“One of the most prestigious residential developments in Phuket”, “The most desirable condominium on the island” – these are just some of the accolades the Chom Tawan development has received. And it’s not difficult to see why. The location, across the street from Layan beach, is exceptional and the apartments themselves are a thing of beauty too. Set amid tropical gardens, featuring over 180 m2 of internal accommodation, high ceilings, sizeable terraces and with only six apartments in each of the five buildings, these are graceful homes – with the emphasis on the word “homes” – they really do make you feel at home, but that is something that has to be experienced to be understood.
And now, ten years since the construction of Chom Tawan has been completed, some units are up for grabs at a price that’s as hard to beat as the development’s location. How much? Rather – how little! You can have one for 9.9 million baht! The original buyers paid on average 16 million baht each and taking land appreciation into account, the value of each unit today is estimated at just under 20 million baht. That little.
Delightful apartments, grounds kept in a flawless condition, perfect location and such discount? You’d be wise to ask “where’s the catch?” and Daryl Davies, the chairman of Chom Tawan Owners Committee, is eager to explain:
“When the developer sold us the apartments, we signed legal and binding contracts, but we never received Chanote titles for the property. The developer never applied for them.”
No Chanotes, only purchase contracts, fair enough. But that still doesn’t explain the massive discount. What does, is that the developer took a loan at a big Chinese bank, against the land on which the apartments are built and then went into hiding, never returning the borrowed money. Now that’s a pickle!
But, according to Mr Davies, things aren’t as bad as they might seem, because that loan is the subject of multiple lawsuits (there are 36 apartment owners) many of which have resulted in injunctions against the bank and determinations that the bank loan was improper. “And even if the bank did decide to put up a fight – which is highly unlikely as the amount of money loaned is insignificant for such a big bank – there would be so many legal appeals that it would take decades to reach any conclusion,” he says. Decades that the owners can spend using their apartments or be profiting from rentals.
“We are completely candid”, continues Davies. “All indications are that nothing will change in the foreseeable future. We will continue to have access to our apartments; it’s all a completely functioning, very well maintained and occupied property. But, and it’s a “but” with a capital B, there is a very remote possibility that the dozens of lawsuits filed by the owners and the judgments they have won will all be overturned or lost on appeal, leaving the way clear for the bank to take control of the property. Although possible, legal experts characterize it as highly improbable and then only in the distant future – far enough distant for buyers to get their money’s worth.”
“Yes, there is a small risk, but there is a huge discount to reflect that it and the ratio of risk to benefit is very attractive” he concludes.
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