Thai Property Real Estate Related Articles

Samui Developers previous checklist

How long has the developer been developing properties in Thailand? Recent investigations showed that almost all developers in Samui advertising property in magazines and on websites were not licensed and evade the law by setting up local companies with Thai nationals acting as nominees. Is the whole project supported by a Thai Bank? Who is financing the whole project? Developments in Samui usually start after the foreign purchasers have paid deposits and pay in advance for the project as it continues. In fact the purchasers finance the project and take all the risks What is the developer's registered share capital? Note: Any deposit will be unsecured and the developer enjoys limited liability i.e., limited to the remaining unpaid amount, if any, of the par values of their shares. Which for many Samui 'Developers' mean a share capital less than 5 million, where a responsible developer could have a share capital exceeding 100 million Please confirm the zoning restrictions and regulations under City planning Act for that area. Note: A provincial land official said recently that almost all property development firms in Samui had violated the Land Department's land allocation. Please confirm that Co. Ltd has complied with the requirements under the Land Allocation Act or obtained a Housing Development License (required if the project exceeds 9 plots) Note: Foreign purchasers may discover that their homes were constructed without planning permission. Local developers are able to get round the City Planning Act and Land Allocation rules and because of corruption and poor law enforcement by the local government. Don't rely on the fact that some laws are selectively enforced (you cannot trust the local government) Please confirm that Co . Ltd has obtained an Environmental Impact Assessment approval report. Note: This permit is generally required for developments exceeding 10 plots and/or depends on the land development area/size based on the Ministerial Regulations issued under the Enhancement and Conservation of National Environment Quality Act Please confirm that Co. Ltd has obtained permission to develop the land and has obtained Building Permits Please confirm there will be a separate Sale and Purchase Agreement for the house and ownership will be registered in the name of the purchaser at the relevant authority. Please suuply a copy of the Sale Agreement. Note: The structures on the land should be registered and owned in the name of the foreigner, NOT leased together with the land from the Developer (note under 10) Please supply a copy of the Lease Agreement. Who will be the lessor during the lease period Note: Lease is a personal right. Contractual obligations are binding on the first lessor only, not the successors. Should the lessor transfer the land during the term all contratcual option obligations in the lease become unenforceable. If any, please indicate what services will be provided.If any, how much is the monthly or yearly maintenance/ service fee in the project? Note: How will this be calculated? Does this decision rests with the house/ plot owners? Or does this rests with the developer? Beware, some developers see service and maintenance fees as a continuing income from the development and without proper protection they could charge you absurd maintenance costs in the future. Is the land connected to the main utilities such as water and electricity? Note: Who will you have to pay for electric, water etc..? Is this the developer or management company who controls the access and distributes the utilities to the separate houses for a much higher unit price than the official government price (not advisable) How many houses are being built in the Project and could the view be blocked by new construction? Which construction company has been contracted to build the houses? Note: Has the construction company provided a warranty for the quality of the materials and standard of workmanship? How long is the warranty period? Is there a warranty for the structural integrity of the build? One major problem in Samui is the poor quality of the build. Which architectural company has been appointed to design the houses? Can the purchaser instruct an independent building surveyor to inspect the build upon completion? How many houses in the project have been sold? Will the developer take care of the proper registration of the house and the house registration booklet (Tabian Baan) with the relevant government departments? Note: House registration book/ Tabian Baan is under Thai law an official document identifying the house. It is not necessary to have the name of the owner in the house book. Has the land been registered with the Koh Samui Land Department? Please supply a copy of the title document for the land. Note: Is there a separate Title Deed? Is the land subdivided accorcing to the rules? In samui developments are often unlicensed or even planned on protected forest land. Is the land free from all encumbrances, mortgages, charges and other liens? What is the history of the Title Deed? Is there any doubt on the status of the land? How long have the previous owner(s) held title over the land? Is anyone in occupation on the land? What is the registered value for the property and the total size of the land? Please confirm that there is a registered (servitude/ municipal/ public road) access to the land. Note: This is not a road laid on land owned by the developer. Some developers leave the access road under a separate land title deed they own so they control the access and as the owner they could charge you in perpetuity for the use of their land (which could include the laying through his land of water-pipes, drainage pipes, electric wires or similar installations for use of the adjoining land). This is why some developments consist out of 8 'villa plots' and 1 'road title deed' (the keep the total plots under 10 to circumvent section 4 of the Land Allocation Act). Please confirm that the Seller will be responsible for payment of withholding tax and business tax on the transfer date or the lease registration fees. Note: Will the value at which the land lease will be declared reflect the actual price as reflected in the contract or, to avoid taxes on sales, a price close to the government minimum assessed value of the land as held by the Land Office. What's the payment schedule? How much deposit is payable? Note: Will these payments be secured? Meaning are the payments paid into an escrow account or do the purchasers pre-pay the whole development and are you at the mercy of the (would-be) developer who enjoys often very limited liability. Bankruptcy and Civil Court search and investigation at the Ministry of Commerce. Can the purchaser assign the purchase to a third party before the house is completed? I have read through the answers provided above and confirm that the facts stated are true and correct. I understand that if any of the statements or facts given above are false then an action for misrepresentation lies against me and I will be liable to pay compensation to the purchaser. Signed……………………………………………………………….(The Seller). Note; Sellers are sales people, do not fully trust their answers and have an independ lawyer review the documents and their answers)