Real Estate

It’s clear that first time buyers have very much re-established themselves as a core part of the property market since the recovery started post the credit crunch. The Halifax data clearly shows that FTBs (rightly) decided to rent/stay at home rather than buy during the recession, saving them from potential negative equity issues. This was a sensible move, but statistically has artificially driven up the average age of a first time buyer which will hopefully fall back over the next few years.

Although we haven’t fully recovered to pre-credit crunch sales volumes, FTBs are now a major driver of the property market, partly thanks to government initiatives such as Help to Buy, and this will hopefully improve further following the ‘fall out’ of buy to let investors. But the increased demand and not enough properties on the market means that property price inflation for first time buyers does appear to be slightly higher than other properties, when averaged out, around 6-7%. As with all property data, since the credit crunch we are seeing vast differences on a regional basis, so much so that ‘national averages’ for first time buyers are incredibly misleading to consumers and policy makers and should be ignored.

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A raft of unprecedented benefits in store for lessees

Thailand is bracing for the passage of the leasehold draft bill that is expected to entice more foreign lessees to the property market, according to the Bangkok Post.

The Council of State is due to vet the leasehold bill after public hearings ended on 16 June. The bill has already received cabinet approval.

Under prevailing laws, foreigners can own condominium units but are prohibited from acquiring land, except in special arrangements with the Board of Investment and the Industrial Estate Authority of Thailand.

Lease rights are also not transferable and cease automatically at the time of the lessee’s death.

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The Condominium Act of 1979 is restrictive of foreign ownership of condominiums in Thailand, but generally allows it for foreigners who permanent residents, or those who have entered the country on an investment promotion visa, or for those who have fulfilled certain requirements related to the transfer or withdrawal of foreign currency. In regards to those foreign currency requirements, the Land Department Regulation Re: Foreign Ownership of Condominium Units of 2004 defines the foreign currency requirements below.

The foreign purchaser must provide evidence of either (1) remitting foreign currency into Thailand, or (2) withdrawing Thai baht from the bank account of a person who is domiciled outside of Thailand, or (3) withdrawing money from a foreign currency account in an amount no less than the purchase price of the condominium unit that is intended to be purchased.

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Developers from across the island hope to achieve both local and national recognition as the finest in their categories

Key members of the Phuket press gathered last night at the Angsara Laguna Phuket for an exclusive media briefing in advance of the 13th annual PropertyGuru Thailand Property Awards 2018.

Addressing the room was Terry Blackburn, founder of the Asia Property Awards, regional awards judge Robert Krupica of Hughes Krupica law firm and Kamolpat Swaengkit, country manager of DD Property.

“In a fast expanding property market like Phuket, developers and investors understand the benefits of quality endorsement by a prestigious awards programme,” said Terry Blackburn, “The PropertyGuru Thailand Property Awards encourage excellence across all aspects of the real estate industry, which is why the number and quality of entries from Phuket and around the country increases every year,” he added.

Robert Krupica described the Phuket market as “vibrant as ever” and gave some insights into how the market has evolved in his nine-year tenure as a Thailand Property Awards judge. “One of the more interesting developments that I’ve seen in the last few years has been the increase from domestic Thai buyers, showing a strong interest in investing in a second home or rental income property in Phuket. This is something we didn’t see 10 years ago as much,” he said.

The Thailand Property Awards, founded in 2006 has grown exponentially in the last 13 years. The first gala dinner hosted 200 guests, while 2018’s event, which will be held in Bangkok on 31 August, is expected to attract upwards of 600 of Thailand’s leading property developers, VIP’s and leading industry figures.

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Setting Up Company Partnerships under Thai Law

Siam Legal International | October 10, 2016 | Business in Thailand, Civil and Commercial Law, Company Law, Company Registration

The Civil and Commercial Code of Thailand provides for the formation of partnerships as is found in the laws of other countries. However, partnerships are normally not formed by foreign investors due to particular difficulties that arise due to the Foreign Business Act of 1999. Generally speaking, the formation of a limited company is more advantageous to foreign investors since majority Thai-owned companies with foreign directors are still considered “Thai nationals” for the purposes of the Foreign Business Act. In contrast, partnerships, even if formed with majority Thai capital investment, are still considered “foreign nationals” if the managing partner is a foreign national. Nevertheless, it is possible for foreign nationals to operate business in Thailand as a partnership in certain cases, such as if they are operating a business that is unrestricted by the Foreign Business Act, or if they have obtained a Foreign Business License or a Foreign Business Certificate under the Thai-U.S. Treaty of Amity. A few of the notable points regarding the operation of a partnership is as follows:

There are three forms of partnerships: an unregistered ordinary partnership, a registered ordinary partnership, and a limited partnership.
As for the unregistered ordinary partnership, it refers to a business partnership arising from a contract and does not constitute a juristic person. The partners are jointly and unlimitedly liable for the obligations of the partnership and are bound to each other by the terms of their partnership agreement. If an ordinary partnership is then registered, it will have the status of being a juristic person. Nevertheless the partners are still personally liable to third parties.

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The Phuket condominium market is expected to rise in line with a recovering economy and the growing population of the island.

Increasing supply and higher selling prices will be the key drivers, while demand is forecast to improve slightly. Local developers and joint ventures will be key players in the market, said property consultant Knight Frank Thailand.

Demand will continue to be driven by international buyers and investors from China, Russia, and Australia. Knight Frank expects a larger portion of South Korean buyers in the following years. Average asking prices per square metre are anticipated to rise in all areas, while increasing demand for luxury condominium units may see prices approaching a new high in 2018, especially for properties located by the sea.

Luxury buyers tend to buy them for their own residence or long-term capital appreciation.

Phuket’s Smart City is also expected to stimulate demand in the city. The initiative aims to transform the province into a “smart economy and smart living community” and establish the city as a hub of digital industry that will attract investors and tourists alike. The project is scheduled to be completed in 2020.

Phuket’s condominium market took a fall in 2017. The total number of units launched last year decreased 29% to 1,736 from 2,478 in 2016. On the demand front, there were 1,147 condos sold in 2017, down 36% year-on-year.

Newly launched supply with a sea view, partial sea view, or no sea view accounted for 44%, 54%, and 2%, respectively. The majority of the developments are in the high-end segment, principally located in Karon, Naiharn, and Bangtao.

Condominium projects launched in 2017 recorded an average take-up rate of 66%, down 6% year-on-year. However, projects with affordable pricing, attractive down payment packages, exceptional amenities, and convenient locations achieved higher sales within weeks of their launch.

The average asking price per square metre for all new condominium projects launched in the Phuket market last year surged to 135,719 baht, up by 2.5% year-on-year.

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Shareholder meetings play an important role in the governance of Thai limited companies since the Civil and Commercial Code require that limited companies be managed by the directors under the control of meetings of the shareholders (called “general meetings” in the Code). The primary instrument used by the general meetings to govern the company are shareholder meeting resolutions which are passed by a majority vote of the shareholders attending the meetings. However, an important legal issue that arises in regards to shareholder meeting resolutions concerns the withdrawal of resolutions after they have been passed by a meeting. Section 1195 of the Civil and Commercial Code provide for the withdrawal of company resolutions. According to that section, a resolution must be withdrawn by court order. Furthermore, only a shareholder or director has standing to challenge a resolution and may make such an application to the Court.

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Real estate’s reputation as a valuable investment asset strengthens further in the Thai capital

Bangkok’s property market is going from strength-to-strength, according to DDproperty’s latest Property Index.

The Thai capital has displayed price growth with an eight-point increase from 205 to 213 in the first quarter of 2018. This growth is on the back of an improving economic outlook and an expected increase in Gross Domestic Product (GDP) this year to 4.2 percent (up 0.3 percent y-o-y), and in part due to the rising cost of developing projects in the popular but densely built-up areas in Bangkok.

The Index has jumped by 213 percent in the last three years, fuelled by hot land prices which has meant that affordable residential developments are being pushed further from the city centre, most commonly along mass transit extension lines.

“The sophistication of Bangkok’s property market is more apparent now than ever,” said Kamolpat Swaengkit, Country Manager for DDproperty. “As values continue to move upwards, property’s reputation as a valuable investment asset strengthens further. Developers are therefore taking note and it is no wonder that the year has welcomed joint ventures between local and foreign developers eyeing potential across the city. They have become a lot more selective on the kinds of projects they work on, with the focus on building the ‘right’ property for the location and ensuring it is suited to its target audience. We have seen a real shift in the market with this renewed attention to detail.”

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Shareholder meetings are an important element in the management of Thai limited companies, since the authorized directors of the company must manage the company under the control of the meetings of the shareholders. In order to hold a meeting of the shareholders, a meeting has to be called according to the procedure defined in the Civil and Commercial Code. One of the procedures according to the Code is that a notification must be delivered to the shareholders.

Section 1175 paragraph one requires that an advertisement must be published in a local newspaper at least once before the date of the meeting no less than 7 days in advance and a notification must be sent by post with acknowledgment of receipt to all shareholders whose name appears in the shareholder registry no less than 7 days in advance of the date of meeting. However, for extraordinary meetings of the shareholders, the aforementioned procedure must be performed no less than 14 days in advance of the date of the meeting.

According to Section 1244, a notification shall be deemed to be delivered to a shareholder if it is delivered to him personally. Furthermore, if the notification has been delivered to the address of the shareholder that appears in the shareholder registry, the shareholder shall be deemed to have been duly notified.

According to Thai Supreme Court Decision No. 384/2506: “Section 1175 of the Civil and Commercial Code regarding notifications of a general meeting of the company only requires that a notification of the meeting be sent no less than 7 days. Therefore, where the Defendant, who is a company liquidator, has sent a notification by post no less than 7 days in advance of the meeting and Plaintiff, who is a shareholder, has received it, then it shall be deemed that Defendant delivered the notice correctly according to the law and it is not relevant as to what day Plaintiff actually received it.”

Furthermore, Section 1175 paragraph two requires that the time and location of the meeting be indicated in the notification, as well as the agenda for the meeting. If a special resolution is to be considered, then the substance of the resolution must be included in the notice.

According to Thai Supreme Court Decision No. 2644/2520 “a general meeting wherein a matter is considered outside of the agenda, a resolution passed by the shareholders to pay a debt which the shareholders themselves are the creditor and have a personal interest violates Section 1174 and 1175.”

Thai corporate law is complex. Foreigners who are in charge of managing a Thai limited company are advised to consult with competent Thailand lawyers.

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All eyes on the Andaman as the nation’s second-highest office issues directive on the ‘Riviera’

The coast of mainland Thailand facing the Andaman Sea has got the shorter end of the tourism stick, compared with its eastern counterpart.

Addressing this imbalance, the Tourism and Sports Ministry will be proposing the Riviera Thailand project during a Cabinet retreat in Phetchaburi on Tuesday. The announcement was made at the request of Deputy Prime Minister Somkid Jatusripitak, revealed Tourism and Sports Minister Weerasak Kowsurat on Sunday.

The Riviera, a coastal stretch that includes such towns as Phetchaburi, Prachuap Khiri Khan, Chumphon and Ranong, has long been overlooked for tourist spots along the Gulf of Thailand, the deputy prime minister reasoned.

“The Andaman has been ignored by Thais because it doesn’t have the legacy of Hua Hin nor road access, and the hotels are about beaches, while most Thais prefer more urban-type destinations,” said Bill Barnett, managing director of hospitality consultancy C9 Hotelworks.

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