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CITY CONDOMINIUMS
Developers take regulations hit
source: The Nation April 7, 2008
Transfer of properties held up as builders await construction and EIA licences
Nearly 50 city condominium projects with about 5,000 units, slated to be ready
in the first half of this year, will not be able to transfer the properties to
customers because most are awaiting the environment impact assessment (EIA) and
construction licences.
A Bangkok Metropolitan Administration source said a number of property
developers, who have constructed city condominiums under Article 39 (2) of the
Building Inspector Law, are in trouble because their projects have not got
approval after the EIA law was passed. Some of the projects were not given a
construction licence and have changed their project design.
Under Article 39 (2) of the Building Inspector Law, developers can go ahead with
construction without getting the construction licence and EIA approval. However,
they must get the necessary approvals after the construction is complete and
before handing over the property to the consumer.
According to a report by the Bangkok Metropolitan Administr-ation, 1,058
condominium projects, of a total 1,824 launched last year and in the first two
months of this year, have sought approval. Most of them are waiting for the EIA
licence before commencing construction.
However, the other 766 projects have gone ahead with construction under Article
39 (2). This could spell an added risk for those buying into these 766 projects
in case they do not get the EIA and construction licences.
A source said a Bangkok Metropolitan Administration investigation has revealed
that 50 under-construction projects, slated for completion in the first half of
this year, will be applying for EIA approval and a construction licence and will
have to await these before handing over the properties. That is expected to
affect up to 5,000 buyers.
Prinsiri and Plus Property have already confirmed that their projects are
pending delivery despite being ready because they have had to restrict the
projects due to the EIA and Building Inspector Law issues.
Three of Prinsiri's projects await EIA approval. They include the Pulse
Paholyothin 37, the Complete Narathiwas and Smart Condo@Rama II.
Plus Property's 11 Condo One projects are ready but cannot be transferred
because they do not conform to the clauses under the Building Inspector Law. The
company has had to restrict the projects and refund Bt400 million to its buyers,
which will adversely affect its revenue this year.
Meanwhile, several city condominium projects launched in the first two months of
this year will be applying for the EIA licence.
Major Development president and chief executive Suriyon Poonvoralaks said the
company has applied for an EIA licence for its new luxury condominium project,
Royce Private Residence at Sukhumvit 31. This project is being developed by its
subsidiary MJAI Development, a joint venture with AIG Global Real Estate
Investment.
"If the project does not get an EIA licence, we are ready to refund our
customers. However, we believe that our project will get the EIA licence because
our design follows guidelines laid down by the law," he said.
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