How Can Buyers Beware If  They Are Not Aware
By Porthep Werachon

The event of a Thai lady who smashed up her defective car in front of TV cameras sparked the public awareness that abusive sellers should no more enjoy the old maxim of CAVEAT EMPTOR. A sledge hammer seems to be the icon of justice which should be done thought the heaven should fall. Many Thai ladies who have had defective husbands, solved the problem with two choices for her defective husbands, -either “Amputation” or “Castration”. It is a real dilemma for their husbands.

Many expats in Pattaya are agnostic of law and justice. Some expats even have misconception of lawlessness in Pattaya. If you are children, sailors and drunken men, god may give you enough protection. What about a serious man like you” You may seek protection only from the power of knowledge from this article.

To buy land and a house in Pattaya, you have to beware more than in other parts of the country. Some expats just close their eyes to reality, a kind of reclusive ness. “It is my hibernation, don’t make everything so complicated”. Some lawyers may follow these na”ve clients and just enjoy their billings. However, all na”ve clients will definitely come back to complain to their lawyers if they finally end up in a fiasco.

The Office of Consumers Protection is criticized as a paper tiger even they are trying to take out the red tape around their bureaucracy. Thank to the sledge hammer of the Thai lady.

Businessmen should understand that expats in Pattaya come to enjoy their retirement with money earned and collected for all their lives. The average expat has about 5-10 million for their house purchase. It is not a big amount of money if you compare to Japanese who invest in Lam Chabang. However, you may see that most Japanese investors enjoy their tax privileges under either the Board of Investment (BOI) or Industrial Estate Authority of Thailand (IEAT). They are exempted from tax for many years and most of profits are repatriated to the metropolis. Many economists become skeptical about what Thailand will get from this kind of investment except salaries of cheap labor. What will be the profit of Thailand to be Detroit of the East while we lose our soul. We may not retrieve the environments. If we have 1,000 expats coming for retirement in Pattaya, how much the government will earn. Most of Japanese investors have one-stop visa for 5 years. How about retirees in Pattaya”

Under the Land Code of Thailand, it is illegal for expats to own land. Why do they still violate the law” The answer is that they are infatuated with Thailand and Thai people. Most of them have Thai families with offspring who mostly become celebrities in our country. I have never seen any expat client having expat wife who wants to own property in Thailand.

Expats in Pattaya may think that they are desperados without protection from either god or government. What you need is the awareness for the following knowledge:-

1)     If you want to buy a land and house for your family but the construction of the house is yet started or finished, you may negotiate with the developer to transfer the empty plot of land to you first. It is risky to pay installments of many millions until the house is finished. As you are well aware, every thing in this world is impermanent. If the developer becomes bankrupt or the project becomes under a

2)     non performing loan (NPL), you may still have the land or partial construction of the house. The contract for construction of the house can be separated from the land. There are many engineering points you may discuss directly with the developer. In our professional experience, we came across many developers who may respond to your demand. Every businessman including myself like to work with expats. “Even Farangs are demanding, but they pay very well”. Can anybody deny this fact.

3)     The land you will buy should be under the first class title deed (Cha Nod) which is very accurate with GPS. The second class title deed is a Certificate of Utilization (Nor. Sor. 3 Kor). It is advisable to avoid buying a land under other title documents.

4)      If  you buy the empty plot of land as mentioned above, you should check the zoning of the area whether there is any legal restriction on a construction of a building. Some areas impose restrictions for separation of land for development project. If you are serious, you may check with the Civil Works Office of Chonburi City Hall. With the photocopies of the land title deed (Cha Nod) and location map of the land, they can answer you in writing.

5)      If  you buy the empty plot of land, you should verify if the seller has already separated the title deed (Cha Nod) or Certificate of Utilization (Nor.Sor.3 Kor) for you. If the seller cannot separate the land, you will have to put your company or your lady as the co-owner with the others. Please ensure that there is a map with land location and scale of your part attached to the land title deed for registration of ownership. We found some buyers buy the land without exit from their lands. The professional surveyor should be retained for the accuracy.

6)      If  you want to buy a land and house which are finished or second hand, your risk may be minimal. However, you should try to avoid a deposit or make the deposit with the lowest amount as you can. If you do not make the deposit, you just make the appointment with the seller to have a reciprocal transaction at Banglamung Land Office whereby the money and land tile deed will be exchanged. The payment should be made by a bank draft or cashier check payable to the owner whose name appears in the land title deed (Cha Nod). The photocopy of bank draft or cashier check should be sent or faxed to the seller at least 1/2 days in advance for verification. In the Land Office, the bank draft or cashier check should be handed over to the seller in presence of the registrar upon completion of transfer whereby the mistake will be zero. How about the house” You have to ask for a Household Register Book (Tabien Ban) and check whether the house is erected on the land. Many buyers have only land not house. The construction permit and blue prints should be also asked from the owner.

7)      Even you make or not make the deposit, you should retain a qualified lawyer to have the title search. You ask the photocopy of title deed (Cha Nod) from the agent or owner. Just say “Pom Tong Kan Cha Nod Tee Din Krub”. The good faith agent or owner should be willing to provide you with the documents you require. With the photocopies, the lawyer can verify the name of the owner, lien, encumbrance on the land, i.e., mortgage, right of redemption, servitude, lease or right of habitaion or even government plan of appropriation. The area and location can be checked by a surveyor including zoning. There are many expats coming to see us to complaint that once they entered into the house after the transfer has been complete, they still find a group of people enjoying party in their houses. If these people have the lease or right of habitation, you may not ask the police to take them

out of the house. It is a civil case whereby you will have to go to court to sue them             for eviction. This situation is very rampant for the buy of second hand houses.

8)      After concluding all points mentioned above, you will enter into a Buy and Sale Agreement. In this stage, most of the buyers will deal with real estate brokers. The real estate broker will receive commission from the owners not the buyers. If you deal directly with the owner, you may negotiate with the owner for terms and conditions of the contract. However, it is not easy to find the owner who may communicate with you fluently in English. It is the reason why the real estate brokers play the import role. If you sign the Buy and Sale Contract with other person not the owner, you should ask them for a power of attorney. It is advisable to make a payment by a bank draft or cashier checque payable to the owner who cannot deny the liabilities under the contract upon collection of money.

9)      After concluding all above mentioned points, you should enter into a Buy and Sale Agreement. There are many standard forms of contract purposed by many developers or real estate brokers in Pattaya. The contract can be in English and Thai for your understanding. The contract should be clear and fair with the following issues :-

–          Who will be the contractual parties”  The parties should be you and the

owner. If the real estate broker acts on behalf of the owner, you have to    check the power of attorney. The buyer can be even either the expat    like you or your company or your lady. Even the expat cannot own the       land but he can sign the contract to buy the land and house. If the owner is            a company, you should check all corporate documents. The     photocopies of ID card, passport and corporate documents should be         attached to the contract.

–          What are the details of land and house” The details in the land title deed (Cha Nod) or Certificate of Utilization (Nor.Sor.3 Kor) should be attached.

–          What is the total price” The price should be the total price for the land and house including the common infrastructure of the project.

–          Who will pay taxes and transfer fees” It can be either the seller or equally shared by the parties.

–          What will be the deposit” The deposit should be lowest as much as you can negotiate. The payment of deposit can be made on the signing date of the contract.

–          How will the payment be made” The payment should be made by either a cashier checque or bank draft payable to the owner whose name appears in the title document. You may send the photocopies of the cashier checque or bank draft to the owner to verify with the issuing bank. There is no reason for the good faith owner not to accept the cashier checque or bank draft.

–          What will be the deadline for transfer or payment of installment” You should ensure that you can comply with the deadline.

–          What will be the penalty for breach of contract” If you are in breach of contract, the seller may forfeit the deposit you made not other damages. On the contrary, if the owner or seller is in breach of contract, the total deposit must be returned to you plus the penalty for damages equaling to the amount of deposit. However, you still have the right to alternatively seek the injunction of the court to enforce the transfer.

–          Many developers in Bangkok can provide you with a bank guarantee for the deposit you make, and having the escrow agent to keep the title documents

for you. However, we have never seen these protective mechanisms in      Pattaya.

–          What will be the common infrastructure” You should discuss with the developer or other owners about the common infrastructures the developer has to provide, e.g., street, water system, electricity, common recreational areas and security system. If the project does not have a license for development, the village (Moo Ban) will not have a status of  Community Committee which is a juristic person. You should ensure that the community will share the same concept of environment and surrounding. You pay many millions not just for the house but also the surrounding for your family.

–          What will be the corrective measure if you cannot promptly occupy and utilize the land and house after the transfer” We may mention in the contract that the owner or seller will have to solve this problem otherwise the seller will have to be responsible for damages with the daily penalty until eviction. It is advisable to check the house with the owner before the transfer. You can even lock the key of the house.

10)   It is advisable to retain the independent engineer to check the house before the transfer to find out whether the house is defective or the quality does not comply with the specification or standard. If  you have made the installments for the house and the developer or contractor notifies you to make the final payment for the transfer with the Land Office, you may notify to the Land Office that you are ready for the transfer but you want the developer to rectify the defect first. In this connection, you have to make a cashier checque or bank draft for the final payment and produce the photocopies to the registrar and request for the attachment or blockage of this land and house. The cashier checque or bank draft can be kept with the Trustee of the Judgment Execution Office of  Pattaya Court. You may also make a report to Pattaya Police Station. If you do accordingly, you will not be default or in breach of contract. To prove that the developer has commitment as you were verbally informed by the sale staff, you may keep all brochures and correspondent or even advertising documents of the developer.

If you buy a defective house, you will be unhappy until the last day of your life. It is not advisable to burn it down in front of TV cameras to protest the developer because you will probably go to jail for “arson”.

How about Thai wives who deal with their defective husbands by either “Amputation” or “Castration”” Will they go to jail”  They may establish many alleviating circumstance to the judge and will be definitely granted probation to stay out of  jail. Can we say “CAVEAT  HUSBAND” or “Let the Husband Beware !”.