Amendments to land law benefit buyers
Amendments to land law benefit buyers
Feb 23, 2009
Easier compliance will aid developers
Land Allocation Act amendments that took effect this month offer more benefits to home buyers, reduce developers’ costs and draw those that try to avoid the law back to the legal system, according to the Lands Department.
Surasith Sahasthamrangsi, director of the department’s Real Estate Business Promotion Office, said one amendment deals with public and green areas in low-rise housing projects where no permanent buildings such as pools are allowed now.
“A public area in the project is now required by the law. It should not include other facilities such as a pool, arena or playground, which are frequently used as selling points by many developers,” he said.
“If they want to give these facilities to customers, they should build them in a separate area, not put them in a required public or green area.”
In the same vein, new projects covering less than two rai or having 19 units or less need not have a juristic person to run the project. Nor do they have to set aside public and green spaces, typically 5% of a development’s total area.
However, they are still required to seek approval for a land allocation permit if their project is between one and two rai with a total of between 10 and 19 units.
“This is a way for the government to stimulate the economy via the property business. It reduces project development costs as developers don’t lose land to a public area or a juristic person office,” said Mr Surasith.
The law still allows projects with less than one rai or a maximum of nine units to be developed without land allocation permits. Many developers, mostly smaller ones, try to build only nine units or less to avoid the law.
Mr Surasith said the requirement applied to areas in Greater Bangkok while in other areas, the plot limit is four rai or no more than 30 units.
“The amendment aims to persuade developers to do business legally,” he said.
To close loopholes, the office will not allow any extension of a project phase by the same developer. “We will strictly check and control. If an entrance to a project is found to be jointly used with another project that is closed, that is an extension of a project phase.”
The office, however, has put off consideration of a rule change that would require interior roads in townhouse projects to be eight metres wide instead of six.
“This issue stemmed from townhouse residents’ complaints. They usually had a problem with neighbours who parked their cars in front of their houses, narrowing the road and obstructing traffic,” said Mr Surasith.
He said possible solutions are improvements in project management, negotiations among residents and parking control by project security staff. Developers are required to take the responsibility for the juristic person’s administration for three years after project completion.
“Another common complaint by residents involves juristic persons,” Mr Surasith said. “So we visit five projects randomly each month to see whether those projects are well-maintained or unkempt by the juristic person set up by the developer. We’ve done this for two years now and found no problems so far.”
In reviewing the Land Allocation Act, the Council of State recently interpreted that any sub-plots in allocated plots were unable to be leased after some developers made proposals to the office to make money from unsold plots by renting them out. “It’s risky and would produce a loophole,” said the director.
Mr Surasith added the Interior Ministry initially agreed with a new legal requirement for new low-rise housing projects in Bangkok to have reservoirs to reduce the flow of water released into public areas, as flooding is a major problem. However, this requirement is awaiting a formal announcement.
New land-allocation rules still viewed as too rigid
Bangkok Post May 11, 2009
To encourage more developers to comply with the law, new rules governing space for juristic-person offices and public space should be eased further, says Issara Boonyoung, vice-president of the Housing Business Association.
The Land Department announced in March that property projects smaller than two rai and with fewer than 20 units could be developed without land allocation permits.
This means that they do not have to provide an office for a juristic person, normally at least 20 square wah, or public space of at least 5% of total sellable area.
The rule was eased from an earlier regulation that exempted only developments smaller than one rai or 10 units. However, Mr Issara said a more appropriate size for exempt developments should be four rai or 40 units.
The department’s Central Land Allocation Committee eased the rule in line with government policy to help the economy by encouraging more property development.
“The Land Department wanted small-sized developers who often try to avoid the land allocation regulation to get into the legal system,” said Mr Issara.
“We agree with this policy and hope that it can reduce consumer complaints about projects without legal land allocation permits.”
Setting aside 20 square wah represents 5% of the space in a two-rai project, which is a significant amount of space, in Mr Issara’s view.
“It’s not too much for a larger-sized project as the regulation requires only 20 square wah for a juristic-person office for any size of project.”