Property Wolfpack Menacing the Market

Posted: 11 Jun 2011 | 6:00 am

For many children Little Red Riding Hood and all the other tales of the big bad wolf remain etched in their psyche fort lifetime.

These children grow into adults and become buyers of resort property and as with the three little pigs, all that huffing and puffing and imminent peril of the house being blown down is the very stuff homeowners' nightmares are made of.

The biggest fear of these little red riding hoods is the wolf in sheep's clothing being a greedy developer taking buyers' money but not delivering the product.

Over the years I have written about the Phuket property scene. I have found that most developments have happy endings, or at least no nail biting or hair pulling. There are many cases of buyer remorse, epic conflicts and troublesome market conditions, but for the most part things turn out okay.

That said, there are a growing number of cases that raise the hairs on the back of your neck. Stories akin to packs of wolves chasing little red riding hood deep into the tropical jungle and feasting on her corpse. Ugly, but true.

Many people watching the Phuket property scene wonder how some fairly shady characters have remained out out of jail and many of the stories never get the reporting they deserve.

Truth be known, the ability to bring these people to justice is one key factor, given the potential financial and even criminal consequences for the media, and specifically journalists.

There is not a news outlet I know of that does not carefully consider publication of these types of investigative stories. And don't blame Thailand.

Consider the journalists being bashed and battered in Egypt or the WikiLeaks saga as just two examples. Another key factor is the huge gray area involved in foreign-dominated sectors. Precisely like the environment that property ownership is forced to operate in. The current lack of reforms in the sector doesn't help. Not everyone wants to live in a freehold condominium. Many buyers prefer homes or villas.

So you can say where there is a will, there's away, and that as long as buyers and sellers continue to cohabit common terrain the limited barriers to wolves leaves a foregone conclusion.

In so many instances, highly intelligent people get caught up in holiday mode and buy property without even a clue about what they are paying for - no due diligence, no legal representation, no checking of the developer's track record or even consideration of the current market realities.

It's impossible to blame those taken advantage of, but it does take two to tango, and perhaps some dance lessons before entering the fray might be prudent.

All too often buyers go to lawyers when it's too late, realizing the developer has mortgaged their land, or did not own it in the first place or never had capacity to build their property despite full payments being made.

There has been an uptick in sob stories since the global market slumped and Phuket flattened. Now legal firms, who once were content with transactions, bring on the litigation or dispute-resolution teams.

And those rouge developers who thankfully represent a fledgling minority, perhaps that little thing called karma may be something they need to keep an eye on in the rear view mirror.

Wolves and red riding hoods look set to cohabit our island for years to come, and all the huffing in the world won't change that.

While for the most part Phuket's property trade works well, in some unfortunate cases it simply fails to deliver. Did I just hear someone knocking at my door?

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