Enviromental Movement

Thailand Property

The debate over the existence of global warming seems to be over. Now it is a question of what governments across the globe can do to reduce our environmental impact and bring our planet back from the brink. It is no great revelation to discover that property developments across the board have contributed significantly to the degradation of our natural ecosystem. In our need to cater to continuing demand for new properties, large tracts of forests have been removed over the years to make way for property developments.

Government Initiatives

In light of green awareness throughout the world, the Thai government is trying to balance this need for economic growth with environmental preservation. Ever since 1992, the National Environmental Quality Act has introduced the use of an Environmental Impact Assessment (EIA) for large property developments. Condominiums with more than 79 units and housing estates utilizing more than 100 rai of land or with more than 500 units require an EIA. This regulation has been met with some mixed success in the past, however, recently the government has taken a tougher stance on this issue and developers have been forced to comply or risk not being in compliance.

Buyer Beware

In fact, the Secretary General of the Office of Natural Resources and Environmental Policy and Planning (ONEP) recently made a statement that there have been several cases of unscrupulous condominium developers submitting plans with 79 units or under so they would not have to apply for an EIA. They would later divide these units into smaller portions and sell them off separately. The Secretary General has warned that such units, if discovered, will not be transferable at the Land Office as it has circumvented ONEP directives. This means that if you have bought one of these units before it was discovered, you may be prevented from selling it off at a later date. It is important, therefore, to check that the condominium unit you wish to purchase is in compliance with any ONEP rules before purchasing. This should now be a part of your standard due diligence checks on the property.

New Rules

Further to this, in December 2007, ONEP issued a new regulation which will now apply to all new property developments. This rule requires developers to plant a tree that is at least 5 meters in height and diameter for every air-conditioning unit between 12,000 to 24,000 British Thermal Units (BTU) depending on the ability of different trees in absorbing the carbon dioxide emission from the air. A guideline as to the type of tree suitable for this purpose is available from ONEP. This is designed to off-set the carbon emissions caused by air-conditioning units in a localized area.

The real estate industry calculates that such measures would increase the cost of property development by 2 to 6% as developers will need to acquire more land or reduce units to comply with this new rule. Analysts predict that these new rules will, however, not have much impact on housing estates as land is less of an issue. Condominiums, however, will face greater difficulty obtaining extra land to meet this requirement and may be forced to make changes to their project design. Nonetheless, many environmentalists believe this is a step in the right direction with property developers being forced to take urban planning into greater consideration.

Final Word

There are a few voices out there saying that all these environmental regulations are well intentioned but that Thailand is not ready to embrace it so readily. A few developers are saying that the rules are too strict and would only result in consumers absorbing the added costs. This may be true to some extent but Thailand has to start somewhere and beginning with property developments across the country is perhaps not a bad place to start.

Nevertheless, environmental awareness is not a new phenomenon in the country. It is in fact enshrined in the Thai Constitution. Section 79 of the Thai Constitution provides that:

The State shall promote and encourage public participation in the preservation, maintenance and balanced exploitation of natural resources and biological diversity and in the promotion, maintenance and protection of the quality of the environment in accordance with the persistent development principle as well as the control and elimination of pollution affecting public health, sanitary conditions, welfare and quality of life.

Thailand still has some way to go in embracing environmental progress. More perhaps could be done in regards to renewable energy resources and implementing tax breaks or providing grants to help put into practice more environmentally friendly projects. However, Thailand is well on its way and taking a tougher stand on these issues would mean better quality projects being built and less substandard construction which are harmful to the environment or even dangerous to occupants. It paves the way to create a quality committed industry that would inevitably improve its reputation on the international arena and therefore leading to, possibly, more profits.

Kert Stavorn
Kert Stavorn is a partner with Thailand's Largest Legal Network: Siam Legal International with offices in Bangkok and Phuket. Kert's practice primarily focuses on real estate, construction and corporate matters.
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