Part 7: Project closing and after-sales

Chapter 26 Condominium registration and the juristic person

Legal issues A developer can transfer units individually only after construction is complete, the legally required construction certificate has been obtained, and the condominium has been fully registered, together with the condominium unit ownership certificate (Form Or Chor 2). The condominium juristic person is responsible for managing the common property in accordance with the law and the by-laws, and voting rights are based on ownership ratios. Housing estates are governed by the land allotment law, and the process for taking over utilities and public facilities differs from that for condominiums.

What the developer must do Prepare in advance the registration documents, the unit floor plans, the private property, the common property and the ownership ratios. Draft by-laws that fit the way the building is used. Carry out a pre-handover audit and rectify defects before handover. Assemble complete as-built drawings, manuals, warranties, maintenance contracts, permits and financial records. Sign the handover and keep the supporting evidence.

Key risks A poorly managed handover is where disputes with co-owners begin. Sinking funds and common area fees collected in advance must be recorded separately and handed over correctly. Voting proportions, quorums and special resolutions must be checked against the current condominium law. A developer that still holds unsold units is also liable for the common area fees on those units.

Chapter 27 Developer liability after sale

Legal issues After transfer, the developer remains liable for defects under the law, the contract and consumer rules. The market uses a framework of five years for structure and one year for other parts, but this must be checked against the contract and the drawings actually used. Safety liability is the most severe because it involves human life and may lead to criminal liability. The law on liability for damage from unsafe products may be relevant to certain types of equipment or materials.

What the developer must do Put back-to-back warranties in place with contractors and manufacturers that cover the period given to customers. Set up a defect reporting system with SLAs by urgency, track status and analyse recurring causes. Set aside a reserve budget before the project closes. Keep documents on material standards, testing and inspection, and consider suitable liability insurance.

Key risks If warranties are not back-to-back, the developer bears the repair costs itself. Problems affecting many units may turn into a class action. Structural or fire-protection problems must be dealt with immediately, with lawyers and independent engineers assessing them together. Delayed rectification increases both damages and reputational harm.

Chapter 28 Disputes and dispute resolution

Legal issues Common disputes concern construction, SPAs, defects, loans, JVs, tax and permits. The available channels range from negotiation and mediation to arbitration and the courts. Consumer cases follow a special procedure that favours consumers. A class action is a risk when many injured parties share common facts. Foreign arbitral awards can be enforced under the New York Convention, whereas, as a general principle, foreign court judgments cannot be enforced directly in Thailand.

What the developer must do Choose the dispute resolution method at the contract drafting stage, considering value, counterparties, language, the assets to be enforced against and cost. Set up early warnings, keep documents as soon as a dispute begins, and assess negotiation options before suing. Prepare a litigation budget and check insurance coverage. Have lawyers assess the legal issues and limitation periods.

Key risks Even a won case can cost a great deal of time and money. Careless internal communications or statements to the media can become evidence or harm reputation. Arbitration may be faster than the courts but involves costs and limits on appeals. A choice of venue that places an unreasonable burden on consumers may have no effect.