Do developers with unsold units have to pay common facilities fees?

[thairookie]

Any thai lawyers who can comment?

[KittenKong]

Yes, they certainly should. The problem is that often in new buildings the developer is also the management company, and quite possibly the JPM, so they are unlikely to be in a hurry to charge themselves. A good committee should be able to insist on this, if they arent in the pockets of the developer also.

 

Corruption and deceit here can be very extensive.

[trogers]

6 hours ago, KittenKong said:

Yes, they certainly should. The problem is that often in new buildings the developer is also the management company, and quite possibly the JPM, so they are unlikely to be in a hurry to charge themselves. A good committee should be able to insist on this, if they arent in the pockets of the developer also.

 

Corruption and deceit here can be very extensive.

In my experience during the Tomyum Kung crisis, not only did the developer not pay the common fees and sinking funds for his unsold stock, he used the sinking fund paid by buyers to cover the shortfall in maintaining the development...

[Familyaffairs]

Yes ! No question about it. You can check if they have paid through the financials. If they haven't for more than 6 months ,you can disconnect utilities, and refuse usage of common area facilities such as the pool, parking, gym, lifts. You also do not need to remove their garbage. If you have more questions, feel free to ask.

[thairookie]

In my experience during the Tomyum Kung crisis, not only did the developer not pay the common fees and sinking funds for his unsold stock, he used the sinking fund paid by buyers to cover the shortfall in maintaining the development...

Oh, thanks for the reminder.

[thairookie]

Yes ! No question about it. You can check if they have paid through the financials. If they haven't for more than 6 months ,you can disconnect utilities, and refuse usage of common area facilities such as the pool, parking, gym, lifts. You also do not need to remove their garbage. If you have more questions, feel free to ask.

If we disconnect the common facilities the paying owners will be affected.

[thairookie]

Yes, they certainly should. The problem is that often in new buildings the developer is also the management company, and quite possibly the JPM, so they are unlikely to be in a hurry to charge themselves. A good committee should be able to insist on this, if they arent in the pockets of the developer also.
 
Corruption and deceit here can be very extensive.

My fear is even if the units are eventually sold, the arrears will not be paid as JPM might sign the No Debt Certificate without asking questions.

[elgordo38]

12 hours ago, KittenKong said:

Yes, they certainly should. The problem is that often in new buildings the developer is also the management company, and quite possibly the JPM, so they are unlikely to be in a hurry to charge themselves. A good committee should be able to insist on this, if they arent in the pockets of the developer also.

 

Corruption and deceit here can be very extensive.

And expensive. 

[1FinickyOne]

My dad in USA moved into a newly built home in a 3 stage community and spent the last ten years of his life on a obsessive quest to get the developer to pay for the fees during the 2 years it took to complete construction and sell all units. He might have been right, but never got them to pay a nickel. 

 

Though legally correct, that seemed a big burden to bear for any developer. 

[Jeffkp]

6 hours ago, Familyaffairs said:

Yes ! No question about it. You can check if they have paid through the financials. If they haven't for more than 6 months ,you can disconnect utilities, and refuse usage of common area facilities such as the pool, parking, gym, lifts. You also do not need to remove their garbage. If you have more questions, feel free to ask.

We were informed by the Chiang Mai Land Office that we were not allowed to cut off utilities for owners in arrears.

 

 

[Jeffkp]

6 hours ago, thairookie said:

My fear is even if the units are eventually sold, the arrears will not be paid as JPM might sign the No Debt Certificate without asking questions.

That is why the owners committee is so important. They need to watch everyone. I'm chair of our condo's committee and I meet every month with the JPM. I also must cosign all checks.

[MyFriend You]

6 hours ago, thairookie said:

 

Oh, thanks for the reminder.

 

Yeah, 56 Baht to the $$  - $12K bought me 675,000 baht, I lived on that for about five years.  But all those unfinished projects throughout Bangkok where eyesores for years on end.

[bazza73]

The arguments in favour of renting rather than buying just keep rolling on.

In my condo, the body corporate fees have not increased for 20 years. A bank owns a large number of apartments, and every time an AGM tries to increase fees to meet rising running costs, it gets voted down. Cuts to staff levels so far.

One of my friends there has sold out because he thinks amenities such as the swimming pool will be forced to close. I'll be out of there as well if that happens - why would I pay 10,000 baht a month for room only, when there is a glut of rooms in Chiang Mai for 4500 baht/month?

It's not just the developers who have the capacity to screw up a development.

[Jeffkp]

5 minutes ago, bazza73 said:

The arguments in favour of renting rather than buying just keep rolling on.

In my condo, the body corporate fees have not increased for 20 years. A bank owns a large number of apartments, and every time an AGM tries to increase fees to meet rising running costs, it gets voted down. Cuts to staff levels so far.

One of my friends there has sold out because he thinks amenities such as the swimming pool will be forced to close. I'll be out of there as well if that happens - why would I pay 10,000 baht a month for room only, when there is a glut of rooms in Chiang Mai for 4500 baht/month?

It's not just the developers who have the capacity to screw up a development.

Sorry, but sounds like a slum.

[bazza73]

1 minute ago, Jeffkp said:

Sorry, but sounds like a slum.

You're entitled to your opinion. However, I doubt the guy who turns up at the condo every year from Bangkok in his Lamborghini would share it.

[joebrown]

19 hours ago, KittenKong said:

Yes, they certainly should. The problem is that often in new buildings the developer is also the management company, and quite possibly the JPM, so they are unlikely to be in a hurry to charge themselves. A good committee should be able to insist on this, if they arent in the pockets of the developer also.

 

Corruption and deceit here can be very extensive.

Here's a classic example of why the owners' Management Committee should be vigilant in pursuit of common fees for unsold units. I bought into a small (150 units) condo development in Jomtien. It became apparent that the developer was inviting his VIP friends to take up 'rent free' occupation of several unsold units. These VIPs never paid common fees, but felt it was their right to use all common facilities, at the expense of the genuine owners. It got to the stage where I volunteered to sit in my car at about 20.00hrs some distance from the building so as to identify those units obviously lit and occupied, where no fees had been paid. When confronted with evidence of non-fee paying occupation of unsold units, the developer reluctantly agreed to pay the common fees. Caveat Emptor! 

[trogers]

1 hour ago, joebrown said:

Here's a classic example of why the owners' Management Committee should be vigilant in pursuit of common fees for unsold units. I bought into a small (150 units) condo development in Jomtien. It became apparent that the developer was inviting his VIP friends to take up 'rent free' occupation of several unsold units. These VIPs never paid common fees, but felt it was their right to use all common facilities, at the expense of the genuine owners. It got to the stage where I volunteered to sit in my car at about 20.00hrs some distance from the building so as to identify those units obviously lit and occupied, where no fees had been paid. When confronted with evidence of non-fee paying occupation of unsold units, the developer reluctantly agreed to pay the common fees. Caveat Emptor! 

But no hesitation to do merits at the temple...?

[Henryford]

Yes, we have successfully taken the developer in our condo to Court for unpaid common fees. But you need a strong Committee to push it through.

Edited May 1, 2017 by Henryford

[thairookie]

Yes, we have successfully taken the developer in our condo to Court for unpaid common fees. But you need a strong Committee to push it through.

Was there a verdict from the Court or you are still in the process of obtaining judgment?

[Henryford]

1 hour ago, thairookie said:

 

Was there a verdict from the Court or you are still in the process of obtaining judgment?
 

Yes there was a verdict from the Court for the first year they did not pay but you have to reapply for every year they don't pay so we doing it again every year !!!

[joebrown]

23 hours ago, trogers said:

But no hesitation to do merits at the temple...?

Sounds like you know who I'm writing about!!

[thairookie]

Yes there was a verdict from the Court for the first year they did not pay but you have to reapply for every year they don't pay so we doing it again every year !!!

And your developer paid up?

So if they are in arrears for 5 years we can't obtain judgment for all 5 years?

[trogers]

9 hours ago, thairookie said:

 

And your developer paid up?

So if they are in arrears for 5 years we can't obtain judgment for all 5 years?

 

Sure you can. Just that court action can only be taken after a sin has been committed, and not before.

 

But interesting to know that the project still have unsold stocks 5 years after completion of construction, 2011 to 2016.

Edited May 1, 2017 by trogers

[JaiLai]

Yeah, 56 Baht to the $$  - $12K bought me 675,000 baht, I lived on that for about five years.  But all those unfinished projects throughout Bangkok where eyesores for years on end.

You lived on 675k baht for 5 years? Wow...

[Henryford]

10 hours ago, thairookie said:

 

And your developer paid up?

So if they are in arrears for 5 years we can't obtain judgment for all 5 years?

 

Yes the developer paid up for the first year. We took them to Court for the 2nd year and got another judgment. We didn't wait 5 years but i presume you could get a judgment for all 5 years if they are in arrears.

[Henryford]

53 minutes ago, trogers said:

Sure you can. Just that court action can only be taken after a sin has been committed, and not before.

 

But interesting to know that the project still have unsold stocks 5 years after completion of construction, 2011 to 2016.

I bet every condo in Pattaya has unsold stocks after 5,10, 15 years. The new View Talays must be 50% unsold.

[trogers]

30 minutes ago, Henryford said:

I bet every condo in Pattaya has unsold stocks after 5,10, 15 years. The new View Talays must be 50% unsold.

There can be no capital appreciation in the presence of unsold stock...

[KittenKong]

On 30/04/2017 at 11:03 AM, thairookie said:

My fear is even if the units are eventually sold, the arrears will not be paid as JPM might sign the No Debt Certificate without asking questions.

 

Well, yes, hence my comment about corruption. All you can try and do is install a valid committee and JPM and make sure the JPM is aware that everything will be checked. The condo act is slightly in your favour in that it restricts the voting rights of any one person (real or juristic) to less than the total of all other voters. Not very helpful if your developer still owns about half the units and also has a few friends in the building.

[KittenKong]

On 30/04/2017 at 10:49 AM, Familyaffairs said:

Yes ! No question about it. You can check if they have paid through the financials. If they haven't for more than 6 months ,you can disconnect utilities, and refuse usage of common area facilities such as the pool, parking, gym, lifts. You also do not need to remove their garbage. If you have more questions, feel free to ask.

This is all very well for owner-occupiers, or even rented units, but the developer is unlikely to care very much if services are cut off to unsold units.

 

By the way, the only utilities that can legally be disconnected are those billed directly by the building. So normally water but not electricity.

[KittenKong]

3 hours ago, trogers said:

There can be no capital appreciation in the presence of unsold stock...

 

There certainly can if all the farang units are sold leaving only Thai quota units (which is the case in several View Talay buildings such 6, 3 and 5), or indeed if all the desirable units are sold leaving only ones that no one wants because they aren't very nice (which is partially the case in VT7).

 

That said, there being unsold units certainly makes capital appreciation somewhat less likely.