You are using an outdated browser and your browsing experience will not be optimal. Please update to the latest version of Microsoft Edge, Google Chrome or Mozilla Firefox. Install Microsoft Edge

July 7, 2017

Condominium Disputes: Concerns for Joint Owners

Subscribe to Updates
Bangkok Post, Corporate Counsellor Column

Condominiums have long been one of the most popular properties for people living in Thailand’s big cities. The different units in a condominium are individually owned, while common properties, such as lobby areas or swimming pools, are jointly owned by the owners of individual condominium units.

Unfortunately, disputes among joint owners (the owners of units in the building of each condominium) or between joint owners and the condominium juristic person are sometimes unavoidable. Therefore, it is prudent for joint owners to know and understand laws and regulations related to common condominium disputes.

Exemption of Court Filing Fees in Consumer Cases

Cases between condominium joint owners and a property developer or a condominium juristic person are regarded as consumer cases. Where joint owners sue property developers for breach of contract in delivering incomplete or defective units, the joint owners (considered to be consumers) are exempt from court filing fees according to the Thai Consumer Case Procedure Act B.E. 2551 (2008).

If condominium juristic persons sue joint owners for unpaid expenses from providing common services and maintaining/managing common property (normally known as “common fees”), the condominium juristic persons may sometimes argue that they should be exempt from paying court filing fees as well, since they are not property developers.

Under the Thai Consumer Case Procedure Act, only consumers or persons assigned to file a claim on their behalf are exempt from court filing fees. Condominium juristic persons are considered by the Appellate Court to be business operators and service providers rather than consumers because they are paid a common fee to maintain the condominium building and common property for joint owners. Thus, condominium juristic persons filing claims against joint owners will be required to pay court fees.

It should also be noted that claims for common fees must be filed by the condominium juristic person within five years from the default date.

Debt Clearance Certificate

Under the Thai Condominium Law, joint owners must jointly pay common fees. Previously, condominium juristic persons could refuse to issue a debt clearance certificate for joint owners failing to pay such fees. This would prevent them from registering title transfers with the local Land Office, which requires a debt clearance certificate for the transfer of condominium unit titles. Without the issuance of this certificate, buyers purchasing units via public auction would then have to shoulder the unfair burden of paying outstanding common fees in order to complete the registration of title transfer.

Section 309 quarter was added to the Civil Procedure Code on November 16, 2015, to provide better protection for buyers of condominium units by public auction. Under this section, debt clearance certificates are no longer required for the sale of units by public auction.

Before the sale of any unit by public auction, the executing officer will notify the condominium juristic person to report any outstanding common fees within 30 days from the date of receiving the notice. After the sale, the officer must set aside proceeds from the sale to pay for any outstanding fees to the condominium juristic person (which will have priority before the mortgage creditor).

A competent officer will then register the title transfer for the buyer without requiring a debt clearance certificate. Buyers from public auction therefore no longer have to be responsible for unpaid common fees.

Common Fees

Another critical concern for condominium joint owners involves situations where the condominium juristic person cuts electricity or water, or refuses to hand over key cards to force payment of common fees.

Thailand’s Supreme Court has held that condominium juristic persons can only compel joint owners to pay unpaid common fees by filing a claim with the court. Since joint owners maintain ownership over their personal property and share ownership with the juristic person over the common property in the condominium, they have a right to use the common property. The juristic person cannot obstruct joint owners’ use of common property to compel payment of common fees, and courts will likely view these tactics as wrongful acts against joint owners.

Furthermore, the Thai Supreme Court has ruled that a previous regulation issued to exempt property developers from paying the common fees of unsold units is void, and developers must be responsible for paying the common fees for the units that have not been sold.

There are many potential legal issues that may arise between condominium joint owners and juristic persons. Each party should ensure compliance with their respective duties to avoid potential disputes. Joint owners should learn and understand their rights and responsibilities and comply with the condominium bylaws and seek legal advice when disputes are unavoidable.

Download Full Article
Related Professionals

Practices

Dispute Resolution and Litigation

Real Estate

Location

RELATED INSIGHTS​ 

January 16, 2025
On January 13, 2025, Thailand’s cabinet approved in principle the draft Entertainment Complex Act, as proposed by the Ministry of Finance. This landmark legislative proposal, which would allow casinos as part of larger “entertainment complexes,” will now proceed through further parliamentary review and approval. Key provisions of the draft act are described below. Corporate structure: Entertainment complexes must be operated by Thai-registered limited companies or public limited companies with a minimum paid-up capital of THB 10 billion. Directors of the licensed entity must be individuals and have the qualifications and none of the prohibited characteristics specified in the draft act. The draft act does not impose restrictions on foreign-majority ownership structures; however, it is worth monitoring whether any amendments addressing this matter are introduced during the legislative process. Operating conditions: Each entertainment complex must be located in an area designated under a royal decree. It must also include at least four types of entertainment businesses listed in the annex to the draft act (e.g., shopping mall, hotel, sports stadium, amusement park), along with a casino. The allocation of casino space must comply with regulations to be specified at a later date. Licensing conditions: Licenses will be valid for 30 years, renewable in increments of up to 10 years. The license issuance fee is THB 5 billion, the annual fee is THB 1 billion, and the renewal fee is THB 5 billion. The Entertainment Complex Policy Committee, chaired by the prime minister, will review and approve applications. Online gambling restrictions: Licensees are prohibited from offering gambling through internet-connected systems or electronic devices that allow access from outside the casino premises. Labor requirements: Thai and foreign employee ratios must adhere to prescribed regulations. Land privileges: Lease agreements for land use are limited to 50 years. Renewal is permitted for up to
Read More
January 8, 2025
Thailand’s Board of Investment (BOI) has issued regulations revising its criteria for certain foreign companies that receive promotional privileges to own land under limited circumstances. The revised allowance is detailed in the Notification of the Board of Investment No. 16/2567 Re: Criteria for Permitting Foreign Juristic Persons Receiving Investment Promotion to Hold Land Ownership for Office and Residence, which was published in the Government Gazette on December 9, 2024, after having been officially issued on November 1, 2024. The notification was made in conjunction with the subordinate Notification of the Office of the Board of Investment No. Por. 8/2567 Re: Criteria and Conditions for Permitting Foreign Juristic Persons Receiving Investment Promotion to Own Land for Office and Residence for Operational-Level Workers to Operate Business Granted Investment Promotion, dated November 4, 2024. Under the new BOI notification and subordinate notification, foreign juristic persons that receive promotional privileges from the BOI, with paid-up registered capital of at least THB 50 million, are eligible to own land for office use or residential purposes, subject to certain criteria and conditions: Office use. Land used for this purpose must be for an office of the relevant BOI-promoted business, with an area limit of 5 rai (8,000 square meters). Residential use. Land used for this purpose must be for the residences of operational-level workers (i.e., unskilled laborers), with an area limit of 20 rai (32,000 square meters). In addition, there must be common facilities (e.g., parking, first-aid room, kitchen, and other amenities, as approved by the BOI). The land must be located within 10 kilometers of the place of business operation, and the number of rooms must be consistent with the number of workers. For more information on this notification, or on any aspect of property law in Thailand, please contact Chaiwat Keratisuthisathorn at  [email protected],
Read More
December 12, 2024
Litigation is usually the last resort in resolving disputes. Most parties to a dispute try to avoid litigation altogether, fearing that seeking recourse with the courts or arbitration will lead to a disruption in commercial relationships, result in increased legal expenses, and generally lengthen the period in which the dispute remains unresolved. While some of these concerns may indeed be legitimate, sometimes litigation is the only means for a party to obtain relief. For parties contemplating such recourse, it is reassuring to know that the Thai court system is generally an accessible, unbiased, and balanced vehicle for the resolution of disputes. Civil Litigation in Thailand aims to introduce some of the fundamentals of Thai civil court procedures and practices. This brief guide covers the main issues concerning civil litigation in Thailand as either a plaintiff or a defendant. Tilleke & Gibbins also publishes a similar guide for Vietnam. The full guide is available through the button below.
Read More
December 9, 2024
Attorneys at Tilleke & Gibbins in Phnom Penh have contributed the Cambodia chapter to Labor and Employment Disputes 2024, a comprehensive guide from Lexology Panoramic to labor and employment dispute resolution in various jurisdictions around the world. The Cambodia chapter covers the following topics: Pre-action considerations: Key requirements, third-party funding, contingency fee arrangements Issuing a claim: Forum, territorial jurisdiction, standing, commencing claims, fees, service Defendants and legal personality: Types of claims, time limits, counterclaims Case management: Procedure, rules, amendments to claims, adding parties to proceedings, consolidating proceedings Class and collective actions: Special considerations Evidence: Witnesses, tactical considerations Interim relief: Availability, requirements Trial: Hearings conduct and typical time frames, confidentiality and public access, media reporting Elements of successful claims and burden of proof Alternative dispute resolution: Available types, requirements and expectations Enforcement: Collective employment and labor rights, enforcement of collective rights, standing Remedies and enforcement: Available remedies, assessing compensation, enforcement mechanisms Appeals: Appeal procedure and time frames, other means of challenge Update and trends: Recent cases and developments, technology developments, other issues The Cambodia chapter was authored by associates Mealtey Oeurn, Saryda Ou, Chanvisal Lok; and Jay Cohen, partner and director of the firm’s operations in Cambodia. Tilleke & Gibbins also contributed the Vietnam and Thailand chapters to Labor and Employment Disputes 2024. The full Cambodia chapter is available below as a PDF.
Read More