CAVEAT EMPTOR

How Can the Buyers Beware If They Are Not Aware?

by Mr. Ponthep Werachon
Thai Solicitor
Mrs.Darunee Werachon
Thai Solicitor & Accountant

WERACHON LAW OFFICE : 315/304, Moo 12 Theppasit Road (Soi 12) Nongprue,Banglamung, Pattaya City Chonburi 20260
Kingdom of Thailand Tel: (038) 304 084, (038) 251 533, Fax: (038) 304 027 Mobile: 081 423 4255, 089 889 6483, Website: www.thaisolicitor.com, e-mail: thai@werachonlawyers.com

The event of a Thai lady a couple years ago 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 a land and house in Pattaya, you have to beware more than other parts of the country. Some expats just close their eyes to recluse themselves from a reality. “It is my hibernation, don’t make thing so complicated”. Some lawyers may follow these naïve clients to enjoy their billings. However, all naïve clients will definitely come back to complaint their lawyers if they finally end up in a limbo

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 their hard earned money from for all their life. The average of expats have about 5-10 millions for their houses. It is not a big amount of money if you compare to Japanese investors 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 their country. Many economists become skeptical 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 foreigners to own land. Why do they still violate the law? The answer is that they are deeply in love with Thailand and Thai people. Most of them have Thai families with children who mostly become very famous in our country. What they invest in Thailand is not only money but the family value.

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 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?.

2) 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.

3) 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 restriction 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.

4) 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.

5) If you want to buy a piece of land and finished or second hand house, 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 cheque payable to the owner whose name appears in the land title deed (Cha Nod). The photocopy of bank draft or cashier cheque 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 cheque 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 Baan) 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.

6) Even you make or not make a money 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 habitation 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.

7) After concluding all points mentioned above, you will enter into a Sales 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 cheque payable to the owner who cannot deny the liabilities under the contract upon collection of money.

8) After concluding all above mentioned points, you should enter into the Sales Agreement. There are many standard forms of contract purposed by many developers or real estate brokers in Pattaya. It is advisable to ask for the standard contract drafted by the Office of the Consumers Protection which is  clear and fair.

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 !”.

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