Unregistered Condominium Projects in Thailand
In Thailand, the Condominium Act of B.E. 2522 (1979) provides for the registration of a condominium project. In order to register a condominium project, the developer must owned the land upon which the condominium project is situated. Once the project is registered, the Land Department official is able to issue title deeds for individual units in the project, which will originally be in the name of the developer, but may be changed once ownership of each unit is transferred to a buyer. However, it should be noted that certain condominium projects encountered in Thailand may be unregistered, that is to say, the project was not registered with the Land Department official and title deeds cannot be issued for the individual units. Despite how it may appear, unregistered condominium projects are not prohibited by law and, depending on one’s goals, may be a valid investment option. However, before one decides to purchase a unit in an unregistered condominium project, one should be mindful of certain important points:
- The reason why some condominium projects are unregistered is normally because the land upon which the project is situated is actually leased by the developer and not owned. Therefore, the developer is not able to register the project. Furthermore, since title deeds are not issued for individual units, the buyer of a unit only has a lease in the unit. Furthermore, the Civil and Commercial Code limits leases to a maximum 30 years, with an additional extension allowed thereafter.
- The regulations meant to protect consumers in the Condominium Act do not apply to unregistered condominium projects. Therefore, in an unregistered project, the condominium rules and regulations are completely subject to the lease agreement signed between the buyer of the unit and the owner of the project. In light of this, disputes that may arise between the purchaser of a unit in an unregistered condominium project and the project owner are completely subject to the terms of the contract. The protections of consumer protection law would not apply.
- Those who purchase a unit in an unregistered condominium project are subject to the 12.5% House and Land tax whereas owners of units in registered condominium projects are not subject that tax. Furthermore, the common fees for registered condominium projects are regulated by law, whereas the fees for unregistered condominium projects are subject to the terms of contract.
Condominium laws in Thailand are very complex. It is advised that foreign investors in Thailand consult with competent legal counsel before purchasing units in an unregistered condominium project.
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