Thailand's new condominium law
focuses on protection for buyers

Standard agreement protects buyers

The new law introduces a standard sale and purchase agreement (SPA) for a condominium unit:

"...all developers must now use the standard agreement prescribed by the Interior Ministry. Any part of an agreement that is not in line with the standard form, and not beneficial to the buyer, is not only unenforceable, but the developer may even face criminal charges, potentially resulting in hefty fines."

The new SPA still has some deficiencies that need to be improved upon before condominium developers can actually start using it. First, there is almost no protection for sellers. Second, some parts suffer from "vague language" and "lack of detail." Guidelines will have to be provided on "how to add other terms and conditions on top of the standard agreement, in ways that do not conflict with the law."

Advertising now part of the contract: What you see is what you get

Truth in advertising is another important buyer protection in the new law:

To further protect buyers, condominium advertisements are now also strictly regulated. The advertising material must correspond to the facts listed in the condominium registration documents. Advertising material is also now considered part of the terms and conditions of the condominium SPA. Failure to provide the items presented in an advertisement may constitute a breach of agreement. In addition, the new Act clearly states that if advertising material is contradictory to, or inconsistent with the details in the relevant condominium SPA, it will be interpreted in a way that benefits the buyer.

As a result, developers have to review their marketing schemes and materials, and ensure that, among other things, computer-generated images of condominium features are not "too good to be true".

Zoning the use of space within condominiums

Space must be set aside for all future commercial activity in the formal plan submitted during condo registration.

In addition to retail store space located within condo buildings, condo units are often rented out as hotel rooms (condotels) for limited periods of time and people often use condos as offices. It is not yet clear whether this less formal commercial use of condo units will also be restricted.

Changes to condo governance and management

Several new provisions make condo governance more transparent.

Many provisions that were already commonly used in well-written condo Articles of Association (AOA) will now become law. Many AOAs will have to be revised.

The voting power of condo owners (co-owners) will now be based on the amount of space owned, not the price of the condo. This change in voting rights only applies to new condo registrations.

Annual reports like corporate annual reports will now be required and "details such as balance sheets, expenses and auditor's reports must be presented at the annual general meeting for approval."

Co-owners will now have the right to call for an extraordinary meeting to address problems that need a quick solution.

(Source: Bangkok Post, business, 12-10-08, Sorachon Boonsong and Rachoj Tawintermsup, link)

Vocabulary:

came into effect - when a law becomes active and can be enforced มีผลบังคับใช้

sale and purchase agreement (SPA) - legal language for the contract that a buyer signs with a seller when buying a condo  สัญญาจะซื้อจะขาย

X prescribed by Y - Y states that X must be carried out  ระบุว่าต้องดำเนินการให้ลุล่วง

in line with - follows, agrees with, matches สอดคล้องกับ ตาม (ข้อกำหนด)

face criminal charges - be formally accused of committing a crime (followed by a trial to determine guilt) ถูกตั้งข้อหาว่ากระทำผิดคดีอาญา

hefty fines - large fines, must pay a lot of money for breakign a law เงินค่าปรับสูง

vague - exact meaning not clear อย่างคลุมเคลือ อย่างกว้างๆ

terms and conditions - the standard legal way of saying: rights and obligations in an agreement ข้อกำหนดและเงื่อนไข

What you see is what you get (WYSIWYG) - appearance matches reality, usually considered a desirable characteristic ได้ตามที่ต้องการ (ตามสิ่งที่มองเห็น)

X contradictory to Y - X states the opposite of Y ขัดแย้งกับ

X is inconsistent with Y - X and Y cannnot both be true at the same time  ไม่สอดคล้องกัน

review - check carefully to find faults and improve ตรวจทาน

zoning - formally setting aside an area for a specific purpose, laws that say that an area can only be used for limited purposes (for example, a residential district with only houses, a commercial district with only shops and offices) จัดโซน

a condotel - a condominium that also functions as a hotel  คอนโดเทล  

governance - setting high level policies for the management of an organization so that it can meet its goals and satisfy its owners and other stakeholders  การจัดการ บริหาร

transparent - all parts visible to the public โปร่งใส

Condominium Articles of Association (AOA) - the official rules chosen for governing a condo  กฎหมายการดำิเนินการนิติบุคคลอาคารชุด

corporate annual reports - a document a company presents at an annual general meeting for approval by its shareholders (See Wikipedia) รายงานการดำเนินการประจำปี

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