Condo proposal in dispute
published : 20 Oct 2014 at 06:00
newspaper section: Business
writer: Kanana Katharangsiporn
Property management firms have voiced disagreement with the Legal Execution Department's proposed amendment allowing condo transfers before common area expenses are settled, a move aimed at addressing forced sales of condos.
Vivat Sricharoenwong, president of the Property Management Association of Thailand, said the amendment would add a new expense for prosecution or legal disputes to a condo's juristic person, the legally registered owner of the condo.
"If the department grants buyers of non-performing assets (NPAs) such as condos a unit transfer before the common area expenses are settled, the juristic person will have to sue the previous owner," Mr Vivat said.
He said this would add a new expense for co-owners of the condo project, as juristic persons in general had not set a budget for possible legal disputes.
The department last Friday met to discuss the amendment to regulations that do not allow condo transfers if the common area expenses for a unit are not settled.
Representatives from the Lands Department, the Lawyers Council of Thailand, the National Debtor Center of Thailand, banks and property management firms attended the meeting.
The Lands Department said condominium ownership could be transferred only if it was certified debt-free.
Ruenvadee Suwanmongkol, director-general of the Legal Execution Department, said this made condo NPAs unattractive to buyers, who often refused to get a unit transfer if they learned of an additional expense to be paid.
"In many cases, unpaid common area expenses are higher than a condo's appraised price," she said, adding that such expenses were the debtor's responsibility, not the new owner's.
As of July, the department held 14,287 condo NPAs worth 62.2 billion baht. A large number of them are weighed down by high common area expenses, as these eventually rise when a condo cannot be sold.
At Friday's meeting, a representative from Bangkok Bank supported the department's plan to amend the law, saying the amendment should cover low-rise juristic persons as well.