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Condo law could lead to more complaints

Monday, 29 September 2008

source: Bangkok Post MONDAY Sept 29 2008 Transfer rule change may spur speculation Complaints about condominium projects are expected to rise due to a flaw in the amended Condominium Act that has been in effect since July 4, according to Atip Bijanonda, president of the Thai Condominium Association. Atip: ‘‘Two different standards’’ "Those who bought units after the new law took effect and those who bought before are holding two different standards of contracts," said Mr Atip. For example, the previous act states that buyers who wish to transfer a unit contract to a non-relative must pay a fee while the new law allows them to do so without a charge. He anticipated such loopholes could encourage price speculation similar to what happened before the 1997 economic crisis. The new law also clarifies that developers are responsible for the monthly common-area fees for unsold units, while developers building projects under the previous law might not have to pay the fees. The law is now being corrected and when it is finished, a different standard would again result and could cause more difficulties, said Mr Atip, who is also the deputy managing director of the listed developer Supalai Plc. He is calling for government agencies including the Land Department and the Consumer Protection Board to work together and set one standard. Complaints about condo quality are generally fewer than for low-rise residential projects, as condo developers normally use large contractors who deliver quality. "As a result of the new act, the different standard will lead to unfair privileges for [new] buyers. We will see an increase in complaints from consumers," he said, adding that the Consumer Protection Board should be prepared to receive as many as 7,000 complaints. Around 2,000 to 3,000 condo units are sold each month in the country. According to the Consumer Protection Board, complaints filed about condominiums rose from 259 cases in 2005 to 432 last year due to the rapid growth in the number of high-rise projects. There were 264 complaints about condominiums filed between October last year and June this year. Most related to unfinished projects, followed by complaints about the juristic body not taking responsibility for building management. Complaints about property totalled 1,901 cases or 45.15% of the 4,210 cases filed to the board over the period. In order to reduce the number of unfinished projects that could result from credit problems, Mr Atip also suggested there should be a warning system for banks as to whether they should approve loans for developers if there are many similar projects located in the same area. He also suggested the board provide a checklist to help consumers. IT should cover the construction permit, common area, green area, and include questions that should be asked before buyers signing any contracts. "Buyers should bear in mind that having an argument with a developer before buying is better than quarreling with one after losing one's money," Mr Atip added.

 

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