I will today and during the next days comment on Pattaya Times Drew Noyes letter to Prime Minister Yingluck Shinawatra on Updating Laws Affecting Foreigners.In his letter Drew Noyes discussed several interesting issues. Today I will comment on the first issue raised by Mr. Noyes that is to say (1) the repealing of the current limit that restrict foreigners to own more than 49% of a condominium building.
Not limiting foreign ownership of condominiums
Firstly this issue is not such a big problem as it seems because in most cities in Thailand foreigners rarely made up more than 15% of the total owner of a condominium building. But it is true that this issue is a problem in cities like Pattaya, Phuket and Koh Samui where foreign buyers are somewhat more actives than Thai buyers. The problem with the issue raised by Mr. Noyes is that the purpose of this limit comes from the fact that the condominium owns land and that give foreign buyer’s more than 49% ownership rights in a condominium property would give them indirect control of the land creating a precedent that Thai authorities are not ready to grant because of political reasons.
In July 2009 I proposed in one of my post on this blog a solution which while not perfect could help to solve this issue. Basically what I proposed was as follows:
Beginning of Quote: “A simple solution to this problem would be to allow foreign purchasers to buy units beyond the 49 percent quota, providing they agree to have their Common Property co-ownership rights suspended or freezed for a temporary period (as long as the unit is above quota).
If a foreign buyer was to purchase a condominium unit in excess of the foreign quota, said buyer could be requested by the competent officer to sign prior to the transfer of the unit a Letter of Affirmation at the Land Department. The content of the letter could be for example as follows:
Pre-Purchase Letter of Affirmation
For Foreign Buyers Purchasing Condominium Units in Excess of 49% Ratio of Foreign Ownership
Date _________ Month_________ Year_________
I, Mr./Mrs./Ms._______________ and Mr./Mrs./Ms._____________________ ,
the foreign Buyer of the Condominium Unit No.____________, Floor____________,
Condominium Name___________________ , Soi_____________________, Street/Road________________________, District_________________,
Province ________________, do hereby confirm that I/we have been notified by a competent officer that the abovementioned condominium unit is being sold and transferred in excess of the 49% ratio of foreign ownership in this building and I/we understand and accept that, as a result of this sale, the exercise of the rights attached to the ratio of Common Property ownership in the aforementioned condominium unit shall be suspended for as long as the condominium unit I/we purchased is in excess of the maximum foreign ownership ratio set forth in Section 19 bis. I/We understand that I/we shall not have any rights of co-ownership of the Common Property and shall not be allowed to exercise the right to vote associated with our ratio of Common Property co-ownership and that I/we shall furthermore not be allowed to become a member of the Juristic Person Committee or hold any other rights resulting from our share of co-ownership of the Common Property for as long as our condominium unit is in excess of the aforementioned maximum ratio.
I/We further understand and agree that while the exercise of my/our rights are suspended I/we shall still be bound to exercise the resulting duties attached to our co-ownership of the Common Property ratio such as, but not limited to, payment of the annual common management fees, obey the Juristic Person rules and regulations and so on…
In addition, mention would be made on the Condominium Title stipulating that this unit is transferred in excess to the maximum foreign ratio and that the right of a share of the co-ownership of the Common Property is suspended and without effects for as long as this unit is in excess of the quota. Of course, a few articles of the Condominium Act would also have to be modified if such a change was to be introduced.
In this way, foreign buyers could be allowed to purchase condominium units in excess of the current maximum limitations on foreign ownership without taking a majority control of the Common Property that includes the land owned by the Co-Owners, as their rights of Co-Ownership of the Common Property would have been suspended as well as their rights to participate to the management of the juristic person.” End of Quote
I was also mentioning in this post that my solution was far from perfect and you can refer to the original post to read my comments on the pitfalls of the proposed solution. Of course the end of the quota would be preferable but i think that we should offer to Thai authorities an alternative to the simple suppression of this quota because if we dont the chance of a refusal are too big You can read the original post by Clicking Here
Originally posted 2012-02-14 20:46:32.