Condominium ownership, is it true that you only have the right to air?

One of the questions that people often ask on social media about real estate is what ownership rights the buyer will get from the condo or condominium. Some internet users have even commented that buying a condo is different from buying a house.

If a disaster occurs, the person who buys a house will still have the land that has value in itself. But if it is a condominium, when such an event occurs, there may be nothing left to hold on to. Therefore, when buying a condominium or house, you must choose the one that suits your needs and study the matter of house and condominium ownership carefully before buying.

In this article, we will look at how similar or different these two types of property ownership are in terms of “ownership”, including when we will get ownership of a condominium unit, and what we will get as a condominium owner in the event of serious damage to the building.

Land title deed and condominium ownership certificate

1. Land title deed (NS.4)

When buying a house or townhouse, most people buy a project that is almost finished and can be moved into immediately to change ownership. The reason for having to transfer ownership is that the original owner of the unit is the name of the company that built the project. When we buy, the ownership must change to ours. However, it cannot always be changed immediately. It is divided into the following cases:

• In the case of buying a house or townhouse using all cash, we will be able to transfer ownership and change the name of the owner in the title deed to our name. This can be done by going to the district office where the project is located, where we must go with the project officer. And the original title deed document showing ownership can be kept.
• In the case of buying a house or townhouse through a bank loan, if we have to borrow from a financial institution on the day of the transfer of ownership, we must go to the district office with the officer of the financial institution that made the loan for us. The ownership in the title deed will be in the name of the buyer, but it is subject to a mortgage with the bank from which the loan was made. However, the financial institution will keep the original title deed, while we will receive a copy instead.

All details of the land area specified in the title deed will belong to the owner whose name appears on the title deed only, which we call an N.S.4, which is a title deed that can be transferred, or simply put, the owner can sell that house to someone else.

2. Condominium Ownership Certificate (A.C. 2)

Buying a condominium is different because we will not get a title deed like the above houses or townhouses, but we will get a “Condominium Ownership Certificate or A.C.2” instead.

However, the sales contract will state that we are co-owners of that project. The reason for using this term is because in the project there are other areas besides the living area of ​​the residents or what we are familiar with as the common area, which is the area that can be accessed by the rights of all residents living in the project and everyone is responsible for this common area by paying the common area fee each month.

For the right to ownership in the case of paying cash by yourself or borrowing through a financial institution, it is similar to the case of a house or townhouse, that is, it will be in our name only when we pay for the house in full with our own money or in the name of the financial institution in the case of requesting a loan.

When can I transfer ownership of the condominium?

If it is a new project that has not yet been built or is in the construction phase (pre-sales), we will not be able to transfer ownership of any units yet. But what we do in the beginning is to reserve and make a contract. The details of the unit (room size, room plan, materials, and items to be received) must be specified in the contract by law. We should read the contract carefully because when we put the pen to sign, it will be evidence that we have read the contract and understand it well.

After going through the booking and contracting process, it will enter the down payment installment period. This down payment amount must be our own accumulated money because financial institutions do not have a type of loan for down payment installments. The down payment amount is usually around 10-30% of the condo price (for buying a condo, 2nd contract or more, or buying a condo, 1st contract with a price of more than 10 million baht).

After we have finished paying the down payment, we will be able to enter the transfer of ownership period, which can be done if the construction of the project is completed and ready for occupancy. According to the law, if the construction of the project is delayed by no more than two months, the buyer cannot cancel the contract and request a refund of the reservation fee and contract.

However, by law, if the project is delayed for a year from the contract, the project must return the deposit in the amount agreed in the contract (remember, everything must be recorded in writing). When the project is completed, we must inspect the room, which by law, if the room size deviates more or less than 5% of the size specified in the contract.

The project must reduce the price per square meter, but how much per square meter it is must be the same as what is stated in the contract. It cannot be stated verbally at all. Similarly, if the size of the room is more than what is stated but not more than 5%, the buyer must pay the difference at the same rate as stated in the contract.

If the specification of the condominium deviates significantly or more than 5% from the size specified in the contract, the buyer has the right to request a refund of the deposit, but at what rate it must be as specified in the contract as well.

When we have checked to receive the transfer, we will have to go to the district office where the project is located as well. If it is all our own money, we can register the condominium ownership under our name. But if it is a loan from a financial institution, the title deed will be in the name of that financial institution, just like in the case of the houses and townhouses above.

However, the financial institution will keep the original title deed, while we will receive a copy instead.

In the event of a disaster in the condominium, is it true that the buyer will be left with nothing?

Most often, the price per square meter that a project sells is tied to the amount that the project will have to pay for building insurance in the event of a disaster such as a fire or earthquake.

Mostly, if a project does not have building insurance, financial institutions will not provide loans, whether it is for developers to construct the project or for home loans to interested buyers in that project.

When a disaster occurs and results in damage to the building (which rarely happens), the juristic person will receive a lump sum insurance payment which will be distributed to the residents according to their actual ownership rights as follows:

The number of square meters of our units divided by the total net living area (excluding common areas or only counting the area created by the living units). For example:

The total living area of ​​the project is 20,000 square meters. Our room area is 40 square meters, which is equal to (40 x 100) ÷ 20,000 = 0.2%. That is, assuming that the damages that the project can claim from the insurance company are 1 billion baht, we will get back approximately 2 million baht.

However, the juristic person can call a meeting of the residents to vote on various issues, from voting to distributing the money back or using the money to repair or build a new building, and may vote on how much to increase the difference. The resolution will be effective only if more than half of the votes are cast for that resolution.

It can be seen that before transferring the ownership of a residence, we should read the contract carefully before putting the pen to the end to agree to the various conditions in the contract, including other types of contracts as well. Because when we sign, it means that the other party can claim that you agree and understand the various terms in the contract very well before signing.

If a lawsuit does arise, we will lose points from this point. Or, to play it safe, you may bring a legal expert or someone who has experience in buying a house or condominium with you to help interpret the contract.