Crackdown on foreigners using Thai nominees: DSI raid offices of law firm in Bangkok, Phuket and Samui

[Gulfsailor]

Horace; on a side note, online listed property prices on Samui are complete BS. Most high end properties get sold for 50-60% of the asking price. But there is always a newbie with too much money...

Rule of thumb for Samui;

30k Baht/m2 built for decent quality construction

Plus 15M - 50M Baht per Rai beachfront land depending on location.

Then add 2M for a good sized pretty pool.

So a nice 4 bed/4 bath villa of 400m2 on 800m2 land with a big pool will set you back a little over 20 million if you're on the south of Samui. With fancy furniture and quality decoration you can get yourself an awesome villa for under 25 million. 

[Dogmatix]

There are a lot of fly-by-night developers operating in resort areas, as well as crooked lawyers.  Some of the risky developers are operated by farangs.  Unfortunately developments by blue chip property firms are few and far between. I came across a scam in Samui where the real estate agent that was taking people around to see condos was heavily pushing one particular development which turned out to the another company owned by the farang owner of the real estate agent without any disclosure.  Needless to say the project was never finished and buyers lost their deposits and instalment payments. If we consider condos a bit more, there are nowadays weird and wonderful structures to allow  developers (often foreigners) to avoid getting stuck with 51% of the units that are supposed to be sold to Thais in projects aimed at foreigners. I saw one project  in Phuket that a friend was interested in buying into where all the units were being sold as 30 year leases with unenforceable options to renew for two further 30 year terms and some kind of indirect ownership rights in a Thai company that had been set up to own the land via shares in a BVI company that owned 49%.  A friend wanted to buy into this development and I recommended him to ask for due diligence documents on the Thai land owning company and its BVI.   The agent who was probably also the developer lost his rag completely and accused my friend of being an idiot for requesting due diligence documents for an investment of a paltry B6 million.  

 

Then there is the issue of title deeds, particularly in Samui, where title deeds are allegedly in existence for 150% of the land area of the island.  Some developments have been built on  forest reverse land for which title deeds have been fraudulently issued by corrupt land officers.  

[xylophone]

22 minutes ago, Dogmatix said:

There are a lot of fly-by-night developers operating in resort areas, as well as crooked lawyers.  Some of the risky developers are operated by farangs.  Unfortunately developments by blue chip property firms are few and far between. I came across a scam in Samui where the real estate agent that was taking people around to see condos was heavily pushing one particular development which turned out to the another company owned by the farang owner of the real estate agent without any disclosure.  Needless to say the project was never finished and buyers lost their deposits and instalment payments. If we consider condos a bit more, there are nowadays weird and wonderful structures to allow  developers (often foreigners) to avoid getting stuck with 51% of the units that are supposed to be sold to Thais in projects aimed at foreigners. I saw one project  in Phuket that a friend was interested in buying into where all the units were being sold as 30 year leases with unenforceable options to renew for two further 30 year terms and some kind of indirect ownership rights in a Thai company that had been set up to own the land via shares in a BVI company that owned 49%.  A friend wanted to buy into this development and I recommended him to ask for due diligence documents on the Thai land owning company and its BVI.   The agent who was probably also the developer lost his rag completely and accused my friend of being an idiot for requesting due diligence documents for an investment of a paltry B6 million.  

 

Then there is the issue of title deeds, particularly in Samui, where title deeds are allegedly in existence for 150% of the land area of the island.  Some developments have been built on  forest reverse land for which title deeds have been fraudulently issued by corrupt land officers.  

Very interesting Dogmatix and as regards shonky developers, well no one (as far as I know) has come up with a reason as to why the huge 990 condominium development on Nanai road (The Park by Phanason) has been stalled for almost 4 years.

 

I know some Thai folk who invested their hard earned money in buying these condos, which they were hoping to rent out as an investment for the future for themselves and families, but everything seems lost now.

 

Also I have some contacts and a few friends in the real estate business, although I'm not altogether keen on some of the methods they are using, however one which has shocked me a little is a major development near here, where all of the units have been sold off plan on phase 1 and 2, yet I have been reliably informed that it is highly unlikely that they will ever be built because of land wrangles and hassles and the agents know this, however the developers are offering such high rewards upfront for contracts to be signed, that the agents have ploughed on regardless.

 

Finally, I remember having a rather heated discussion with a director of real estate company here because on his website he was advocating foreigners using the company route, and also stating that 30+30+30 year leases could be signed and would be honoured.

 

It certainly is a minefield for the newbies and even those who have been here a while, but have yet to do any in-depth research into what they can actually own and what they can't, and what is legal and what is not and also how the whole "system" with regards to the interplay between the BIB, developers, lawyers and the courts actually works – – mostly financially driven of course and not often in the favour of the foreigner.

[Horace]

1 hour ago, xylophone said:

Very interesting Dogmatix and as regards shonky developers, well no one (as far as I know) has come up with a reason as to why the huge 990 condominium development on Nanai road (The Park by Phanason) has been stalled for almost 4 years.

 

I know some Thai folk who invested their hard earned money in buying these condos, which they were hoping to rent out as an investment for the future for themselves and families, but everything seems lost now.

 

Also I have some contacts and a few friends in the real estate business, although I'm not altogether keen on some of the methods they are using, however one which has shocked me a little is a major development near here, where all of the units have been sold off plan on phase 1 and 2, yet I have been reliably informed that it is highly unlikely that they will ever be built because of land wrangles and hassles and the agents know this, however the developers are offering such high rewards upfront for contracts to be signed, that the agents have ploughed on regardless.

 

Finally, I remember having a rather heated discussion with a director of real estate company here because on his website he was advocating foreigners using the company route, and also stating that 30+30+30 year leases could be signed and would be honoured.

 

It certainly is a minefield for the newbies and even those who have been here a while, but have yet to do any in-depth research into what they can actually own and what they can't, and what is legal and what is not and also how the whole "system" with regards to the interplay between the BIB, developers, lawyers and the courts actually works – – mostly financially driven of course and not often in the favour of the foreigner.

 

 

Useful.  I guess the take-away is to buy something that is already built and has a Chanote.

[Arkady]

Many years ago my father was on holiday with his second wife in the Canary Islands.  Since she loved it so much, he decided to slip into an estate agent and looked around while she was on the beach.  He bought a small flat to surprise her with and eventually they retired there and bought a house from a German developer he had befriended and had no problems with either purchase.  I know there have been references here to problems in Spain where many Brits got conned into buying houses that were built in no build zones and later pulled down. However, the majority of foreigners have a relatively trouble experience buying property there and there is no restriction on foreigners owning land.  The chances of someone  buying property on an impulse in Thailand like that and not having serious problems at some point are much less than in Europe.  One of the problems is that people enjoying their holidays out here may have a sense of euphoria that makes them drop their guard when they contemplate a serious purchase.  Even after decades in Thailand one is still always hearing of new scams and trickery and foreigners are perceived as fair game by the authorities.  Someone whose only in country experience is a couple of short holidays is and has no close Thai friends or connections is obviously at a serious disadvantage in buying property.

[Dogmatix]

http://www.nationmultimedia.com/detail/national/30357937

 

Although we tired of this topic two months ago, it seems that Big Joke is far from done. He has arrested a Chinese investor and his Thai nominees for violation of the Foreign Business Act.