PHUKET: A report in the Sydney Morning Herald (SMH) claiming that more than 40 owners of luxury homes at a residential resort property in Phuket face eviction* has been refuted by the developer as a distortion of the facts.
In a statement to Bangok-based Property Report, Andy Street of Tawan Properties, the developer behind the luxury homes in Chom Tawan, denied that homeowners would be evicted later this month.
A Thai court has authorized a public auction of the resort homes at Chom Tawan, if the loans taken out by Tawan Properties are not repaid to the Industrial and Commercial Bank of China (ICBC) by December 17.
“The date… related solely to the deadline agreed with the bank to agree payment terms and does not mean that the bank will automatically take further action if no agreement is reached by that date,” Mr Street said in his statement posted on Property Report’s website.
However, some homeowners at Chom Tawan are concerned.
Daryl Davies, 70, a retired commercial pilot from Melbourne bought his luxury home at Chom Tawan seven years ago and paid approximately 14 million baht for it.
He told the SMH that residents began to learn that there was a problem with the property’s financing two years ago when they were issued notices stating that a Thai manufacturer had not been paid for supplying appliances to the development.
“We were shocked,” Mr Davies said. “We started investigating what had happened, but it only got worse, much worse.”
Since then, Tawan Properties has been giving Chom Tawan residents the run-around, Mr Davies said.
“The company kept telling us everything is going nicely. It’s happening, don’t worry, but it went on and on,” Davies said.
While admitting that restructuring is needed and the loan is due for repayment, Mr Street denies he is leaving the owners out in the cold.
“I still intend to deliver all that the buyers require… The outstanding issues are the mortgage repayment to the bank and the remaining payment to the builder, where a draft agreement has been issued to resolve this outstanding matter. Within weeks of this date [December 17], there will be firm plans to bring this debt restructuring to a conclusion,” said Mr Street in his statement.
Mr Street was also candid about the company’s financial difficulties during the development of the project.
“Like so many development companies in Phuket, indeed globally, Napawan Asia [the project development company set up by Tawan] was over extended commercially at the commencement of the Global Financial Crisis… Whereas buyers in other developments have lost everything without a property being built, my partners and I at the time did not take the easier option available,” he said.
While residents at Chom Tawan are unlikely to face immediate eviction on December 17, Mr Davies said the future for residents’ homes felt far from secure.
“[If the court rules the company to be dissolved through receivership]… the bank [ICBC] has the right to seize the assets – the property of the defendant, Napawan – and that will lead to an auction, and from the proceeds of the auction the debt to ICBC and the builder will be satisfied,” said Mr Davies.
“There will be a new owner, of course, whoever it is who buys it, and since there is a new owner – it will be his property or her property – the present occupants will be invited to leave.”
However, Mr Street believes that the majority of Chom Tawan’s buyers are still supportive of his company’s attempts to reach a settlement with the bank.
“Napawan Asia are working with the buyers with the bank’s consent to achieve a debt restructuring… The essentials of the deal are that the construction company will receive a title, to land elsewhere on the island that Tawan owns, to cover their debt, which will then allow the bank to enter into a deal with the owners to clear the remaining debt and receive their titles. Concurrently, Tawan will enter into a deal with the owners to repay the debt from its other business activities,” he said.
Mr Street’s statement to Property Report did not elaborate on when the owners would receive their title or at what point the bank would enter into a deal with the owners to resolve the remaining debt.
* The original story inaccurately stated that the Sydney Morning Herald had alleged in its story “Eviction threat for Australians who put life savings into Thai dream homes” that the evictions were “imminent”. The error is regretted.
— Renford Davies