Contractors and the Renovation of Property

By Robert R. Virasin and Yutthachai Sangsirisap

As land prices in prime locations in Thailand go up, condominiums are getting smaller and more expensive. Many people have chosen the option to purchase larger less expensive properties with the goal of renovating the property. There is a risk to making this choice. There is a lot of misleading and inaccurate information available when attempting to choose a contractor.

Locating a contractor to do the job within your price requirements can be difficult. Many contractors are unlicensed, do not have experience, and provide low estimates to obtain the job without the ability to complete the job. When researching contractors, it is important to review their references, talk to previous clients, and to physically view their work. It is easy for a contractor to point at a picture and say that it is their work.

Experienced contractors should provide drawings and architectural blueprints covering every square meter of the property with detailed renovation costs. If they cannot provide you documentation outlining what they will be doing as part of the renovation, they may be guessing at what needs to be done.

After selecting the contractor, it is important to sign an agreement that has a detailed timeline with milestones toward the completion of the project. The overall bill for the renovation should be split and paid after the contractor has completed each milestone in the project. While a deposit is generally required for materials, full payment should not be made prior to the contractor completing the project.

Diligence can prevent the hiring of an incompetent contractor but it does not guarantee good or complete work. What type of legal action can you take on the contractor in the following circumstances:

You pay the contractor and during the middle of the work, the contractor leaves and does not return. The renovation is partially complete.”

Under section 599 of the Thai Civil and Commercial Code, when there is a delay in the delivery or the delivery of defective work by the contractor, the customer is entitled to withhold remuneration. This means that if there is a delay in the construction or if there is defective work, the customer can withhold payment until the work is completed or the defect has been fixed. In addition, if the work has not been completed, section 578 allows the customer to withhold all pay, terminate the contract, and sue for breach of the agreement to claim for damages.

The contractor completes the work but you later find out that he skipped steps or used inferior materials.”

Under the Thai Civil and Commercial Code Section 589, the materials for work supplied by a contractor must be of good quality. If the contractor uses materials that are of an inferior quality than the materials agreed upon, the contractor is liable to repair for the defects that occurs. The contractor is liable for defects that appear within one year of completion of the work unless the agreement provides otherwise. However, the one-year limitation does not apply where the contractor intentionally attempted to conceal the defect.

The contractor accepts the job then begins work on the renovation. In the middle of the job, he informs you that the costs of the renovation are higher than expected. He tells you that he cannot complete the job at the agreed upon price and demands more money.”

In the above circumstance, it is necessary to look at the agreement with the contactor. If there is a fix cost clause which prevents changes to the agreement, it can prevent the contractor request additional remuneration without consent of the customer. However, some agreements allow the contractor to request additional remuneration if there are material changes in the cost of the project.

So before signing any agreement, it is important to understand the clauses that relate to additional costs or expenses. If there are no clauses that concerns additional expenses, then the customer can force the contractor to incur the additional expenses by themselves and complete the work.

The above information is general in nature and should not be considered legal advice for any specific cases. If you have any questions, we advise that you seek legal counsel from a reputable lawyer.

Collecting Debt in Thailand

 

With the Thai economy stagnating, household debt is reaching record levels on an annual basis. According to the University of the Thai Chamber of Commerce, the average household debt reached nearly 300,000 baht in 2016. This amount is higher than the annual income of the average Thai family. Seventy-four percent of families in debt have defaulted on a loan.

The high default rate is a concern for people or businesses that have loaned money. If someone has stopped paying on a debt, what should the creditor do? The first thing for a creditor is to ensure that their loan is enforceable.

Title IX, Chapter II of the Civil and Commercial Code outlines the requirements for consumer loans. A loan exceeding 2000 baht must be written and signed by the borrower. Repayment or cancellation of a loan exceeding 2000 baht can only be proven with a document signed by the borrower.

A loan for a movable property (non-fixed property) is covered by Title XIII, Chapter I of the Civil and Commercial Code. These loans require a written agreement which outlines the obligation for performance of the loan with interest, compensation in case of non-performance, and requirements to preserve the pledged property. If the debtor defaults on the loan, the creditor must first notify the debtor in writing to perform their obligation within a reasonable period.

The Thai Civil and Commercial code does not require a written agreement for contractors. Under the law if the contractor has completed any part of the work, the employer is liable for the completed part. While a contract is not required, it is recommended that the parties have a paper agreement outlining the rights and obligations of each party. Without a contract term stating otherwise, an employer can cancel the job as long as the employer compensates the contractor for loss.

The Thai Civil and Commercial Code covers multiple types of relationships. It is important to review the type of relationship in the creditor and debtor relationship to ensure that the documentary requirements are met. In addition, the creditor should review statute of limitations on attempting to collect on the debt. Different types of debts have different time limitations for collecting on a debt. Most debts have a statute of limitation of 10 years but some debt claims are limited to five or two years. After the time limit has passed, the debtor can legally refuse to pay the debt.

If the debtor has defaulted on a loan, the creditor should try to mitigate the losses before filing a lawsuit. A lawsuit can be expensive and time consuming without an assured outcome. It might be in the best interest to attempt to negotiate a partial payment or an extended payment plan to avoid litigation. A good negotiated settlement might be able to save the relationship.

If negotiation has not produce an agreement, the creditor can choose to move forward with potential litigation. Some claims require that the creditor serve the debtor with a demand letter outlining the claim and requesting payment with a reasonable time period to comply with the demand.

If the demand letter is ignored, the creditor can move forward with filing a lawsuit. The attorney needs to review the information and history of the dispute to ensure that a lawsuit is plausible and reasonable. If the debtor can pay the debt or owns property that can be held in lieu of financial payment, then it may be reasonable to pursue litigation. However, if the debtor does not have a job or property, a court ordered judgment will be difficult or impossible to collect.

The lawsuit begins with the filing of a claim with a court. The place of filing will depend on the value of the debt or the type of debt. After filing the claim, the court will generally require the parties to go to mediation. A mediator who will attempt to push the parties to come to an agreement.

If mediation fails, the parties will have to make their arguments in court. The court will consider the evidence and make a judgment.  If the debtor does not comply with the court judgment, the creditor can request a writ of execution to force the seizure of the debtor’s property and the auctioning of the property to collect repayment on the debt.

The process of filing a lawsuit to collect on a debt is time consuming and expensive. It is better for a creditor to attempt to negotiate with the debtor to avoid litigation. The creditor should consider the value of litigation in respect to the possible gain. A good attorney will discuss the matter with the creditor so that they will have reasonable expectations and can make an informed decision. Spending money and time on a lawsuit then losing the case is worse than not filing the case at all.

Songkran: Fun, Drinking, and the Police

 

Songkran is a Thai religious festival where people sprinkled water on their family members and pay respects to their elders marking the beginning of the Buddhist New Year. Now it is more known as a weeklong holiday and a three-day water fight and party. Large numbers of tourist come to Thailand to join in the festivities. There are music festivals, hotel pool parties, and walking street celebrations. It is a time where people let loose and civility is secondary. In response, Thai police are represented in large numbers to ensure that there are no disturbances.

Excessive drinking contributes to the party atmosphere and the police will be looking for people who have lost control. Public intoxication is defined as anyone who puts themselves into a state of drunkenness by the consumption of alcoholic beverages or other intoxicating substances and exhibits themselves in a troublesome or senseless behavior in a public or in a public space. Those found of public intoxication can be arrested and fined.

Many individuals lose control during Songkran. They begin defacing private and public property by destroying, disfiguring, or marking buildings. Others just start fighting or joining a public brawl. These individuals can also face imprisonment and a fine.

During this period, do not consume illegal narcotics in Thailand. The police are everywhere. They are looking for people under the influence of narcotics. The potential penalty for public intoxication, defacing public property, or fighting does not compare to the seriousness of being arrested and charged with illegal narcotics. A charge for illegal narcotics opens up people for extortion and long sentences in Thailand’s overcrowded prisons.

What should someone do if they are approached by a Thai police officer?

It is best to cooperate with the Thai police. Normally, the police just wants to ask some questions or observe the behavior of an individual. Under section 367 of the Thai Criminal Code, people are required to provide their name and address to a public officer if it is made in the interest of legal enforcement. The failure of provide such information or to intentionally give false information makes the person liable for a fine. In addition, the failure to cooperate might raise increase suspicions from the police and the police may further interrogate the individual.

In addition, any person who is given an order given by a legally authorized public officer and fails to abide by the order without reasonable grounds or excuse faces imprisonment and a fine. However, even if it is determined you have been given a reasonable request by a legitimate police officer, it is important to be wary.

If the police would like to search your clothes or bags, ensure that the search is done in public in the presence of other people. If they want to search your pockets, pull the items in your pockets by yourself to ensure that something is not unknowingly put in the pockets.

If the police determined that a law was broken and the individual needs to be taken into custody, they will arrest the suspect. The police have a duty to immediately inform the suspect of the charge and take them directly to the closest police station to be processed. They are not allowed to take them into another room or to a private house. They must take them directly to the police station.

After the arrest, the suspect can contact a related person and an attorney. Under Thai law, a suspect has the right to remain silent. It is a good idea for a foreign national to remain silent until they are represented by a local attorney. They can place themselves in a more difficult position if they talk without a full understanding of the language or Thai law.

The police can only hold a person for 48 hours unless they bring the suspect in front of a judge to request for an extension of the hold. After the arrest, the suspect may be eligible for bail. For small cases like public intoxication, the bail can be paid at the police station immediately.

Another quirk in the law is that Thailand has a good Samaritan law. When someone sees any person in danger, they are required to render assistance if the assistance does not put the individual in danger. If the public officer request assistance in the performance of a public duty, the person is required to assist the public officer. Failure to provide assistance in either of the above circumstances face imprisonment and a fine.

During this period of celebration, partiers should keep a copy of their identification, phone number of a local friend, contact for their local embassy, and the phone number of a local English speaking attorney. Have fun in groups and be vigilant. Stay away from narcotics and people who may attempt to take advantage of you.

What is wrong is the Thai Education System?

The Thai education system was recently been featured in the Economist (Poor schools are at the heart of Thailand’s political malaise, January 19, 2017). The article discussed Thailand’s international education rankings in the recently released Programme for International Student Assessment (PISA). Thailand’s scores have plunged to an overall ranking of 54 out of 70 assessed countries. PISA have found that one-third of Thailand’s 15-year-olds were “functionally illiterate.”

I recently took my family to a Thai school in the outer provinces. We went there to donate school supplies, money, and provide lunch for all the students at the school. We were expecting a couple of hundred children but only about half of the children were present. My wife asked the principal about the missing children. The principal replied that many children do not come to school because they cannot afford the 20 baht lunch and were embarrassed when they had to sit down at lunch and watch their friends eat.

I don’t think that school children go hungry in some of the wealthier provinces where people are paid more but it may be a problem where some families have to support themselves on a couple of hundred baht a day.

I decided to talk to my friend, Eric Guzman, who teaches at a school in Rayong, what he believes is the cause of students scoring so low in international assessments. He talked to a few of his fellow teachers and this was his response. The teachers that he communicated with wanted to remain anonymous.

Eric’s Response:

I spoke with a couple of my fellow Thai teachers about the Thai educational system. One Thai teacher says that he recognizes the benefits and drawbacks of the Thai educational system.

However, the teacher said that the annual policy changes instituted by successive Thai governments makes it difficult for teachers to develop a lesson plan. Teachers are uncertain whether a new government edict will remain or change. Another difficulty is when old policies remain in place when new policies are instituted creating more confusion.

A tangent to this issue is the proliferation of celebrations and holiday programs that take children out of the classroom. There are weekly events including sports week, scout’s week, Western culture week, and programs commemorating multiple Thai holidays.

Some foreign teachers question the frequency of these programs which occur multiple times a month. During these programs, many children are taken out of the classroom to assist in the preparation of the programs and classes are canceled. While the programs are fun, the preparations and frequency of these programs interferes with student’s academic progress.

Additional government programs reduced amount of time available to teachers while increases the teacher’s workload. This means less time preparing for classes and dealing with large amounts of administrative paperwork. Many Thai teachers feel overburdened with paperwork that reduces their ability to focus on their student’s learning. This is compounded when they have to deal with students who make no attempt to learn.

A Thai teacher anonymously remarked that he thinks that the most common problem among Thai students was laziness. He said, “Many kids, especially boys, are only interested in playing games. They seem to get bored easily with discussion and are only attentive during the first few minutes in class.”

I concur with my limited teaching experience. Most students become idle when they lack the drive and motivation to study. It is the role of teachers to continually entertain and educate to students. During the course of a year, I am required to continually develop new action plans to keep the students engaged and learning. This task is not easy and over time can be exhausting. I empathize with some teachers who have reverted to the old Thai teaching method of rote memorization.

One large challenge to teachers is Thailand’s no-fail policy. Even if the student does not show up in class, teachers have to provide minimal scores to allow the student to pass. Many students recognize that regardless of their performance in the classroom, they will inevitably move on to the next level at the end of the school year.

Still and all, I love my job as a teacher, and I enjoy being with my students. They are one of the primary reasons why I am teaching at my school. There may be times when the situation in the class seems more difficult than the other days.

However, changes should be made to the Thai education system to reduce government edicts and allow local schools more freedom to educate students. In a system where teachers feel overburdened with bureaucracy and where apathetic students still are allowed to pass, the passion in the hearts of many young teachers are quickly extinguished.

By Eric John Guzman and Robert R. Virasin

Mr. Robert R. Virasin is a licensed U.S. Attorney and managing director of Virasin & Partners. He can be reached at www.virasin.com. Mr. Eric John de Guzman is a teaches at a public secondary school in Rayong, Thailand.

Godiva Ice Cream

Review of Godiva Ice Cream by Tong Chantararatn

 

This 270 Baht (with free upsize promotion) Godiva soft serve ice cream did not quite meet my expectations. These comments are from my own preferences. Somebody might like it, but from this pricey brand named soft serve, I expected something richer and thicker — it was too light for me. The cone was okey but not that outstanding. For the price that I paid (will get smaller one without the promotion), I would have this soft serve ice cream only on special occasions, not just happen to walk by and pay the price.

I was a big fan of Godiva when I was in the US, but not for this one — I would stick to its truffles. Try it yourself. You might think differently.

By the way, it was Godiva store at the World Trade Center.