud. Keep them as clear and detailed as you possibly can.

Many condominiums do cash accounting and omit personal accounts, which already makes it hard to check that all income is reported, but if the accountant is asked to do proper accounting (and complies) then doing accrued payments for income should make it simple to check that all the income is there.

 

And as blackcab has said, there is actually nothing about this in the Thai Condo Act. Only the requirement to publish income and expenditure reports within 15 days of the end of each month, and present an audited financial report at the AGM (no less than 120 days after end of financial year).

 

I would argue that the JPM could decide to change the financial year, without even running it past the committee. Of course the proper thing would be to present the proposal at an AGM.