Samui land; Most developers not licensed, titles dodgy
Source; Bangkokpost July 24 2006
People interested in buying property on the resort island of Koh Samui have been warned they could end up with an illegal title, as only 10% of the property developers operating there are licensed. Sathorn Luangpatipat, president of the Surat Thani Consumer Protection Association, said information from the Koh Samui land office showed that as many as 90% of developers advertising property in magazines and on websites were not licensed to do business.
Mr Sathorn said the unauthorised developers include the people behind The Peak project, which was advertising 514 rai of land up for sale at prices up to eight million baht per rai. The land is on Khao Dang mountain in tambon Bo Phud. Illegal property development projects existed not only on Koh Samui but also on the mainland of Surat Thani province, he said.
Land authorities and local administration organisation officials should take action against all illegal developers. Charoen Chanparn, a Koh Samui land official, said his office had already begun closer scrutiny of every property development project on the island. Paitoon Lertkrai, a Surat Thani provincial land official, said that last year only one property developer, Choeng Mon Property Co, was registered to do business on Koh Samui.
As of May this year, another three developers were allowed to run property developments on Koh Samui.
Samui residents yesterday petitioned forestry officials to inspect two cases of encroachment on mangrove forests on the island. One is a reclamation in Phru Bang Rak mangrove forest in tambon Bo Phud. Forestry officials found that more than five rai of mangroves had been cut down to allow for a property development project. The other case is the reclamation of 30 rai of land in Phru Pa Long mangrove forest in tambon Taling Ngarm.
Officials found a two-storey house at the heart of the 93 rai of mangroves.
Sunthorn Wacharakuldilok, director of the Forestry Department's forest protection and suppression division, said the first case had already been proven to be illegal. The second case was still under examination.
After finishing the land reclamation, the encroachers were likely to try and claim land rights documents over the encroached land, said Mr Sunthorn. However, the mangroves were a protected public area and issuing land rights documents for part of the forest was prohibited. Praphan Poolsawat, a village headman in tambon Taling Ngarm, said that for 100 years Phru Pa Long had been Koh Samui's most abundant mangrove forest. It was a sanctuary and breeding ground for crabs and fish and many species of water birds, he said.
Source: Samui Community - 15 July 2006
the Interior Ministry has urged all provincial CEO's to keep an eye on attempts to divide big pieces of land up to smaller plots, so as to avoid having to apply for permission to run a property development business. The Ministry concern follows evidence of groups of people attempting to divide up land into smaller plots of less than 10 plots, with roads connecting to each of them and the layout of the main road suggesting that the site may later be transformed into development property. The Ministry has therefore declared that any land divided up into smaller plots together with road connections, amounting less than 10 smaller plots of similar size will be count as development property and will require owners to apply for permission to manage the property.
Those who fail to comply with the rules will be punished. The ministry has also sent officers to check whether there has been any attempt to advertise development properties that have not yet gained permission from the Ministry to be developed and sold, or not sold, as development property. The ministry will pursue those who break the law.
It is expected that Samui's property business will be affected by this new regulation. However, considering what we have lost, half of the island, it is time for us all to rethink and reorganize the whole property development business, as the government up to now has failed to control these dealings. As a result, Samui inevitably suffers environmental problems; some consumers have been taken advantage of; and investors get away with avoiding paying tax.
The limits and boundaries
Source: Samui Community newspaper - 15 August 2006
Over the last month, the Department of Natural Recourses and Environment have begun closely examining land acquisitions on Samui, particularly those involving foreign investors .
Land plots issued with certificates of possession or Sor Kor 1, are now being investigated around the island. And as this report went to press, the authorities had already discovered over 100 Rai at the top of the Duang Kok Mountain improperly granted with the Sor Kor 1 certificates, and around 10 Rai of illegally acquired land in other areas.
Further investigations found several other plots within protected areas where roads have been cut without permission from the local authorities and land has already been divided up into small plots, ready to be sold and transformed into holiday villas.
Most foreign investors purchase property via a Thai limited company, and this practice is yet to be fully investigated . For now, it is the acquisition of the right to possess land, and the actual certificates issued that are under heavy scrutiny. Apart from edging into protected forest areas, many developers have also encroached onto royal reserves.
One such property on the northern coast of Samui, for example, which is now worth up to 15 billion baht, has already been transformed into holiday villas and sold off to foreigner customers,
On 14 th July, an inspection team led by Khun Yongyut Tiyapairat, the head of the Natural Resources and Environment Department visited Samui following allegations of encroachment in the Kao Dang forest reserve area. Yongyut has since setup a co-ordination office on the island so as to facilitate checks on land ownership throughout Samui. Suratthani's vice CEO, Khun Thawatchai Turdpaothai, will also form a special team to run a thorough check on land certificates, especially those which are believed to have encroached onto reserved areas.
Using an Arial map of the island, it was found that a total of 29,811 plots have been issued with land title deeds; an area of 47,182 Rai (18,872,800 sqm), another 6,233 plots have been issued with certificates of possession, while 94,718 are reserved for public use. Khun Yongyut vowed to bring all those involved in encroachment to justice.
'I personally despise investors, foreign investors in particular, who inconsiderately purchase the land, develop it and move to another piece of land with absolutely regards to nature, ' he said. ?These investors are not only possessing and earning huge benefits from the property in their possession, but they never give anything back to this country. Instead, they take the profits from within the Kingdom back to their home country, this has deep impact on the Thai economy and the country as a whole' . Said Yongyut.
Most properties have been bought and sold several times before ending up with their current owners. However, it is the present owners of the land who bear the risk of being charged either with illegal possession or encroachment into the reserved areas . There have been several complaints about unlawful acquisition of properties on Samui's hillsides, with are both forest and watershed areas. Some of these plots have already been granted title deeds while the rest are still in the process of acquiring one from Samui's land department.
Having received all the information on current land encroachment and its effects, Suratthani CEO, Khun Vijit Vichaisarn, has divided the task of inspection between the Samui District Office and independent bodies who will jointly run a thorough check on the acquisition of ownership certificates. The team will focus not only on the land titles, but also on properties, as many have been sold without official permission from the authorities.
The team will focus specially on foreigners' purchase through a company,' said Deputy CEO Khun Thawatchai. Adding that many development projects run by foreigner investors have been sold without ownership clearance. This, he said, will result in many buyers facing legal problems as the authorities intend to crack down on all such illegal activity.
Developers evade Thai law
Foreign firms juggle fine print to sidestep property regulations
Foreign land developers have resorted to a series of 'tactics' to circumvent Thai law and reap real estate windfalls on the resort island of Samui, say local businessmen.
Foreign investors started developing property on Samui about 10 years ago, but their activities have only intensified in the last few years, locals say. Projects initially involved building homes for tourists who wished to settle down on Samui. The development industry quickly grew, and soon large plots of land were being bought from locals and divided into plots for sale, a local developer said.
As land prices skyrocketed resulting from the tourist boom, large property development firms with huge investment funds stepped in, he said.
Since Thai law prohibits foreign entities from owning property, many foreign investors attempted to evade the law by setting up local entities with Thai nationals acting as proxies who would hold more than 51% of the company and its property assets without having true control.
Almost 90% of foreign investors doing business on Samui have resorted to such practices, the source said.
People involved in the property business also tried to evade taxes on land sales by creating legal arrangements to make the sales look like asset transfers between a company and its subsidiary so the seller and buyer would not be taxed, they said.
Meanwhile, a provincial land official said almost all property development firms had violated the Land Department's land-allocation regulations, which require land owners occupying more than 10 land plots to seek official permission.
The official said only five of more than 800 companies running real estate businesses on Samui had legally obtained department permission to occupy more than 10 land plots.
As the property business grew, and all beachfront land was occupied by hotels and resorts, investors turned to mountain and forest land. Investors are also keen on developing less popular beachfront land at Bo Phut and hilly property near Chaweng and Lamai beaches.
Rapid growth of the land development business has raised concerns among local businessmen, who fear this could damage tourism as the natural environment is degraded and freshwater runs short.An adviser to Samui municipality said the local administration did not have legal tools to limit expansion of land development, except for building design control measures under Samui's city planning law, which came into force on July 25.
He said land use conflicts on Samui will get more complicated as tourists switch from the tsunami-hit beaches and resorts on the Andaman Sea coast. ''I think Samui will change a lot from now on,'' he said. ''If the situation continues like this, native people will sell their last pieces of land and leave Samui.''