Most frequent questions about this development Project
The Project is being developed on land (the “Project Land”) owned by the Crown Property Bureau (the “Landlord”). The Landlord is the registered owner of the Project Land, which is represented by a land title deed issued by the government authority, which can be presumed to be reliable and legally valid.
The Landlord, the Crown Property Bureau, is a Thai quasi-government agency responsible for managing the property of the Crown of the Kingdom of Thailand. It owns land in Bangkok’s central business district and other prime areas, and leases the same to developers for real estate project development.
The Landlord has registered a long-term lease over the Project Land to Country Group Development Public Company Limited (“CGD”) who has registered a long-term sublease over the Project Land to Landmark Holdings Company Limited (the “Developer”). The Developer will develop and construct the Project (the “Project Buildings”), including the Residences. Accordingly, the Developer will own the Residences and will sell the units in the Residences (the “Residential Units”) to the buyers (the “Customers”) under the leasehold scheme.
The Landlord grants CGD the right to lease the Project Land for an initial term of twenty-five (25) years from 15 May 2019 or from another day as agreed between the Landlord and CGD (the “First Head Lease Period”). The lease for the First Head Lease Period and the sublease between CGD and Developer for equivalent period have been registered with the relevant Thai land registry office.
The Landlord has also agreed to grant two renewal options (the “Renewal Options”) to CGD upon the expiration of the First Head Lease Period. The formula of the rent for the first renewal period of twenty-five (25) years has already been specified. For the second renewal period, the Landlord has agreed to grant CGD the right of first refusal for the renewal of the lease of the Project Land.
The permits under the Thai building control laws for the construction, occupation and use of the Project Buildings will be issued in the name of the Developer to show that the Developer is the owner of the Project Buildings. Construction permits will generally be issued to development projects that comply with all of the restrictions on land use, including town planning laws, building control laws, and environmental laws. An Environmental Impact Assessment report for the Project has been approved by the Office of Natural Resources and Environmental Policy and Planning as per letter number TorSor 1009.5/10759 dated 9 December 2011 and construction permit (Form KorThorMor.6) no. 37/2557 has been issued by the Public Works Department. Accordingly, it can be presumed that the authority has legally permitted the construction of the Residential Units in the Residences.
The Developer will establish The Chao Phraya Estate Fund, a trust fund whose purpose is to finance the future rental obligations upon the exercise of each of the Renewal Options. The beneficiaries of the fund will be the operators of the three components within the Project, including the Residence Management Company (defined below) as the operator of the Residences.
The Developer anticipates that the fund and the return from the investments would be sufficient for the exercise of the Renewal Options. Should the reserve fund not cover the cost for the exercise of any of the Renewal Options, such shortfall will be equitably and proportionately allocated to all the components within the Project, including the Residences, as determined in the trust deed of the fund and the Customers will be required to pay for the portion allocated to the Residences in proportion to the area of their Residential Units.
A Customer is required to enter into the following agreements:
- Agreement for the sale and purchase of the leasehold rights of the Residential Unit, which will be entered into between the Customer (as the lessee) and the Developer (as the lessor), and registered with the relevant Thai land registry office;
- Agreement for the sale and purchase of shares in the Management Company, which will be entered into between the Customer (as the purchaser) and the Original Shareholder (as the seller); and
- Rules and regulations for use of the common properties and facilities of the Residences (the “Rules and Regulations Agreement“), which will be entered into between the Customer and the Management Company.
(i) Leasehold Rights of Residential Units
The Customers will obtain the leasehold rights of their Residential Units from the Developer. These leasehold rights will be officially registered with the applicable Thai land registry office.
Once the land lease between the Landlord and CGD and the land sublease between CGD and the Developer, among other things, are renewed and properly registered with the relevant Thai land registry office, the leasehold right of each of the Residential Units will be renewed and registered with the applicable Thai land registry office accordingly.
(ii) Shares of Common Properties and Facilities Management Company
In addition to the leasehold rights to the Residential Units, the Customers will obtain shares of Chao Phraya Estate Residences Company Limited, a company established to manage the common properties and facilities of the Residences (the “Residence Management Company”).
The Residence Management Company will be initially set up with 100% of the total issued shares held by the Developer or the Developer’s designated entities (the “Original Shareholder”). The shares of the Management Company will be divided into two groups, namely:
(a) “Class A Shares”, being preferred shares equaling 51% of the total issued shares,
which will remain with the Original Shareholder to ensure that the Management
Company will be a Thai company for the purposes of the Thai Foreign Business Act;
(b) “Class B Shares”, being ordinary shares equaling 49% of the total issued shares, which will be sold to the Customers in proportion to the area of their Residential Units.
To provide the Customers with the control of the Residence Management Company, the Class A Shares held by the Original Shareholder are entitled to one (1) vote for every fifty (50) shares, while the Class B Shares held by the Customers are entitled to one (1) vote for every one (1) shares. Consequently, it will be the Customers who hold the Class B Shares that collectively have majority voting rights in the Management Company. This control helps ensure that the Residence Management Company’s management of the common properties and facilities of the Residences will reflect the needs of the Customers.