THAI LAW -Real Estate Juristic person
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| Thai law |
Thai law | Many foreigners come
to Thailand to set up a property business. The aim is to buy pieces of land and
subdivide it to build houses for sale to customers both Thai and foreigners. If
the land is divided into more than 9 plots, a licence is required from the Land
Dept. . Many owners choose not to do
this and find ways around this process. Some project owners only apply for a
licence after building is complete. To
enable transfer of the land and house to the buyer a licence is then necessary.
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| Thailand law |
In such a project,
there will be ‘common property’. i.e. swimming pool, roads, clubhouse etc.
These properties have to be transferred to the co-owners. A meeting will be arranged between the
co-owners in order to elect a juristic person to be registered at the Land
Dept. All the common property will then
be transferred to him/her. Any money
that has been reserved for the maintenance of this property is also transferred
to the juristic person. This enables the
proper maintenance of the common property.
One of the advantages of this is that the co-owners will not wish to
make a profit from this therefore the fees charged to individual owners will be
lower.
Under Thai law, if
common property is not transferred to the juristic person, then there is a case
to be answered.
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| Thai law |
If the common
property remains under the name of the developer, then the situation is fraught
with problems. The developer will ask
the co-owners for money to maintain the common property. This will be charged at a level he chooses
and is subject to increase when he sees fit.
Because the co-owners have no control, the developer may not use the
money for the intended purpose, does not pay bills due and generally does not
fulfill his responsibility. He may also
offer to sell the common property to the co-owners which is also wrong.
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| Thai law |
Assuming the
developer has a real estate license, the co-owners can elect a juristic person
and then take him/her to court to force
the transfer of the common property to the juristic person. If the developer
does not have the real estate license then the problem cannot be solved this
way. The co-owners will then have to take the developer to court charging
him/her with fraud if the developer in his advertising had promised to provide
facilities such as a swimming pool. If this is the case then a juristic person
cannot be elected and will be necessary to set up a company owned by the co-owners
as shareholders and to allow the transfer of the common property into the
company name.
THAI LAW -Real Estate Juristic person
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