Art on the Hill condo debacle in Pattaya

[whooshbang]

23 minutes ago, KittenKong said:

I wonder if this new request for 12,000B isnt your yearly common fee?

If your unit is only 21+sqm then the 13,050B sinking fund you have already paid sounds about the right amount, and it's unlikely that anyone made a mistake that would need it to be doubled.

Hi, I have been paying my common fee also. I am completely up to date with that. I paid the sinking fund (which i believe is a one off payment) several years ago. It could be that they have made a mistake but they are also trying to bill me for electric that i have not used either so anything is possible.

With regard to chanote, some people have them and some don't. I have been told the documents i signed for transfer of ownership have been lost and i need to fly back to the land to sign again..... currently working a contract in UK so that's not happening for a while. 

Also , i received an email to vote for Juristic person and haven't heard anything since so i have no point of contact with a juristic office nor do i know of any committee members or general meetings..... if anyone cares to email me some contacts i'd appreciate it.

I may have made a mistake paying the management fee's for the last 3 years without my transfer of ownership but have feared getting hit with the bill plus interest down the line. It very difficult to negotiate long distance and with someone who always believe they are right!

thanks for all your replies, much appreciated. gonna fly out in December if i can and raise hell in the office!

[Oukiva]

8 hours ago, supergeil said:

Some new developments set the management fee too low and just spend the sinking fund to cover the deficit, because management have no clue about proper budgeting. //

They can't use the sinking fund this way. It's not legal. Sinking fund can only be used for big renovation, big repair or emergency/safety work. I know it used to be common to use it for "management" still 10 years ago, but now I bet than owners would refuse to validate the yearly accounts at the next AGM and would immediately get rid off this bad management.

Seems to me than owners pay a lot of more attention to this kind of things nowadays than before, and don't hesitate to have Justice involved if the management doesn't act according laws and rules.

[supergeil]

2 hours ago, Oukiva said:

They can't. It's not legal. Sinking fund can only be used for big renovation. big repair or emergency safety work […]

I’m not sure what law you are referring to, last I checked, going over budget is not a crime, and you can even argue that the juristic person manager is forced to borrow from sinking fund if the management fee does not cover necessary maintenance.

A financial report will be presented at the AGM, but this will just show the deficit and thus reduction of co-owner’s equity (sinking fund), but if the numbers make sense, there is not many options.

As I wrote, this can happen with new builds because the developer wants to sell the units with a low management fee, sometimes making it too low to cover actual expenses, and it may take a few years until the co-owners can get the management fee raised, during which, a deficit will be covered by borrowing from the sinking fund.

[usexpat46]

1 hour ago, supergeil said:

I’m not sure what law you are referring to, last I checked, going over budget is not a crime, and you can even argue that the juristic person manager is forced to borrow from sinking fund if the management fee does not cover necessary maintenance.

A financial report will be presented at the AGM, but this will just show the deficit and thus reduction of co-owner’s equity (sinking fund), but if the numbers make sense, there is not many options.

As I wrote, this can happen with new builds because the developer wants to sell the units with a low management fee, sometimes making it too low to cover actual expenses, and it may take a few years until the co-owners can get the management fee raised, during which, a deficit will be covered by borrowing from the sinking fund.

At our condo the sinking fund account was not separate or even identified as sinking fund.  We had CBRE as our management company and they are considered one of the better management companies in the world although I certainly was impressed with their Thailand operation.

[KittenKong]

9 hours ago, whooshbang said:

I have been paying my common fee also. I am completely up to date with that. I paid the sinking fund (which i believe is a one off payment) several years ago. It could be that they have made a mistake but they are also trying to bill me for electric that i have not used either so anything is possible.

With regard to chanote, some people have them and some don't. I have been told the documents i signed for transfer of ownership have been lost and i need to fly back to the land to sign again..... currently working a contract in UK so that's not happening for a while. 

Also , i received an email to vote for Juristic person and haven't heard anything since so i have no point of contact with a juristic office nor do i know of any committee members or general meetings..... if anyone cares to email me some contacts i'd appreciate it.

 

Wow, sounds like a real mess. You are correct that the sinking fund is a one-off payment, unless some of it gets spent thus making a top-up necessary. Normal day-to-day costs should come out of the common fees, but if many co-owners are not paying, or if real expenses are way out of line with the budget, then management may be obliged to use the sinking fund to cover day-to-day costs.

Of course this should be reported in the condo financial statement but I've seen enough of these to realise that in Thailand anything involving accounting is quite likely to be a complete fantasy.

[KittenKong]

9 hours ago, Oukiva said:

They can't use the sinking fund this way. It's not legal. Sinking fund can only be used for big renovation, big repair or emergency/safety work. I know it used to be common to use it for "management" still 10 years ago, but now I bet than owners would refuse to validate the yearly accounts at the next AGM and would immediately get rid off this bad management.

I think the phrase is "should not be used" rather than "can't be used". And in many buildings most co-owners are much too stupid to understand a financial statement anyway, even if a complete and accurate one was presented to them which is not always the case.

As for getting rid of bad management, this can be much harder than you might think, especially if the bad management is also dishonest and manipulative.

[supergeil]

8 hours ago, KittenKong said:

Of course this should be reported in the condo financial statement but I've seen enough of these to realise that in Thailand anything involving accounting is quite likely to be a complete fantasy.

In my condo, the accounting was “cash in, cash out”.

So when owners bought a condo, they sent out an invoice for 12 months of common fee but did not record that anywhere.

When a co-owner paid this invoice, it would be recorded as income *for that month*.

This meant that: 1) income would vary wildly from month to month, 2) we had no list of co-owners owing us money, and 3) money technically paid for next year (e.g. co-owner paying from August and 12 months forward) was recorded as income for the current year.

For the second one (list of debtors) this could technically be constructed by going over all payments, but for example when it became 1st of January, they just sent out new invoices to all co-owners for a new year, not considering who had already paid some months of the new year (because that information was not easily available), but also, water consumption was using the same system, this was billed monthly, so a lot more complex to get list of debtors, and to make matters worse, all readings and calculations were done by hand on a piece of paper.

This meant that many co-owners forgot to pay for water, and was never reminded, or that when co-owners paid for water, the staff would just pocket the money, because the invoice sent to the co-owner wasn’t recorded anywhere.

It was the same for expenses, in that if we paid building insurance for 12 months in September, then that was just a lot of expenses for that year, even though 8/12 of it was really prepaid for next year.

It was impossible to get anything useful out of the financial report presented or the monthly expenditure reports. Couldn’t even check if we got the expected income from co-owners.

And in this environment, they managed to spend half our sinking fund, without really realizing how much of a deficit we had. But they did regularly complain that we had very few money because the developer did not pay owed management fees (although they had no idea how much exactly), and they used the bank account balance as an indicator of the health of our economy.

When I took over, I got all the accounting redone from day one (incl. new financial reports for the previous years) and it turned out that majority of co-owners had paid wrong amount of common fee without even realizing. One guy had paid 8 months more than he should.

[supergeil]

9 hours ago, KittenKong said:

As for getting rid of bad management, this can be much harder than you might think, especially if the bad management is also dishonest and manipulative.

I’d say the biggest challenge is to find a good management company.

[Oukiva]

9 hours ago, KittenKong said:

You are correct that the sinking fund is a one-off payment, unless some of it gets spent thus making a top-up necessary.

Not only that, but the value/amount of the Sinking Fund should be periodically increased to take account of the inflation and cost of work/renovation. Typically the initial Sinking Fund is calculated as a percentage of the global cost of the condo, and this percentage should be maintained during the life of the condo. A 20 or 30 year old condo would else have a Sinking Fund way too low, not enough for a major renovation.

[Oukiva]

18 minutes ago, supergeil said:

I’d say the biggest challenge is to find a good management company.

The question is: Do you really need a management company ? 

Several condos (including mine, Center Condo) have abandoned this old system. We have a manager who is an employee of the condo. Decisions are taken by the Committee. Management is made by (some) owners. We use a accounting software and an independent accounting company to keep accounts reliable and legal. Works fine for 5-6 years now.

[supergeil]

45 minutes ago, Oukiva said:

The question is: Do you really need a management company ? 

Several condos (including mine, Center Condo) have abandoned this old system. We have a manager who is an employee of the condo. Decisions are taken by the Committee. Management is made by (some) owners. We use a accounting software and an independent accounting company to keep accounts reliable and legal. Works fine for 5-6 years now.

We do roughly the same. But finding a building manager and/or committee members who will take an active role in management is also a challenge

The advantages of going through a company is that you do not need to find temporary staff in case of sickness or vacation, you do not have to manage payroll (social security fund, overtime payments, etc.), and you can sort of expect that a management company will have more experience running a building, e.g. what do committee members know about servicing the various installations in the building, or how to find Thai contractors to perform the various jobs that needs to be performed by a third party.

But I definitely prefer not using a management company for our building, as there is no question about who decides how things should be run.

[KittenKong]

7 minutes ago, supergeil said:

We do roughly the same. But finding a building manager and/or committee members who will take an active role in management is also a challenge

Not only is it hard to find a co-owner who will take an active role but it is even harder to find a co-owner competent enough to actually do anything properly. The crass stupidity of co-owners in my building is a constant amazement to me. Bad as using a management company is, not using one would be much worse.
As for Thai managers, I've not met one yet who doesnt spend most of his time operating some sort of scam or another: prostitution rings and supplying over-priced builders and insurance to co-owners are just two examples that spring to mind.

[JAI DEE MAK]

11 hours ago, KittenKong said:

I think the phrase is "should not be used" rather than "can't be used". And in many buildings most co-owners are much too stupid to understand a financial statement anyway, even if a complete and accurate one was presented to them which is not always the case.

As for getting rid of bad management, this can be much harder than you might think, especially if the bad management is also dishonest and manipulative.

You can also add "and when the Management own many apartments  and have many owners as friends who give them many  proxy votes".

JDM

[Oukiva]

1 hour ago, supergeil said:

// The advantages of going through a company is that you do not need to find temporary staff in case of sickness or vacation, you do not have to manage payroll (social security fund, overtime payments, etc.), and you can sort of expect that a management company will have more experience running a building, e.g. what do committee members know about servicing the various installations in the building, or how to find Thai contractors to perform the various jobs that needs to be performed by a third party. //

About payroll, your condo certainly already has a few salaries (in my condo by example: technicians, some of cleaning staff, gardener, secretary...) one more salary would not have big impact 

About "servicing the various installations in the building", the experience/knowledge is in the hands of technicians, hence the interest to have them as salaries. Same for all administrative work: the ladies in the secretaries know most about it, and the Manager is there to complete and supervise all.

For contractors for big works: What I saw when we had to repaint the building, is the manager asking other condos' management which company they used and if they were happy with the work and result. So not a problem to find the good ones. Then you put them in competition on the price 

 

[chris2004]

2 hours ago, Oukiva said:

The question is: Do you really need a management company ? 

Several condos (including mine, Center Condo) have abandoned this old system. We have a manager who is an employee of the condo. Decisions are taken by the Committee. Management is made by (some) owners. We use a accounting software and an independent accounting company to keep accounts reliable and legal. Works fine for 5-6 years now.

If you don't have a management company who is the Juristic Person? A farang can't do the job.

[whooshbang]

Thanks again for your replies. It would seem that there is a different figure for sinking fund on my chanote than the 600thb per sqm in my contract so they are asking me to make up the difference. I can now roughly calculate it as double the amount. So 1200thb per sqm on the chanote but only 600thb in my contract (which i paid already). The crazy thing is after telling me they don't have my chanote they have sent me an attachment from my chanote..... crazy! 

[Oukiva]

6 minutes ago, chris2004 said:

If you don't have a management company who is the Juristic Person? A farang can't do the job.

One of owners. Currently a Thai lady with a good position in a bank. Someone used to balance sheets and financial administration. And yes, we are lucky to have such a person in the condo. 

[whooshbang]

27 minutes ago, whooshbang said:

Thanks again for your replies. It would seem that there is a different figure for sinking fund on my chanote than the 600thb per sqm in my contract so they are asking me to make up the difference. I can now roughly calculate it as double the amount. So 1200thb per sqm on the chanote but only 600thb in my contract (which i paid already). The crazy thing is after telling me they don't have my chanote they have sent me an attachment from my chanote..... crazy! 

I guess i am fairly happy to pay this but only when they produce my chanote in full so i can confirm the additional fees.

Quick question to those who have their chanote.... is the document all in Thai and how many pages are there to it?

Thanks again for all you replies. Glad to see this forum still alive even if there are no AOTH owners here ;-)

[KittenKong]

22 minutes ago, whooshbang said:

Quick question to those who have their chanote.... is the document all in Thai and how many pages are there to it?

 

 

A chanote is one page and two sides. It is entirely in Thai. There is no mention of the sinking fund on it as far as I know.

Basically a chanote describes the property showing the address and the floor plan and the surface area. On the back it shows who owns it now and previously, also any liens that may be applicable to it (mortgages, leases etc.).

[KittenKong]

1 hour ago, Oukiva said:

For contractors for big works: What I saw when we had to repaint the building, is the manager asking other condos' management which company they used and if they were happy with the work and result. So not a problem to find the good ones. Then you put them in competition on the price

And the manager will probably contact the bidders and invite them to all submit inflated quotes and share the extra between themselves and the manager once a decision is made. Any that dont play ball will see their bid inexplicably lost.

You dont seem to be aware of just how dishonest some people can be here.

[KittenKong]

1 hour ago, whooshbang said:

It would seem that there is a different figure for sinking fund on my chanote than the 600thb per sqm in my contract so they are asking me to make up the difference. I can now roughly calculate it as double the amount. So 1200thb per sqm on the chanote but only 600thb in my contract (which i paid already).

You dont need to pay anything more than the amount specified in your contract. Any extra being requested will be either a scam or a mistake. The same applies to the common fees and the meter connection fees, all of which should be specifically mentioned in your contract.
Normally all the above are not due until the time of the actual transfer of ownership, though this particular building seems to be doing some very odd things.

Once the building is officially declared to be a condo by the Land Office then an AGM must be held within a few months to appoint a committee and a Juristic Person Manager, and to finalise whatever rules and regulations are to apply to the building. At that time, or at a future such meeting, the co-owners can agree to alter the amount of the common fees or the sinking fund, or to change the internal rules.

[Oukiva]

26 minutes ago, KittenKong said:

And the manager will probably contact the bidders and invite them to all submit inflated quotes and share the extra between themselves and the manager once a decision is made. Any that dont play ball will see their bid inexplicably lost.

You dont seem to be aware of just how dishonest some people can be here.

You are wrong again. The Manager has not the power to chose/decide; the decision for big bills comes from the Committee. The Manager role is only to "run" the condo daily and to follow the Committee decisions.

BTW why do you live in Thailand? Must be very painful for you to think all the time that every Thai people to meet - or are in relation with - will try to rob you or scam you! 

[supergeil]

1 hour ago, Oukiva said:

About "servicing the various installations in the building", the experience/knowledge is in the hands of technicians, hence the interest to have them as salaries. Same for all administrative work: the ladies in the secretaries know most about it, and the Manager is there to complete and supervise all.

Woah! That’s quite the operation there, with multiple secretaries, technicians, full-time gardener, etc.

How many co-owners are you servicing?

Honestly, it sounds a bit daunting with all this staff basically hired by the committee. Does the committee know what all these people are doing? Did they do job descriptions? etc.

We have two employees, and number two was a mistake, we only needed a building manager and then a part time technician (once a week), but the committee did not agree with me, so now we pay a guy to spend half his day in front of a computer checking Facebook.

He’s a good guy though, so I don’t want to fire him, but definitely there is not enough work to keep him occupied full time.

Gardener comes 1-2 times per month, cleaning lady is through a third party, same as security, and accountant is a freelancer who comes once a month.

 

[supergeil]

4 hours ago, Oukiva said:

We use a accounting software

Do you know which program you are using?

And does it do more than just accounting?

For example we also keep records about which condos are rented out to whom, and thus, who should be billed for water, who owns which vehicles, people can buy bottled water on credit, etc.

We manage all this data via Google Sheets although I have made a web frontend for our building manager to issue receipts, debit notes, and invoices, plus the co-owners can log in to see their balance and billing history.

But I am considering writing a complete system because there is some data duplication in our spreadsheets, and there are a few things which are harder to enforce without a custom system.

[Oukiva]

25 minutes ago, supergeil said:

Woah! That’s quite the operation there, with multiple secretaries, technicians, full-time gardener, etc.

How many co-owners are you servicing? //

A little more than 500 units on 15 floors in Center Condo. Staff is 1 manager, 2 secretaries, 3 (4?)  technicians, 1 gardener, x (?) cleaning staff. For most of them yes they have a job description and a planning to follow. Security guys are from an external company.

For technicians mainly, there is nearly permanently maintenance to do in a big old condo. They make most of it (paint, water, electricity, phone & internet...) except dangerous or specific like high walls painting, lifts work...

Depends of the size of the condo, but doesn't seem such a big staff for this condo... IMHO 

Interesting to know what kind of staff you have guys in your condo