Among the common terms used in condominium purchase is “sinking fund” and this may be misconstrued as part of the maintenance fee that would be collected monthly from each unit owner.
To differentiate it from the maintenance fee, the sinking fund is collected from unit owners only once and not monthly. Now, in a development, the amount collected from each unit owner may differ accordingly and this is because the rate is based on the area of each unit per square meter. The fund is collected in advance and is to be used for the maintenance of the condo development and its common areas.
See also the Maintenance Fee and Sinking Fund page.
Yet, there may be future unit owners who may express concern or doubts because the developer has mentioned about the collection of “sinking fund” prior to their taking over of the unit. Some may even think that the collection of such is already excessive since monthly fees are to be collected too.
However, the collection of the monthly fee and the sinking fund are allowed by law. Moreover, they are collected with different sets of purposes with the maintenance fee for minor repair plus for condominium management while the sinking fund is for major repairs that can happen only once.
Thai Property Attorneys
For someone who is interested to purchase and own condominium in Thailand, consulting a property lawyer will surely help him. Apart from asking his lawyer common questions such as about the title of the property and the contents of the contract draft, he must also clarify whether the sinking fund is in accordance to the prescription of the law and to the area of the unit he is about to purchase.
With the guidance of his lawyer, he can also make sure that the sinking fund is included in the contract.