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Latest Legal Property Advice

Here is the latest information on legal requirements for the sale and purchase of property in the Chonburi area. We manage all aspects of the transactions on behalf of clients with the help of experienced lawyers. This information is provided for those with some previous experience who wish to be aware of recent developments and requirements in advance. In every case, we look after all our clients’ interests.

• Condominiums can be either available in a foreign name (provided they are either already in a foreign name or the building is below 49% foreign ownership) or they must be put in a Thai name or a company name (our lawyers can advise on all the details for company ownership).
• Houses (or more precisely the land they sit on) can only be bought in a Thai name or company name (again our lawyers advise on all the details for company ownership).

For Condominiums in Foreign Name

(Buyer’s Requirements)

• a Tor Tor 3 for at least the minimum government estimated value of the condo
• two copies of his/her passport with signatures in blue ink
• two copies of his/her current visa with signatures in blue ink
• his/her portion of the transfer fees in cash (if applicable)
• his/her remaining balance of the purchase amount in cashier’s cheque or cash

(Seller’s Requirements)

• the original copy of the title deed (chenoud)
• two copies of his/her passport with signatures in blue ink
• two copies of his/her current visa with signatures in blue ink
• his/her portion of the transfer fees in cash (if applicable)
• document from the condo showing that the foreign ownership is under 49% in the building
• document from the condo showing that all maintenance fees have been paid to date

For Properties Being Sold into a NEW Company

(Buyer’s Requirements)

• a new Thai registered company with at least one copy of the company papers, signed and stamped, plus original company stamp
• two copies of his/her passport with signatures in blue ink
• two copies of his/her current visa with signatures in blue ink
• his/her portion of the transfer fees in cash (if applicable)
• prepared company minutes with a document showing that all shareholders are allowing this purchase to take place
• remaining balance of the purchase amount in cashier’s cheque or cash

(Seller’s Requirements)

• if it’s being sold from a previous company as opposed to a Thai national, at least one copy of the company papers, signed and stamped, plus original stamp
• two copies of his/her passport with signatures in blue ink
• two copies of his/her current visa with signatures in blue ink
• his/her portion of the transfer fees in cash (if applicable)
• prepared company minutes with a document showing that all shareholders are allowing this purchase to take place
• if a condo, a document from the condo showing that the foreign ownership is under 49% in the building
• if a condo, a document from the condo showing that all maintenance fees have been paid up to date

For Properties Being sold where there is an existing company owning the property

(Buyer’s and Seller’s Requirements)

• the land office is not involved as the requirement is simply to change the name(s) of the Managing Directors of the company. This can be achieved very easily by our lawyers

The above is for guidance only and all property transactions require expert individual attention as in any country. For this reason, we use experienced lawyers to protect our client’s interests. Please refer to the ‘Legal Services’ section on our website for a list of all our legal services:

– company formation
– visas (‘B’ type, retirement, travel etc.)
– litigation
– powers of attorney
– notary public services
– accounting services
– income tax filing
– tax planning
– VAT registration
– work permits
– retirement planning
– school fees
– insurance

This is not an exhaustive list and over the years we have assisted clients with all manner of legal matters. Our ‘Useful Information’ section also offers more general information but we recommend you contact us for full details.

October, 2011

PATTAYA/JOMTIEN BAY

THE SECOND COMING OF SOUTH JOMTIEN

Much property focus over the past few years has been on the once-dubbed ‘Beverly Hills of Pattaya’ – Pratumnak. While the area offers some fantastic projects, both new and old, developers seems to be spreading their wings and finally exploring the southern-end of Jomtien Beach.

I always found it quite strange that, although Jomtien has been a busy town for as long as I can remember, there was a real shortage of condo buildings once you rounded the corner from Thappraya onto Jomtien Beach Road. The main focus has always seemed to be from Thepprasit to the police box, which now encompasses an incredible array of tall white monoliths. But once you rounded that corner, after Jomtien Plaza, the only high-rise condos between here and Soi Chaiyapruek (over three kilometres down the road) were Thepthip (which is quite old) on Jomtien Soi 7, and the complex of Jomtien Beach Condo’s 5 buildings near Soi 9, also almost twenty years old. View Talay 8 has now bridged the gap a bit and there is also a new project slated for development next to Panchalae Condo. But the real happenings seem to be even further south, well past Soi Chaiyapruek.

Reflections Condo is a superb development just past Soi 19 which is well under construction and has really raised to bar in terms of quality of finish for the Jomtien area. They offer excellent payment terms (70% on completion and transfer), unique designs and some interesting room layouts.

I guess some other developers have caught wind of this area’s increasing popularity because the newly pre-launched Cetus Condo (from the same developer as the very successful Apus Condo in Pattaya) is located around Soi 17, and, from the size of the land, Lumpini is developing what looks to be a massive condo project just before Metro Jomtien. I’ve heard units here will start at under 1 million Baht (not bad for beachfront!).

Even further down, two very large projects are slated next to La Royale which will be comprised of low-rise units as well as beachfront towers (they’re yet to be officially launched, so I’ll hold back on naming the developers here). This is a very nice area that has been begging to be developed. The nice thing down there is that there is no road separating the projects from the beach and you don’t need to jump on Sukhumvit to access them as you do with the many condos in Baan Amphur & Najomtien.

Investor Tip: It’s interesting how times have changed. Several years ago we couldn’t give away condos this far down the beach. Metro Jomtien has always been the most affordable beachfront building in the area, but the biggest objection I’d almost always get was that it’s just too far south. There are still some units in Metro with superb seaviews for under 40,000 THB per sqm. The building has recently had the swimming pool, tennis courts, gym and squash court refinished, and the lobby, hallways and elevators are tapped for refinishing this year. Trust me, once these other projects down here get underway, Metro prices will rise dramatically, so now’s the time to get in here.

Being Foreclosed Upon and Still Making Money?

I’ve read a couple of articles recently about the massive amount of foreclosed properties in the States and what’s becoming of them. Many properties, particularly in poorer areas, are simply being demolished and the areas are being rezoned for factories or commercial properties. Others are being sold at auction to the few liquid investors left for as low as 10% of what was paid for them 10 years ago.

One interesting thing has been happening: some properties that have been foreclosed upon are being sold for more money than what’s due to their lender.

I couldn’t imagine having my property foreclosed upon – I think for 99% of people you’d simply write it off and just assume that any money you’d put into it was gone forever. But there are actually hundreds of millions of dollars being held by the clerks at circuit courts in the States that are due to the people who were foreclosed upon. The trouble is, most people aren’t aware that they’re due back this money and have now moved elsewhere in the country and cannot be contacted. One particular person in the Chicago area is owed $460,000! It’s nice to hear some good news coming out of such an awful situation.

EQUITY RELEASE A GOOD OPTION

Equity release can be a good way to finance a property abroad. It can be quite difficult to obtain financing anywhere and Thailand is no exception. Equity release allows you to get a loan in Thailand based on equity (property) you hold typically in your home country. This may sound like ‘robbing Peter to pay Paul’, and to some degree it is, but second mortgages and equity release can be an excellent way to increase your investment portfolio and make some good profit in the process.

One very big bonus with equity release is that the interest rates are typically very low. One recent loan for a client was approved at 3.5% over 10 years! Try getting a bank mortgage at that rate. Another bonus is that the loan can be paid out in a variety of currencies from US dollars, Sterling, Yen, Baht, you name it and you can probably get it.

The application process is quite straightforward and fast – you’ll usually get an answer on the amount of the loan, rates and terms within two weeks.

Not a day passes when we’re not asked, ‘Can foreigners get financing through a bank in Thailand?’ It sounds like an easy enough question to answer, yet there are typically so many conditions and restrictions involved that the answer usually comes out as ‘…well, sort of…’

The easy answer is ‘yes’, foreigners can obtain financing through some banking institutes in Thailand, though unless you have an established credit line, some sizeable local assets or a Thai wife with a solid credit rating (and a nice land-bank wouldn’t hurt, either), your chances are greatly reduced. All major banks have slightly different rules, but the following criteria are quite typical:

Foreigners are eligible for a mortgage of 70% of the bank’s value of the property (only 60% for condos) if:
– they are working in Thailand (with a work permit and have been working a couple of years)
– they have a solid income, provable by bank statements, tax receipts, etc.
– it helps if they have any title deeds here or overseas as collateral
– it also helps if they have a provable income overseas
– they must be under 60 years old

Foreigners must also provide the following documents:

• Passport or local ID if Thai
• Household registration if Thai
• Work permit if working here and foreign
• Marriage certificate / divorce certificate
• Letter of consent from spouse
• Copy of Chanote
• Completed application form
• Valuation report and sales contract
• Letter of introduction from existing bank if self employed
• Shareholder list if self employed
• Audited accounts for business for last 3 years
• Employers letter if employed stating length of service, salary, bonus etc.
• Bank statements for last 6 months of the business if self employed
• Bank statements of the individual for the last 6 months

Amazingly, Thai nationals can apply for a mortgage based of up to 95% of the value of new properties (80% for re-sales), so if you’re married to a Thai, it’s much easier and you can borrow more – just beware the obvious pitfalls.

As most foreigners seeking financing in Thailand cannot provide some or most of the documentation, one alternative many seek is private financing through a developer. Of course, this limits the buyer to purchasing a new property as most private re-sale sellers are not in a financial position to provide private financing.

Most developers offer finance options that continue during the course of the building development with final payment due upon completion. With houses, this period is obviously a lot shorter than that of a large condominium project. Most new houses are built within 9 months, meaning you have only 9 months to complete payment, whereas many large condominium buildings take up to three or four years to complete, giving buyers ample time come up with the funds.

One reason that the View Talay projects have been so attractive to investment buyers, beyond the low prices and good location, is the payment plan. With a very minimal down payment, buyers pay about 20,000 THB monthly (for a studio unit) for the first 18 months or so and pay the bulk payment upon completion. For investors looking to ‘flip’ the property prior to transfer, this is incredibly attractive. Other local developers have promptly followed suit and are reaping the rewards. Companies such as the Nova Group, Vistas, Major Development, Matrix and Raimon Land have all had great success with bulk payments of 50% or more upon building completion.

SELLER DO’S AND DON’TS – MAKING SURE YOU’RE NOT SELLING YOURSELF SHORT

Don’t try the hard sell

Strange as it sounds, leaving your home during showings is one of the best ways to help it sell. No one knows your home better than you, but that doesn’t mean you should stick around to show it to buyers. Most experienced real estate agents would advise sellers to leave their home when it’s being shown to prospective buyers or renters.
Buyers need to critically examine a property before they can decide to buy it or not. It’s difficult for most buyers to talk frankly with their agent about a listing if the seller is home. Showing off your cabinets probably won’t get the house sold, and it could keep the buyers from looking at the qualities of the home that are particular to their need. An agent knows what their client is looking for and will highlight those features, so leave the showing to them.

Don’t ignore offers that don’t meet your asking price

By not countering even low offers, you could easily discourage what may ultimately be a good offer. Pride can all too easily enter the picture and silence can simply be viewed as a person that is not easily negotiated with. As much as I’ve hated making some low offers in the past, I’ve always encouraged the seller to counter with something, even if it’s a pittance of a drop.

Do provide easy access for showings

Selling your home is all about getting buyers through the door, so don’t make any aspect of the process hard on home hunters. Unclutter your property so you can be ready for a showing at a moment’s notice, and make your home available to buyers and agents for as much time as possible each day. Providing keys to your agent(s) if possible is undoubtably the best way to have your property show as often as possible. Many buyers want to view properties immediately, so having the keys on-hand with the agent will make your property one of the first to spring to their minds.

Do have a clear understanding of the selling process

Familiarize yourself with the typical marketing time in your area, what to expect with a home inspection and any hot-button items that could be of concern. Also, be familiar with the contract process, deposit escrows and closing time frames.

Don’t list your property with every agent in town

With most sellers, I advise they list their property for sale with multiple agents. Not having a proper Multiple Listings Service (MLS) in the area makes it more difficult to get the instant exposure to other agents and possible buyers that you’d have in the west. Having said this, hedge your bets with three or four major agencies, not every show in town. Listing with too many agents gets everything confused. Different prices get listed, keys get shuffled around, people leave air-cons on, the property get shown multiple times to the same client, etc, etc. Believe me, you’re much better off listing the property with three or four reputable agents who have good marketing exposure.

Do make sure your agent will have a strong online presence

The majority of home hunters begin their search on the Internet and then narrow down which ones to actually visit. This is particularly true of people buying property overseas such as Thailand.