Thai condo owners not paying maint fees?

[Jimmy Canuck]

Hi all. Just read a kind of discouraging story, on thaicrisis.wordpress, from a couple yrs ago, topic title is 'condo owner arrested for working illegally'... says a farang who owned i think 5 condos in a building was elected as juristic person (what we call 'member of strata council' in canada) and was arrested for working w/o a permit, as he served on the council, despite it being an unpaid position. The Thai Law quoted specifies that you don't have to be paid to be charged with this - comparisons were made to farangs helping with post-tsunami clean up who were told they could not continue w/o work permits.
Apparently he pissed off a Thai owner who did not pay maint fees, and the Thai arranged for the authorities to step in. Several comments that follow said that it is common for Thais to refuse to pay the fees, letting the farang owners pay - and as it seems to be illegal for us, aliens as we are, to take part in the running of the building, that means Thais are making the decisions on spending but perhaps not contributing to that...
This is fairly disturbing news to us. Do any of you seasoned expats have a history living in a foreign-owned condo, and could perhaps provide some input? One of you guys, was it johnnyk or hhfarang? mentioned on one of my previous topics earlier that Thais often just refuse to pay the fees. Here in Canada if you are a few months in arrears the Council can slap a Lien on your unit. Thanks, Jimmy Canuck:)

[johnnyk]

Jimmy, this is a problem in Thailand with condo ownership. Many feel they have paid for their unit and that's it. They don't understand that its also their investment and can go to heck in a hurry if things aren't kept up. Unfortunately the laws are weaker than in Canada and less enforceable to boot. Its worth remembering that Thais generally avoid confrontation and keeping face is hugely important (I'm sure your wife has impressed that on you!).
Chok dee.

[Johan]

In my old condo we had a "board" with all the names and room numbers of people who didn't paid. All thais and some of them with 25 000 bahts unpaid. The swimming pool was dirty, in the gym everything was broken,... i moved fast to another location.

A condominium it's like sharing a very big house with many people, some of them are good people, most of them are not.

My advice, stay away from condos.

[TypicallyTropical]

Here in Canada if you are a few months in arrears the Council can slap a Lien on your unit.

Thailand is way behind the times on this one. In the US the non-paying owner can be forbidden to use the common elements and the HOA can actually even foreclose on the non-paying owner.

[hhfarang]

Thailand is way behind the times on this one.

"...on this one."

[Nereus]

To answer the first part of your question: yes, you would be treading on thin ice if you were elected "Juristic Manager", as it is a legal position and involves legal administration, and it therefore "could" be classed as "work". On the other hand, as I have been told, you can be a member of the "committee" as you would just be giving your opinion as a "co-owner".

At the development that I am in in Bangkok, the original developer retained a block of units and a couple of shops, which he has rented out. He has NEVER paid ANY common fees on these units. He has been taken to Court numerous times concerning this, along with a couple of other tricks that he has pulled. Each time he walks away on an adjournment based on some technicality, and this has been going on for the last 10 years that I know of.

There are laws in place to control this type of behavior, but, like a lot of other things in Thailand, they are either not enforced, or their interpretation disputed.

There is always going to be some people that will not comply with regulations, especially when it involves their pocket. I think that it depends a lot just what "class" of owners you are dealing with. In the more up market developments you have a better chance of everybody contributing, than you would on some small scale "economy" development. But it does not rule out the type that think they are above everybody else, and just do as they please.

[Super Joe]

Jimmy, this is a problem in Thailand with condo ownership. Many feel they have paid for their unit and that's it. They don't understand that its also their investment and can go to heck in a hurry if things aren't kept up.

Agree, a few years back when times were better I looked at condos for a rental investment, as the yield's are competitive and liked the idea of a fully managed arrangement, but couldn't get passed the idea that it 'might' only be a 20-25 year investment. That's not to say it will need knocking down by then, but if neglected they would become very hard to sell, and rent/value devalues against what it should be. With a house you're guaranteed at least 30 years (lifetime with Usufruct or Superficies), and barring a pig farm opening in the street you're in control of it's condition and value.

The above is a pessimistic view, and the majority of the time I'm sure it'll be fine and you'll get 30 years plus, but I was put off by the lack of control you have over your own investment, there's too many variables for me that 'might/might not/could well happen...
- Thais don't even like daft things like servicing the car, changing the oil, repainting the house, so what chance investment in maintenance!?
- A fair few owners can be Thai investment buyers, and some farang landlords/2nd homers, so it's more of an earner than a 'home'.
- Thais, particularly the wealthy ones, like to move into the latest new chic building every 10-15 years, so buyer market is small.
- Thais don't like to buy 2nd hand cars/properties unless the price is stacked in their favour.

Apart from these differences in cultural attitudes I read about problems with people not paying the fees, not wanting to increase fees with inflation and an ageing building when review time comes around, and management companies connected in some way to a certain group. Then as the building starts to age there's the possibility that -- wealthy people start moving on to the new block on the block -- a low quality management company comes in replacing initial impressive one -- cracks start appearing due to natural ageing and/or lack of maintenance -- more people move out -- empty units are harder to sell -- low quality tenants come in as rents get lower -- blah blah blah.

You read that at a certain point the owners can vote to accept an offer from a developer for the land, and whether through a developer's 'influence' or not, if there's a dominant, persuasive group of Thai owners that want out, it'll probably happen soon enough. As I say pessimistic, worse-case scenarios maybe, there's posters on here who actually own them like Norm in Cha Am and Nereus in Bangkok I think, who are more than happy with their purchases, and good luck to them. I'm sure there is no right or wrong answer as to whether a condo or house is a better choice, but as long as you stay there longer than 13-15 years it should be a better investment than renting due to inflation.


SJ

[charlesh]

I was living in a housing estate Sth of HH. 1 Thai had not paid management fees for 4 years (60,000 Bht in arrears) The other 3 Thai owners were playing - I will pay 6 months later or catch me if you can. 1 even had the gaul to tell the Thai developer that as most houses were owned by farangs that they could pay the full amount and he wanted to pay 1/2 this despite the fact that he owned 2 houses on the site and a block of student flats.
1 of the Thais rang a TV station to get them to investigate the ILLEGAL use of companies for purchases on the site and the flying of foreign flags.
1 committee member was allegedly threatened with an accident by the military as he was a serving officer and had friends in the local camp.
Level playing field, justice, legal redress - forget it!

[wpcoe]

On another forum I read of a condo association whose bylaws included a penalty for being in arrears on monthly maintenance fees. They would turn off electricity (and water?) to the unit until the fees were paid. Apparently, as long as the proper process is followed to propose the rule and it's properly approved by the owners, it's perfectly legal.

That would probably not be effective if the unit were unoccupied, but if it were occupied, it's a great incentive to pay the monthly fee.

[Super Joe]

On another forum I read of a condo association whose bylaws included a penalty for being in arrears on monthly maintenance fees. They would turn off electricity (and water?) to the unit until the fees were paid. Apparently, as long as the proper process is followed to propose the rule and it's properly approved by the owners, it's perfectly legal.

That would probably not be effective if the unit were unoccupied, but if it were occupied, it's a great incentive to pay the monthly fee.

Also with housing developments that have official 'residents associations' (so I would assume the same applies to condos!?), the juristic person can record any fees you own at the land office and until you clear them they will prevent you from transferring, or recording any borrowing against the land title.

SJ

[TypicallyTropical]

Apart from these differences in cultural attitudes I read about problems with people not paying the fees, not wanting to increase fees with inflation.

The fees don't necessarily have to be increased with inflation. I live in a 144-unit condo complex and our monthly fees have been the same for the past five years. Fortunately, most of the owners live here or it's their vacation homes, so only a few units are rented and we don't allow vacation rentals. All the board members live here except one, and we constantly check on where can we cut the budget. We replaced our common area lights with solar lights; we replaced the sprinkler system with a drip irrigation system; we only water at night; we cut the trash collection from three times a week to two times a week; we set up bins for recyclables; we changed most of the landscape to less labor incentive plants; etc. All it takes is a caring board of directors to have the condo complex to be managed well.

[Nereus]

On another forum I read of a condo association whose bylaws included a penalty for being in arrears on monthly maintenance fees. They would turn off electricity (and water?) to the unit until the fees were paid. Apparently, as long as the proper process is followed to propose the rule and it's properly approved by the owners, it's perfectly legal.

That would probably not be effective if the unit were unoccupied, but if it were occupied, it's a great incentive to pay the monthly fee.

In the case that I have posted above, the Juristic tried turning off the water to the block of units owned by the developer. As all the units are rented out it only forced hardship on the people renting the units, and very nearly lead to a riot, (and rightly so in my opinion)

However, the developer was was forced into court after a few days, and within 5 minutes the court ordered the Juristic to immediately reconnect the water, and the developer walked out of court, with his police henchmen, laughing about it.

The electricity supply to all units is directly from the MEA, with each owner having his own meter and account. The Juristic cannot interfere with that. It may not be the case with all developments, but is so with the above.

You can have all the regulations that can be thought up, but when you are dealing with both, people that have no concern for anyone else, coupled with a questionable court and legal system, it all comes down to the owners involved.

I could write a long list concerning some of the crap that goes on, but it would quickly become very boring. The first thing that you have to accept is that; what is the rule in your own country has absolutely no relevance here. In addtion, as a Farang, you are at the bottom of the heap!

[Jimmy Canuck]

Apart from these differences in cultural attitudes I read about problems with people not paying the fees, not wanting to increase fees with inflation.

The fees don't necessarily have to be increased with inflation. I live in a 144-unit condo complex and our monthly fees have been the same for the past five years.

Thanks TT. Just to confirm, the 144 unit place is in Thailand, not Hawaii?

[Jimmy Canuck]

On another forum I read of a condo association whose bylaws included a penalty for being in arrears on monthly maintenance fees. They would turn off electricity (and water?) to the unit until the fees were paid....
I could write a long list concerning some of the crap that goes on, but it would quickly become very boring. The first thing that you have to accept is that; what is the rule in your own country has absolutely no relevance here. In addtion, as a Farang, you are at the bottom of the heap!

Thanks very much Nereus. Very discouraging though, as we have to commit in next day or 2 or back out of the purchase. I was wondering b4 I read ur post if a more upscale building (I think Samudra would qualify) might not have as many problems with irresponsible owners, and was glad to see you mention that possibility.
I would actually be interested to see a bit more of your "long list.. of the crap that goes on." Maybe a few of the more irritating things?
Input very helpful, appreciated! Jimmy:)

[Jimmy Canuck]

On another forum I read of a condo association whose bylaws included a penalty for being in arrears on monthly maintenance fees. They would turn off electricity (and water?) to the unit until the fees were paid.

Thank you WPCOE. That was encouraging news, but read another post bit further down says this maybe not always enforceable.. depending on how much influence you have i guess. Jimmy