Deal brokered over troubled Phuket condo project
PHUKET: A committee set up by the Damrongtham Centre (DC) to hear disputes between property developers and their buyers yesterday brokered a deal that may solve a long-standing problem over the 69-unit Chalong Bay View condominium.
Wednesday 19 September 2012, 04:52PM
The meeting, chaired by Boonthop Lanthong, Phuket’s Chief Public Prosecutor, was attended by four of the buyers – one of whom is also an investor in the development – two directors of the development company and their lawyer, and an interpreter.
The three buyers said that the project was almost complete; it was just waiting for interior decoration. Between them they had paid the developer about B13 million, but the ownership of the condos had not been transferred, as promised.
One of them told the committee that the transfers were about three years overdue, which is why they had brought a complaint to the DC.
Mr Boonthop asked the company’s representatives if they were contractually obliged to transfer ownership.
Their lawyer replied, “Yes, the company has an obligation to transfer ownership to the customers but it has a problem with the bank. As a result it is not possible to transfer ownership at the moment.”
He said that the company was ready to return a proportion of the money paid by the buyers if, in return, the buyers would sign a contract absolving the company of all further obligations to them.
Initially the buyers insisted that they wanted at least 90 per cent of their money returned. The company’s counter-offer was 60 per cent within six months “because the company must contact all the other buyers and make the same agreement with them, too”.
The committee explained to the buyers that if they took their case to the court it was likely to take seven or eight years to get a decision, or more. The committee felt they would win the case, but pointed out that, by that time, the company might have no money to pay them.
In any case, if the company did not pay within six months, as agreed, the buyers still had the option of bringing a legal suit and also of taking their case to the Consumer Protection Office.
After consideration, the three buyers decided to accept Chalong Bay View’s offer of 60 per cent within six months, and signed an agreement to that effect.
The company’s lawyer told the Phuket News after the meeting, “The agreement is fine. We are confident that we can pay all the buyers the agreed amount within six months. What we have to do next is contact the other buyers in Phuket and abroad.”
It is not clear yet what will happen to the building if and when the buyers have all been paid.
At another hearing of the committee, a lawyer representing 13 mainly foreign buyers appealed to the DC to help resolve a dispute between them and the developers of the ChomTawan project, which includes both villas and condos.
The lawyer complained that the condominiums had not been handed over to the buyers earlier this year, as stipulated in their contracts with the company.
The company was not represented at the meeting. An officer of the DC said that the Centre had earlier written to the developer, Napawan Asia Ltd, asking for an explanation.
In a letter written in March to Governor Tri Augkaradecha, with a copy to the DC, Napawan said that it was very close to being able to transfer ownership.
It said that the condos had been completed to the point where the buyers had moved in, and that they were “happy” with the facilities.
The letter explained that because of the unexpectedly bad international economic conditions for the past several years, the company had not been able to repay a bank loan as fast as expected.
Napawan would negotiate with the bank with the aim of restructuring the loan in order to allow transfer of ownership to the buyers.
The company wrote that it would make every effort to resolve the problem. This does not appear to have happened yet, hence yesterday’s meeting at the DC.
Both Mr Boonthop and the lawyer for the complainants agreed that flexibility was in order, and the company should be given a further 30 days to meet with the committee to present its side of the dispute.
The following day, a spokesman for Napawan Asia Ltd told The Phuket News, “The company is pleased to confirm that it has already reached an agreement in principle with ChomTawan buyers to proceed with a proposal for settlement of the bank debt that will enable the transfer of ownership of all properties.
“Forty-four property buyers, from a total of 47, have given their support, with one undecided and two who cannot be contacted at this time.
“We will update Mr Boonthop and the lawyer [for the buyers] about this progress as soon as possible.”