Condo Late Payment Penalties - Info Needed

[BaldPlumber]

I've got a bit of a technical query regarding the application of late payment penalties for condo shared payments.

 

My understanding is that under current condo law the JPM has the right, if not the obligation, to apply penalty fees for late payment as follows:-

 

1. Up to 6 months late - up to 12%
2. Over 6 months late - up to 20%

 

Also, penalties cannot be compounded, so penalties can not be applied to penalties.

 

Here is my question - assuming that I am correct in my understanding so far.

 

If the penalties are applied annually, then year 1 would seem to be quite straightforward but what would happen in year 2 and beyond?

 

Clearly the up to 6 months fee would not apply, but what would happen to a payment made midway between years 1 & 2?

 

For instance, should a late payer be 18 months late, would they be liable for 2 * 20% of the principal or would the second year be amortised on a daily basis? 

 

So, for the sake of simplicity in the case of someone who is 1 year and 180 days late in a non leap year, should be penalty be (1 * 20%) + 180/365 of the 20% amount?

 

Hope this is all clear 

 

Thanks for any advice

 

 

[Peterw42]

I think it may come down to what is specifically written in your condo rules. And the interpretation of the rules and condo act etc. Some condo blocks will have penalties, cut utilities, take legal action in different time frames.

[BaldPlumber]

Thanks

 

So potentially, it could be payable in full on the anniversary date, or amortized daily or monthly?

 

Can't think of any other sensible options. 

[BaldPlumber]

Edit: daily, weekly or monthly

[KittenKong]

In typical vague fashion the condo act gives interest rates as mentioned but it gives no real detail as to when or even if these penalties should be applied.

 

So it's all up to the committee and JPM.

[Suradit69]

On 4/6/2017 at 2:11 PM, BaldPlumber said:

Thanks

 

So potentially, it could be payable in full on the anniversary date, or amortized daily or monthly?

 

Can't think of any other sensible options. 

You're probably over-thinking how the penalties would be calculated. Management most likely has a cookie cutter approach that would be applied and involve a hand held calculator and the least number of operations possible. The most eloquent equation is the one that is the simplest. If you disagreed with the result, your recourse would involve lawyers and, potentially, a court. In the unlikely event that undertaking favored you, your victory would be of the expensive Pyrrhic variety.

[Jeffkp]

According to Land Office here in Chiang Mai, JPM cannot cut off utilities or water.

[jippytum]

1 hour ago, Jeffkp said:

According to Land Office here in Chiang Mai, JPM cannot cut off utilities or water.

The JPM is required to take legal action against co owners six months in arrears .As a last resort the  JPM with the management committee approval is authorized by the condominium act to  cease the supply of basic utilities to the unit in arrears.

[BaldPlumber]

37 minutes ago, jippytum said:

The JPM is required to take legal action against co owners six months in arrears .As a last resort the  JPM with the management committee approval is authorized by the condominium act to  cease the supply of basic utilities to the unit in arrears.

 

What form of legal action? I would have thought that removing and storing the water meter would have been the quickest and easiest approach.

[smutcakes]

2 hours ago, Jeffkp said:

According to Land Office here in Chiang Mai, JPM cannot cut off utilities or water.

I believe if the utility is supplied and billed by the JPM they can suspend it. E.g. Water utility is billed by the JPM. Electric is typically a contract directly with the service provider and cannot be terminated because you would not be in arrears for that utility and if you were the service provider would cut you off. Another area of the law which needs clearer guidelines. Leaving there to be so much ambiguity allows Lands departments to use their discretion which is always risky.

[bazza73]

Ah. Another argument in favour of renting.

[trogers]

23 hours ago, bazza73 said:

Ah. Another argument in favour of renting.

Nope. Another argument in favour of buying from a matured project which does not have such a problem.

[KittenKong]

On 07/04/2017 at 5:15 AM, smutcakes said:

I believe if the utility is supplied and billed by the JPM they can suspend it. E.g. Water utility is billed by the JPM. Electric is typically a contract directly with the service provider and cannot be terminated because you would not be in arrears for that utility and if you were the service provider would cut you off.

 

This is my understanding also.

[BaldPlumber]

That all makes perfect sense.

Very odd for Thailand!

[tomwct]

Now, let me understand the condo rental rules. I can rent a condo and not pay for 2 years. They cannot turn off my utilities and they will

charge me a 20% late fee. Is this correct? Why would anyone buy a condo for an investment in Thailand? I own a condo in the states for income. If they are one month late, I will have them kicked out with a 10 day warning. I told my wife we need to rent a condo at the beach and we'll be able to use it up to 2 years without payment. No need to buy a beach condo! I love Thailand!

[Peterw42]

8 minutes ago, tomwct said:

Now, let me understand the condo rental rules. I can rent a condo and not pay for 2 years. They cannot turn off my utilities and they will

charge me a 20% late fee. Is this correct? Why would anyone buy a condo for an investment in Thailand? I own a condo in the states for income. If they are one month late, I will have them kicked out with a 10 day warning. I told my wife we need to rent a condo at the beach and we'll be able to use it up to 2 years without payment. No need to buy a beach condo! I love Thailand!

This is not about late/non payment of rent, The thread is about owners not paying their Condo fees and the panalties involved. Nothing to do with renting a condo. 

If you dont pay rent ontime in thailand, you will come home one day and find a big padlock on the door and your stuff out in the street.

Edited April 9, 2017 by Peterw42

[jippytum]

On 4/6/2017 at 7:56 PM, KittenKong said:

In typical vague fashion the condo act gives interest rates as mentioned but it gives no real detail as to when or even if these penalties should be applied.

 

So it's all up to the committee and JPM.

The condo act is quite specific the late payment is 10% after one month increasing to 20% max from day one after three months plus months  overdue .Civil court action to reclaim arrears that may result in the auction sale of the condo. The judge will decide on the final overall interest rate to be paid .The JPM if experienced can represent the condo in court.If a lawyer is preferred all the legal charges will not be repaid only a small percent depending again on judgement.

[smutcakes]

13 hours ago, jippytum said:

The condo act is quite specific the late payment is 10% after one month increasing to 20% max from day one after three months plus months  overdue .Civil court action to reclaim arrears that may result in the auction sale of the condo. The judge will decide on the final overall interest rate to be paid .The JPM if experienced can represent the condo in court.If a lawyer is preferred all the legal charges will not be repaid only a small percent depending again on judgement.

I think everything in your post is incorrect, are you looking at the New or Old Condominium Act? Section 18 of the Act stipulates quiet clearly that late penalties are paid at 12% then 20% depending on their lateness. I don't believe there is anything which stipulates 10%, and the 20% penalty quite expressively states commences when arrears under the section are unpaid for longer than 6 months. Perhaps these are per your own condo regulations which have not been amended to meet the new act.

 

I also don't believe it is practical or every been carried out under the New Act that anyone has had a condo auctioned due to late payment. Even under the old act i think people tried, but it never actually happened. Banks repossessing units, yes, but a JPM taking action and seeing a persons private unit auctioned due to unpaid amounts i dont believe has ever happened. i would be very interested to hear where you have seen this happen. There are condos where people are decades late but this has never been actionable.

 

I very much doubt you would find any willing JPM who is non paid or not a lawyer to try and take individual action against other Co-owners, especially even contemplating trying to have their unit auctioned. It would just be far to risky for any individual non lawyer or paid JPM to even contemplate trying, especially farang ones. If a Farang JPM did it, you can bet your life there would be work permit questions etc etc, no one would want to risk it.

[Henryford]

1 hour ago, smutcakes said:

I think everything in your post is incorrect, are you looking at the New or Old Condominium Act? Section 18 of the Act stipulates quiet clearly that late penalties are paid at 12% then 20% depending on their lateness. I don't believe there is anything which stipulates 10%, and the 20% penalty quite expressively states commences when arrears under the section are unpaid for longer than 6 months. Perhaps these are per your own condo regulations which have not been amended to meet the new act.

 

I also don't believe it is practical or every been carried out under the New Act that anyone has had a condo auctioned due to late payment. Even under the old act i think people tried, but it never actually happened. Banks repossessing units, yes, but a JPM taking action and seeing a persons private unit auctioned due to unpaid amounts i dont believe has ever happened. i would be very interested to hear where you have seen this happen. There are condos where people are decades late but this has never been actionable.

 

I very much doubt you would find any willing JPM who is non paid or not a lawyer to try and take individual action against other Co-owners, especially even contemplating trying to have their unit auctioned. It would just be far to risky for any individual non lawyer or paid JPM to even contemplate trying, especially farang ones. If a Farang JPM did it, you can bet your life there would be work permit questions etc etc, no one would want to risk it.

We have recently taken action against an owner with condo fees 2 years in arrears. Got a Court order against the owner, seized the condo and sold it to the highest bidder.

[smutcakes]

Just now, Henryford said:

We have recently taken action against an owner with condo fees 2 years in arrears. Got a Court order against the owner, seized the condo and sold it to the highest bidder.

I would be very interested to hear about this. Please can you PM a bit more  detail. How long did it take? What did you have to show the court? What law did you do this under? 2 years is not a particularly long time compared to many debt in condos. Even which lawyer was used? We have spoken to many lawyers, including many of the well reputed ones mentioned on here, and not once has any of them even suggested this was a possibility or legal. I think your case must be the first of its kind.

[KittenKong]

On 15/04/2017 at 4:03 AM, jippytum said:

The condo act is quite specific the late payment is 10% after one month increasing to 20% max from day one after three months plus months  overdue

 

It's specific about the rates but nothing in it specifies when penalties must be applied, only when they may be applied. So application is down to the committee and JPM as I mentioned. I see this as a failing.The act needs to be much more specific about many things.

[KittenKong]

22 hours ago, Henryford said:

We have recently taken action against an owner with condo fees 2 years in arrears. Got a Court order against the owner, seized the condo and sold it to the highest bidder.

 

I've heard of two buildings in Pattaya where this has happened. It's a fairly simple matter of outstanding debt: assets are seized and sold by the court. The main stumbling block seems to be the relatively low value of most condo common fees which makes it not worth considering before several years of non-payment.

[Peterw42]

26 minutes ago, KittenKong said:

 

I've heard of two buildings in Pattaya where this has happened. It's a fairly simple matter of outstanding debt: assets are seized and sold by the court. The main stumbling block seems to be the relatively low value of most condo common fees which makes it not worth considering before several years of non-payment.

I know of a couple of blocks that do it, It involves using a lawyer, having office staff available to attend court etc, and its a drawn out procedure, a couple of court appearances to get to the selling of the condo stage. It also opens up a big opportunity for corruption as the condo can be sold for a figure that only covers the debt. The condo management gets permission to sell the condo to recover debt, but its not a public sale, minimum market value etc, Friends and family of a corrupt condo management can buy a million dollar condo for 100,000 outstanding debt. 

Its a big grey area, if the original owner is not around (presume dead), who pockets the difference between the outstanding debt of 100,000 and the sale of 1 million.

Edited April 17, 2017 by Peterw42

[smutcakes]

1 hour ago, KittenKong said:

 

I've heard of two buildings in Pattaya where this has happened. It's a fairly simple matter of outstanding debt: assets are seized and sold by the court. The main stumbling block seems to be the relatively low value of most condo common fees which makes it not worth considering before several years of non-payment.

It quite clearly is not a simple matter, and i would challenge anyone to provide either in PM or regularly, which building this has happened in.

 

Banks repossessing definitely, but JPM challenging in court for a debt and being able to auction off the condo, i simply do not believe is happening. If it was a possibility it would be well known in the market, lawyers would be aware of it and Condo's all over Bangkok and Pattaya would be doing it. They are not.

 

I will be delighted to be proved wrong, but other than 'hearing' about this and that from 3rd parties know one seems to know any specific of this happening.

 

What are the parameters for it? How long the debt is overdue? I simply do not believe this has happened, but as i said would be happy to be proved wrong. Waiting........

 

Cases like that would be in the news, management companies would obviously be very aware of them, lawyers would know about it etc etc, but they dont.

[Peterw42]

3 minutes ago, smutcakes said:

It quite clearly is not a simple matter, and i would challenge anyone to provide either in PM or regularly, which building this has happened in.

 

Banks repossessing definitely, but JPM challenging in court for a debt and being able to auction off the condo, i simply do not believe is happening. If it was a possibility it would be well known in the market, lawyers would be aware of it and Condo's all over Bangkok and Pattaya would be doing it. They are not.

 

I will be delighted to be proved wrong, but other than 'hearing' about this and that from 3rd parties know one seems to know any specific of this happening.

 

What are the parameters for it? How long the debt is overdue? I simply do not believe this has happened, but as i said would be happy to be proved wrong. Waiting........

 

Cases like that would be in the news, management companies would obviously be very aware of them, lawyers would know about it etc etc, but they dont.

Lots of condo management take this action after a time of no payment. If your lawyer doesnt know about debt recovery, maybe its time to get a new lawyer. Any legal entity can take someone to court for recovery of debt and the court can order sale of assets. Its stepping out of the condo act and entering into common law debt recovery. Henryford is giving a first hand account above. Thailand has a "Debt recovery act". 

 

A quick google search brings up lawyers that speclalise in debt recovery

 

http://www.thailand-lawyer.com/debt-collection-thailand.html

 

Im not sure why you think it would make the news, people get taken to court every day and assets sold to recover a debt. As I stated in an earlier post, is requires engaging a lawyer and having staff etc to run the process, go to court etc.

[smutcakes]

6 minutes ago, Peterw42 said:

Lots of condo management take this action after a time of no payment. If your lawyer doesnt know about debt recovery, maybe its time to get a new lawyer. Any legal entity can take someone to court for recovery of debt and the court can order sale of assets. Its stepping out of the condo act and entering into common law debt recovery. Henryford is giving a first hand account above. Thailand has a "Debt recovery act". 

 

A quick google search brings up lawyers that speclalise in debt recovery

 

http://www.thailand-lawyer.com/debt-collection-thailand.html

 

Im not sure why you think it would make the news, people get taken to court every day and assets sold to recover a debt. As I stated in an earlier post, is requires engaging a lawyer and having staff etc to run the process, go to court etc.

Lots of Condo take Co-owners to court to recover debts, none that i am aware of have ever seen the unit be claimed and auctioned off. Please give me one example? It would be news as it would have massive positive repercussions for many condos, with many condos suffering because of this.. (Positive to)

 

I have discussed with many of the International law firms in BKK as well as many local and regional companies and none of them have suggested this is an option.

 

through my work in a related sector i have good knowledge of at least 70 condos through Bangkok, Pattaya and Phuket, many of them with similar problems, many of the take legal action, not one ever has seen this type of thing work. Your link proves nothing other than there is a debt recovery process in Thailand. You said you knew a couple of condos where this has happened, so this discussion can be simply put to bed by just giving one example of a condo where this has happened?

 

 

[Peterw42]

4 minutes ago, smutcakes said:

Lots of Condo take Co-owners to court to recover debts, none that i am aware of have ever seen the unit be claimed and auctioned off. Please give me one example? It would be news as it would have massive positive repercussions for many condos, with many condos suffering because of this.. (Positive to)

 

I have discussed with many of the International law firms in BKK as well as many local and regional companies and none of them have suggested this is an option.

 

through my work in a related sector i have good knowledge of at least 70 condos through Bangkok, Pattaya and Phuket, many of them with similar problems, many of the take legal action, not one ever has seen this type of thing work. Your link proves nothing other than there is a debt recovery process in Thailand. You said you knew a couple of condos where this has happened, so this discussion can be simply put to bed by just giving one example of a condo where this has happened?

 

 

Possibly PM henryford as he mentions successful debt recovery at his condo block in post 19. Personally, my wife works in a condo management office and I am friends with many of the western commitee members and they have done exactly that. 

 

[KittenKong]

3 hours ago, Peterw42 said:

I know of a couple of blocks that do it, It involves using a lawyer, having office staff available to attend court etc, and its a drawn out procedure, a couple of court appearances to get to the selling of the condo stage. It also opens up a big opportunity for corruption ........

 

Yes, that's about it. To me that seems like quite a simple procedure by Thai standards. :)

[KittenKong]

2 hours ago, smutcakes said:

It quite clearly is not a simple matter, and i would challenge anyone to provide either in PM or regularly, which building this has happened in.

 

I know that QPM (condo management company) have some experience of this.  You could ask them.

[tolsti]

3 hours ago, smutcakes said:

It quite clearly is not a simple matter, and i would challenge anyone to provide either in PM or regularly, which building this has happened in.

 

Banks repossessing definitely, but JPM challenging in court for a debt and being able to auction off the condo, i simply do not believe is happening. If it was a possibility it would be well known in the market, lawyers would be aware of it and Condo's all over Bangkok and Pattaya would be doing it. They are not.

 

I will be delighted to be proved wrong, but other than 'hearing' about this and that from 3rd parties know one seems to know any specific of this happening.

 

What are the parameters for it? How long the debt is overdue? I simply do not believe this has happened, but as i said would be happy to be proved wrong. Waiting........

 

Cases like that would be in the news, management companies would obviously be very aware of them, lawyers would know about it etc etc, but they dont.

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