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New condo law resolves past issues faced by residents and developers alike

source: Bangkok Post Nov 24 2008 The Condominium Act No.4 (B.E. 2551), which took effect on July 4 this year, aims to solve condominium management problems and increase consumer protection as most of the complaints in the past were related to juristic persons, juristic-person regulations, condominium managers, committees and even developers. The richer don’t always get it all: The ownership rights ratio in common assets will be calculated from unit areas instead of unit prices. Surasith Sahasthamrangsi, director of the Real Estate Business Promotion Office at the Land Department, said the new law would be able to solve such problems and consumers or condominium owners would stand to gain the most from it. Under the new law, developers need to include the following details when registering their properties: entrances and exits to public roads, numbers and sizes of private and common areas and their usage, and copies of sales brochures or any advertisements with details about common areas. The latter items are required because if the details in the brochures are inconsistent with the actual contracts, the ones that benefit buyers more will apply. ''In the past, there was no standard sales contract between developers and buyers as each developer wrote its own criteria. Under the new law, we'll have a standard contract and if the developers insist on using their own versions which do not benefit buyers as much, they will be invalid,'' said Mr Surasith. Changes in the new law also include the ownership rights ratio in common assets, which will be calculated from unit areas instead of unit prices as in the old law. The office of a condo juristic person which must be located in that condominium, acquired properties, buildings or systems related to security or internal environment and any asset that needs maintenance are additional common assets included in the new law. Rules regarding common expenses are also amended to be fairer to every unit owner. The new law specifies that the common expense rate shall be based on ownership rights and the project owner or developer needs to shoulder them for unsold units. In the past, a fine for late payments in some condominiums was exorbitant so the new law sets a standard fine for late payments of common expenses at less than 12% a year and less than 20% a year for late payments of longer than six months. The punishment for late payments that are six months or more overdue also includes a possible suspense of the rights to use common services, utilities and assets and the right to vote at an annual meeting. The foreign-ownership right is set at not over 49% of the total private area in each condominium. The new law also clearly specifies the qualifications, disqualifications and the grounds and a procedure for dismissal or demotion of a condo manager, an untouchable area in the past. For example, a co-owners' meeting can fire a manager with at least one-fourth of the total votes, in which case his replacement must be appointed within 30 days. The scope of duties of the manager is also enhanced. He must be responsible for providing security systems, preparing monthly accounts and suing any co-owner that has failed to pay common expenses for longer than six months. Committee qualifications are also identified under the new law. A committee meeting must be held at least once every six months to solve problems that have arisen in the meantime. A condominium juristic person must also prepare a balance sheet annually, detailing the number of assets and income-expense accounts being audited by an auditor. It must do an annual report as well, which needs to be kept for at least 10 years for possible examination. The new law also specifies punishments for ownership rights holders, co-owners, nominees for foreign owners, managers and chairmen of the committees who have violated the provisions under the law.

 

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