Legal Structure

In Thailand, a foreigner may own a condominium 100 percent in his/her own name. Freehold title for the condominium purchase is the most secure method of ownership for the foreigner. If the project is over the 49 percent quota for foreigners, you may need to draft a lease contract for your transaction. In Hua Hin we do not find this problem since Thai owners are the majority in most condominium projects.

Legal & Financial Planning

Before you sign any deposit agreement or contract, you should sit down with a lawyer or solicitor to discuss the legal process. You need to know the correct legal process in Thailand for the foreigner to purchase a condominium. Remember that you are spending part of your life savings to acquire this property and you must carefully plan your steps in the process. Some banks will offer up to 70 percent financing to foreigners for purchasing a condominium. The repayment term can be as high as 20 years. Siam Legal offers free legal consultation to potential property buyers. You should get the legal facts of the property and contract laws in Thailand before you deposit any money.

Title Investigation

A comprehensive examination of title deed recorded at the Land Department should be done. You need to verify that the Seller has clear and legal title of the land before you enter into a contractual agreement. The title search will trace the land to its first possession. Don’t take the word of anyone who tells you it has been checked before. The lawyer conducting the title investigation will provide you a full report and a copy of the title deed in English language.

Due Diligence

Every financial transaction requires some sort of due diligence on behalf of the purchaser to verify that it is a sound investment. When you purchase shares of a company listed in stock market or a mutual fund you will generally research the profile and performance of the company or fund. The same is true when you purchase a property from a developer. You should check with the previous buyers to see if they are satisfied with the quality and time frame of construction. If you don’t have the time to spend on checking the history of the developer, a local lawyer near the development will know or can check the project, its directors and their reputation.

Deposit

When you feel satisfied with the property and it meets your expectations, you will be asked to make a deposit to show your good faith to continue the process. In return, the Seller will reserve the unit for you and start the process by drafting the contracts for purchase. Unless you write specifically a “get-out” clause in the deposit agreement, for example “subject to clear title” or “subject to agreement on the contract terms,” the money deposited is non-refundable.

Construction Contract

There are some fundamental elements which should be included in every contract. These are, among others:

1.Time frame

An agreement should have a time frame which stipulates clearly the starting date for construction as well as its completion date. Check for any extension clauses which normally give the developer a few extra months to complete without incurring any penalties.

2.Payment Penalties

Check that the penalties for default of payment are not too burdensome on you. Terms such as immediate rescission of contract and retaining the money you have already paid are not uncommon but there should be a period given to you to remedy this default.

3.Developer’s Default

Ensure that you have some recourse to a full refund in the event that the developer does not complete the construction due to insolvency or for any other reason.

4.Late Completion

Penalties should be given to you if the completion is late. This is normally deducted from the final payment due upon completion. Penalty rates vary greatly in Thailand although for condominiums there is a daily minimum penalty of 0.01 of the property’s value was made available to foreigners who did not qualify for a local loan. This gave many foreigners access to finance for their dream homes even if they did not reside in Thailand. Up until this time, there were only a handful of private offshore firms offering lines of credit of this kind and often at rather stringent and unattractive terms.

Bangkok Bank in Singapore still offers such loans to foreigners and the demand for this is increasing. They are able to tender loans in several currencies including US and Singapore Dollars (SGD). Currently, the interest rate for SGD loan stands at 6.00 for USD and 6.00% for SGD. However, it appears their processing fee may be slightly higher but offers the advantage of applying for the loan locally in Thailand without having to set foot in Singapore. UOB’s entrance into this niche market is a welcoming sign to the area of financing to foreigners in Thailand.

“Flipping”

Many investors target a condo project when the development first launches. They are keen to purchase the plum units in the project as an investment. Later, the investor will resale or “flip” the unit typically before the legal interest is registered at the Land Department. The value of the unit increases prior to the completion or title transfer. These investors will capture their profits without their names ever appearing on the title deeds. Care and caution should be exercised if you are “flipping” the unit since some developers will not allow assignment of the unit to another person. Some developers will allow this option but they will charge a very high administrative fee or even a percentage penalty.

Summary

Living in Thailand should be an enjoyable and relaxing experience. If you plan and prepare in advance for the acquisition of your property, you will be rewarded for your efforts. Those who take short cuts in the recommended process above will save some money but in the end it will not be worth it if something goes wrong. Property is a solid investment in Thailand as well as a great place to live while enjoying life in paradise.
Thailand Property & Real Estate Legal Services - Attorneys - Solicitors

By: Dennis Ramm

Article Source: http://www.articlesnatch.com

About the Author:
http://www.siam-legal.com/realestate/thailand-property.php

By: Wantanee Khamkongkaew

By: carlbroom

Bangkok is a dream city to enjoy fabulous lifestyle. You can buy Bangkok apartment as an investment. The property law of Bangkok will not allow anyone to make an investment in land so best option is Bangkok apartment. Once you have made investment in it you can provide your apartment as a serviced apartment to tourist on rent so you can get income. Real Estate investment has only that potential which will return you high profit so investment in Bangkok apartment will be a great opportunity for you.

Investors are making great profit from Bangkok apartment as they can avoid paying transfer tax before transferring the apartment from developer. So you can also make a large profit from Bangkok apartment investment

.

There are so many foreign developers as well as Thai developers who construct Bangkok apartments to attract the investors who are voluntarily absent from Bangkok. The main advantage of investing in Bangkok apartment is you can buy, Renovate and can sell at high profit. Usually a typical Bangkok apartment consist two or three bedrooms.

Big luxurious four bedroom apartments are also available but better option is that buy a small range apartment as an investment. Other popular way of investment is buy old apartment and renovate it. After renovation you can sell it a great price. If you invest in off-plan projects then it will also beneficial for you. You cant see the building if you invested in off-Plan projects but main advantage is developers are giving great discount on off-plan deal.

If you are going to visit Bangkok then it will be better to stay in Bangkok serviced apartment instead of hotels as it will make law cost against traditional hotels. Bangkok serviced apartments offers fully furnished rooms, fully equipped kitchen, 24 hours security, Special dining rooms and also laundry services. So if you stay in Bangkok apartment you will feel that youre at home. You can use internet or real estate agents to get best accommodation. You can also compare rates.

If you need amenities like swimming pool, garden, shopping malls nearer to your apartment then real estate agent can help you a lot. Some Bangkok apartments offer mini marts so you can easily grab snacks for you anytime. Some offers salons where every lady can enjoy by making different hair styles. So due to these reasons guest friendly apartments are very popular in Bangkok. Because of great deal of interest by worldwide if anyone wants to make an investment then he/she needs to book it in advance else one may miss the boat.

Article Source: http://www.articlesnatch.com

The legal way for a foreigner to own real estate in Thailand is to buy a condominium unit(s) (“Condo Unit”). This was proposed in my last article on foreign land ownership. In Bangkok, Condo Unit purchases are now considered trendy among the younger generation of Thais as Condominiums are conveniently located in the inner city area and it is more economical to commute.

TIP

Whether you are going to buy a Condo Unit to reside or for investment purposes, I would like to walk you through the following due diligence steps:

(1) If you can narrow down your choices of Condo Units to 1 or 2 Condo Units, a physical inspection must be conducted by an expert or civil engineer on the Condo Unit and the condominium building. Are they as according to the promises made by the seller ? Checks should be conducted for water leakage in the Condo Unit, proper and safe electricity supply, adequate car parking spaces allocated, fire exits, correct building materials used.

(2) What is payable by an owner of the Condo Unit for up keeping e.g. common facilities fees, water charges, electricity charges. Who should they be paid to and how much are they? Find these out from the owner of the Condo Unit.

(3) If (1) and (2) above are satisfactory to you, request from the owner of the Condo Unit a copy of the Condo Unit Title Deed. Take this to the local district or Amphur Land Office and counter check with the original Title Deed kept there on: (a) Who is the owner of the Condo Unit ? This owner should be the person whom you are dealing with and signing the contract to sell you the Condo Unit. If the owner is a company limited, who can sign on behalf of this company ? Does the company limited have enough capital to complete building the condominium ? The answers to these questions can be obtained from the incorporation records of the company limited at the Ministry of Commerce; (b) Is the condominium building registered at the Land Office ?; and (c) Does the original Title Deed reveal any registered encumbrances, lease, mortgage or charges ?

(4) Have a lawyer peruse the conditions of the Reservation Contract or To Sell and To Buy Condo Unit Contract prior to signing it. Legally speaking, this Contract does not create any property rights for you yet because the Condo Unit ownership title will transfer to you at a later date. This Contract is binding only on the promises of both the seller and you that ownership title transfer and sale of Condo Unit will take place at the agreed upon later date. However, the risk exposure to you here is that, at the signing of this Contract, you are usually requested to place a deposit with the seller. If the seller does not sell and transfer ownership title of the Condo Unit to you at the agreed date, you will have to claim the seller in court for breach of Contract to get the deposit back. As a result, I do not recommend the signing of this type of Contract. You should make a 1 time payment of the whole purchase price at the sale and upon ownership title transfer of the Condo Unit to you. Alternatively, you could arrange for a neutral escrow agent to hold your money and hold the original Title Deed (Note: Under the new Escrow Business Law, effective on May 19, 2008, an authorized financial institution or commercial bank can provide escrow agent services).

(5) Clarify with the owner who is responsible for the ownership title transfer fee, income tax and specific business tax or stamp duties payable at the Land Office on the day of ownership title transfer. Unless agreed otherwise between the owner and you, you are only legally responsible for 50% of the ownership title transfer fee. Please note that the amounts payable here can be calculated for you by an official at the Land Office.

(6) Make sure that the owner have obtained from the Condominium Juristic Office the following: (a) A letter verifying that foreigners have ownership in condominium units not exceeding 49% of the total space of all units in the condominium building; and (b) A letter verifying that the owner has no outstanding debts owing to the Office.

(7) You have obtained the required bank document to verify that the purchase price for buying the Condo Unit was remitted into Thailand.

** Written by David Tan. David is a Lecturer of Business Law at Asian University and author of the book “A Primer of Thai Business Law”, available online at www.chulabook.com . In Bangkok, the book is available at all Kinokuniya and Asiabooks bookstores. Any questions or comments to David should be sent to blas.inter@yahoo.com

By  DAVID TAN

One of the main advantages that are offered by Bangkok real estate is the price arbitrage that can be availed of by investors in the property market in this South East Asian country. The prices of a Bangkok house for sale or a Bangkok condo is only a fraction of what it would cost to buy a similar property in developed economies. In some situations, you can get yourself a property in a new development that is being promoted by Thai businesses. The advantage in such a real estate transaction is that you may be able to get attractive discounts on the sale prices of properties in the Bangkok real estate market.

Foreign citizens who are interested in real estate investment Thailand have to be aware of the local property laws to profitably invest in the property market in this country. The laws governing the sale or transfer of property in Thailand are set up with the express purpose of protecting the interests of their citizens and also to prevent the inflationary pressures of an unregulated real estate market.

What this means for the international investors is that they have to get a thorough understanding of the Thai property laws with a special emphasis on the interests of foreigners in the property investment transactions. It may be good move to engage the services of Bangkok estate agents to advise you on the legal aspects of the property transactions in Thailand.

One of the safer ways to invest in Bangkok real estate is to set up a company in Thailand, as you would then be able to get over the restrictions imposed on foreigners to invest in the Thai real estate market. The Bangkok estate agents are perhaps the best point of contact that you – as a foreign individual investor – can entrust the task of engaging a lawyer to complete the necessary formalities to start a new company in Thailand as a precursor to your property investments in this country.

Thailand is a popular holiday destination and this is another reason why real estate in Thailand is favored by international investors. The tourism activity is at its peak in the city of Bangkok and this makes an investment in a Bangkok” target=”_blank”>www.fbprop.com/en/ListHotCakeResidential.aspx”>Bangkok house for sale even more profitable. You can also buy a Bangkok condo and use it

By Forbest

Rama IV set to become central business district – projects poised as available land dries up in other locations
Bangkok’s central business district seems set to spread along Rama IV Road as land for development becomes scarce on Sukhumvit, Silom and Sathorn roads. A growing number of property projects will be launched around Rama IV Road.

Plans by the Port Authority of Thailand to develop 223 rai of Klong Toei Port, near Rama IV Road, may be delayed by protests from street vendors, but property developers are pushing ahead with plans for both commercial and residential projects in the area worth several billion baht.

Another of the area’s big projects is also on hold. Central Pattana CEO Kobchai Chirathivat said his company’s plans for a multi-purpose complex, including a luxury hotel, an office building, serviced apartments and a department store on what is now the 127-rai Suan Lum Night Bazaar, had been delayed.

However, the company believes the Crown Property Bureau, owner of the land and which signed a long-lease contract with Central Pattana in 2007, will deliver the plot to the company later this year or early next. Central Pattana expects to begin construction on the Bt10-billion project next year, for completion in 2011, Kobchai said.

Agency for Real Estate Affairs managing director Wasan Kongchan said Rama IV Road was a potential location for a new business district because a number of property developers were investing in the location. Land prices in the Rama IV Road area have increased from Bt300,000 a square wah in 2006 to between Bt500,000 and Bt600,000 this year.

CB Richard Ellis Thailand managing director Aliwassa Pathnadabutr said Rama IV Road was likely to be a new centre for office buildings because land on Silom and Sathorn roads was now fully occupied.

Rama IV Road also has a subway service that makes it comfortable for transportation, and office rents in the area have risen to between Bt700 and Bt800 per square metre per month, she said.

Earlier, the Port Authority of Thailand (PAT) announced plans to develop 223 rai of Klong Toei Port as a mixed-use project costing several billion baht. Street vendors have protested against the plan, and it now faces delays.

The PAT’s plan is to separate the area into four zones.

The first, covering 17 rai near its head office, will be for maritime business offices.

The second, covering 54 rai opposite the Customs Department, will be a logistics and distribution centre.

The third zone, covering 137 rai from the present bus terminal to Klong Toei Market, will be a community and shopping centre.

The fourth zone, covering 15 rai currently occupied by warehouses, will be an area for office buildings.
If the projects of Central Pattana and the PAT both proceed as planned, Rama IV Road will become Bangkok’s new central business district, property experts say.

Research by Colliers International shows 67 per cent of tenants at serviced apartments in the Sukhumvit area now stay an average of only three to seven days, at a daily rate of Bt1,000 to Bt2,000 a night for grade-B serviced apartments and Bt2,000 to Bt3,000 for grade A. Five-star hotels usually charge Bt4,000 to Bt5,000 a night.

Seventeen per cent of serviced-apartment tenants stay more than a year, and the remaining 16 per cent stay one to three months.

Risinee said average rental prices for both grade-A and grade-B serviced apartments in the Sukhumvit area were now lower than luxury and four-star hotels. Consequently, serviced apartments are developing their services to compete directly with such establishment

http://www.thailandrealestatemagazine.com/bangkok/rama-iv-bangkoks-future-development
By Somluck Srimalee
July 3, 2009

Whizdom

Magnolia Quality Development Corporation (MQDC), a property subsidiary of the agribusiness giant Charoen Pokphand Group (CP), yesterday launched a condominium in Bangkok to capitalise on an anticipated industry recovery.

But a 2-billion-baht joint-venture project in Pattaya remains on hold, as the resort city’s investment climate has yet to recover from political turmoil in April.

The company has pledged to refund all sold units to customers. It will consider relaunching the project in 2010.

The shelved Pattaya project – through CPMQ, a joint venture with CP Land, another CP Group real estate subsidiary – is a 29-rai site with six seven-storey buildings and 792 units sized between 44 and 144 square metres and priced from 46,500 baht per sq m.

“The Bangkok property market has recovered but Pattaya has not,” said managing director Visit Malaisirirat. “Sentiment in Pattaya is much worse and unlikely to be back to normal until next year.”

MQDC launched the 500-million-baht Whizdom condominium in Bangkok after postponing the opening from the first quarter of the year.

The project, on 586 square wah on Sukhumvit Soi 64, has 79 units sized from 30.18 to 109 sq m and priced from 88,800 baht a sq m.

It is the first project the company has launched since mid-2008.

Purchasing power in the middle-priced housing segment remains strong despite the downturn, said Mr Visit.

The company is confident of closing sales within four months. It aims to attract buyers through a cash-back campaign giving 2%, 5% and 10% discounts on downpayments of 10%, 20% and 40% of the unit price, respectively.

MQDC will also offer nine versions of 27 room designs, which it claims is the largest-ever choice in the condominium market.

By the second half of the year the company plans to launch a single-housing project and a condominium, together worth about 2 billion baht, in the same areas as its existing projects on Bang Na-Trat Km 7 and on Sukhumvit near the extension line of the On Nut BTS station.

MQDC expects 700 million baht in revenue from sales of remaining units in its current projects. Last year it recorded about 1 billion baht, said Mr Visit.

http://www.bangkokpost.com/business/economics/19098/mqdc-launches-b500m-bangkok-condominium

By: KANANA KATHARANGSIPORN
Published: 25/06/2009 at 12:00 AM

The new property developer Quad Co Ltd, 40% owned by a Democrat MP, plans to draw investment from the Middle East to jointly develop a luxury mixed-use residential project worth 10 billion baht on Sathon Road by the fourth quarter of the year.

Buranaj Smutharaks (left), managing director of Quad Co, and Alan Lin, chairman of the property brokerage Harrison, examine a model of the Quad Silom condominium at a briefing yesterday. KITJA APICHONROJAREK

The fourth quarter should be an opportune time for a launch because from this month until the end of the year the economy should recover, helped by the government’s new stimulus packages, said Dr Buranaj Smutharaks.

The company is now in talks with undisclosed Middle East investors.

The new 77-storey building would be located on a four-rai site on Sathorn Soi 6 where the Sorento restaurant now sits.

The plot is owned by Yaowarat Nirundorn, a major shareholder of Quad.

Established in mid-2008 with registered capital of 180 million baht, the company’s investors include Dr Buranaj holding 40%; Sekchai Hongpan, who has experience in property management from Chicha Village, holding 30%; Ms Yaowarat holding 20%; and the rest by Patchara Jiaravanon, the wife of former Thai Rak Thai MP Wattana Muangsook.

“As both an MP and businessman, I’m not worried about that. I declared my shares in this company to the National Counter Corruption Commission and the company is not involved in government projects or concessions,” said Dr Buranaj, the managing director.

The company launched its first property project yesterday, the Quad Silom condominium worth 540 million baht.

Construction should be complete by mid-2010. Bank of Ayudhya is supporting with a credit line of 120 million baht.

The project will be located on a 274-square-wah lot on Narathiwat Ratchanakharin Soi 3 near the Chong Nonsi BTS station. It will have an eight-storey building with 74 units starting from 39 square metres and priced between 3.9 million and 12 million baht or 109,000 to 140,000 baht per sq metre on average. Currently 30% of the units are sold, and it expects to close sales within six months.

“We bought the plot from Bangkok Asset Management when the Democrat party was the opposition,” said the 44- year-old MP.

Besides Quad Co Ltd, Dr Buranaj has another property business called Trinity Assets Co Ltd, which has been the owner and property manager of Trinity Silom Hotel, Trinity Apartments and Trinity Mall on Soi Lalai Sap in the Silom area for 20 years.

Trinity Assets, owned by his wife’s Churdboonchart family, plans to set up a freehold property fund worth 850 million baht named Trinity, in which the family will hold 33%, by the third quarter with One Asset Management and Nomura as financial advisers.

The first asset in the property fund will be the 104-room Trinity Silom Hotel, now named Grow Hotel after the company signed a hotel management contract with the US-based hotel chain Grow last Thursday. Guaranteed yields will be 8% per year in three years.

“Rental assets need lots of funds for renovations and it’s more difficult to ask for loans from banks so my family decided to have a property fund. We want international management,” said Trinity Assets’ executive director Orranart Churdboonchart.

The company is filing to the Securities and Exchange Commission.

Next year, the company will put the 200-room Trinity Apartments and 200 of the 400 booths in Trinity Mall into the fund, she added.

http://www.bangkokpost.com/business/economics/18988/quad-seeks-petrodollars-for-projects

Quad seeks petrodollars for projects
By: KANANA KATHARANGSIPORN
Published: 23/06/2009 at 12:00 AM

It depends on each developer to choose whether tactic is the right one for their consumers. But it is quite possible that the middle to low market will be more expanded. Logically, the 1 million baht condominium can be sold at the cost around 920,000 – 950,000 baht while the 1.2 million baht townhouse can be sold at the cost around 1.1 million baht.

At present, BoI housing market is the biggest market in the real estate industry which belongs to 60-70% of the country population. It has been forecasted that in the near future there are going to be a lot more market penetration from the small and medium real estate developer firms as well as some of the market leaders.

Preuksa Real Estate, the country’s second-largest developer and housing market leader, is the only listed developer to fit requirements for BoI homes in Zone 1 or Greater Bangkok.

Developers now qualify for a tax reduction through the Board of Investment (BoI) by building at least 50 housing units (townhouses or detached houses) with a minimum size of 70 square metres (up from 31 sq m) and a maximum price of 1.2 million baht (up from 600,000 baht). Apartments must be at least 28 sq m and priced no more than 1 million baht.

Preuksa will benefit due to its greater readiness of capital and in units on hand and in the pipeline priced less than 1.2 million baht. The company expects its percentage of BoI homes to jump from 12% to 30% this year.

PS expects at least 10,000 units worth about 11 billion baht - three billion from new launches - that fit BoI’s requirements, said chief operating officer Prasert Taedullayasatit.

“The property market in the second half will be more active [than the first half] while homebuyers will choose from a greater variety of products with more quality, better prices and locations,” he said.

PS is planning new strategies in response to the new requirements. It expects to gain about 600-700 million baht from BoI incentives, which it may use in campaigns and promotions.

Listed developers MK Real Estate Plc (MK) and Property Perfect Plc (PF)agreed that Preuksa will benefit most from the change in BoI’s policy.

MK marketing manager Tunya Siripuchaka said PS will gain most from BoI’s new requirements as they target housing units built by prefabrication,PS’s construction technique.

“It’s quite risky on margin [to tap this market] with traditional construction techniques,” she said.”It also depends on land plot and location.”

MK’s products are outside the scope of BoI support as its units are priced higher than 2 million baht. But it plans to launch townhouses priced from 1.9 to 2 million baht in the next quarter.

“[Other developers] should let PS go through in this segment,” said PF chief executive Chainid N. Sirimanee.

“Definitely no for us. We will neither play in this segment nor develop brands as we have no expertise. Our prefab construction just started,” he said.

But N.C. Housing Plc (NCH) is considering new products and brands for BoI’s new house requirements.

NCH’s managing director Somchao Tantaterdtham said the company will select locations and estimate development costs but is concerned about this segment’s access to home loan.

L.P.N. Development Plc’s chief executive Tikhamporn Plengsrisuk said new BoI home requirements will give homebuyers in the lower-priced segment a chance to live in better products in urban areas.

“We cannot say at the moment that our products can enter the new BoI home requirements,” he said.

LPN’s condominiums sized from 30 sq m fit the space requirements, but most of its sites are priced higher than 50,000 baht per sq m.

http://www.bangkokpost.com/business/economics/18564/preuksa-to-gain-from-boi-rule-change-prefab-technique-nets-bulk-of-tax-cuts

Preuksa to gain from BoI rule change
Source - Bangkok Post (Eng)
June 16, 2009
By KANANA KATHARANGSIPORN