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Condo mismanagement reduces resale values and rental returns…and can kill you!

                Condo mismanagement reduces resale values and rental returns....and can kill you!

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We've all seen the cigarette boxes with their warnings signs on them placed there by the Food and Drug Administration (FDA) helping us to protect ourselves from the harmful effects of smoking. Warnings such as the effects smoking can have on an unborn fetus, or the risks of us getting throat cancer or lung cancer. These valuable warning signs by law have to contain the word 'can' e.g. 'Warning: Smoking cigarettes can cause lung cancer', yes we know for legal reasons they have to use the word 'can', but almost all of us who are sensible enough, realistic enough and are experienced enough to witness at least one smoker contract cancer and unfortunately be taken away before their time, know that the word 'can' in this case means 'probably will'!

In the same light, we think that some condominiums in Bangkok should contain these types of warning on them. We regularly witness poor Juristic Management practices that are far from benefitting the residents of the condos, but in fact detracting from their lifestyles and reducing the desirability and therefore resale and rental values of the condos within, and even putting their lives at risk!

An obvious example is in the Sukhumvit area of Bangkok, Emporio Place. The management of both these condos are independently and systematically destroying and reducing the value of the condos they contain. Before we discuss this heinous examples, let's just clarify what poor Juristic Management of a Bangkok condominium can mean.

The obvious ways in which a Juristic Management team can reduce the value of a condominium and the units it contains are such as: not cleaning the pool; not keeping clean grounds and gardens; not providing good up-keep on lighting fixtures; allowing machinery such as elevators to become unworkable etc.

These are obvious problems and blatant mismanagement, but the advantages for the owners of the units within such badly managed condominiums are that these problems are easy to see. Also this is an advantage for any potential tenant or buyer coming to view the condos. A quick look at a green slimy pool or an elevator not working (again) or a dirty corridor, will allow the potential tenant or buyer to look elsewhere without inconveniencing himself in signing a contract he will soon want to get out of.

However the acts of mismanagement at The Emporio Place are far worse than these relatively minor problems. And the reason why they are worse is that they are more difficult to see, are life threatening and the management teams fully support their own mismanaged policies.

The Problems

The problems at The Emporio Place involve elements of health hazard and danger, and both will reduce the value of the properties inside the building they are mismanaging.

  1. The Emporio Place – managed by CBRE, this condo contains 3 buildings, North, East and South Towers, also known as A, B & C. Recently the CBRE management team have started closing one of the main access doors to the whole compound and THE main pedestrian access to the South Tower from the hours of 10pm – 6am. This is in the rather lame and lazy excuse of 'security'. This policy therefore imposes a curfew and inconveniences the residents of the South Tower and has knock-on effect for those residents in the North and East Towers, who do not drive and therefore enter the complex on foot.

    This policy is therefore greatly detracting from the desirability of living at The Emporio Place for those who do not drive a car. As will be seen below, this policy will therefore reduce the value of the properties, not only in the South Tower, but also the North and East Towers.

Pedestrian residents of the South Tower are now forced to either:

  1. Not go out after 10pm, or make sure they are back in their homes by 10pm. Basically a curfew!

  2. Walk through an access way built for vehicles. This access way contains 30-40 degree ramps and is totally unsuitable for access by foot. Especially for the old, weak, disabled, pregnant or ill. In fact this could easily create an injury or worse death if a fall occurred, e.g., If a pregnant lady fell whilst walking up one of these badly lit and very steep ramps in the pitch dark, then who knows the fate of her unborn baby?

Are there any solutions?

Yes indeed there are, and they are inexpensive, easily imposed and realistic. In fact they are so realistic they are the solutions that many other Bangkok condominiums use, even ones that are far less luxurious than The Emporio Place. Here are a few of them:

  1. Place another Security Guard on the door to make sure that the 24 hour access (which is via electronic key-card already) is administered securely.

  2. Place a loud buzzer on the door, which would sound when the door is open, to make sure that all residents using the door remember to close the door after themselves.

  3. Place an extra CCTV camera overlooking the door, so that the Security Guards monitoring the door can make sure it is secure 24hrs a day and used correctly by residents.

  4. Place an inexpensive rubber stopper in the terracing near the door so that the door only opens approximately 60 degrees, this would make it easy for the residents to access in and out of the complex, but would also make sure the door swings closed on to its magnet, so it was 100% secure, 24 hours a day.

Why aren't these solutions imposed?

We have no idea! We know that residents have contacted the Juristic Office suggesting these ideas. We know that emails have been written stating and explaining the ideas. We know that CBRE's Head Quarters have been contacted, and again the suggestions and ideas have been ignored!

We know that some residents have asked to have a meeting with members of the Residents Committee to explain the solutions, and have been refused to even contact them. The Residence Committee probably don't even know there are residents complaining as CBRE's management team force a blockage in the system.

It seems the level of CBRE's customer service in a matter such as this is to ignore the customers (after all the residents employ the Juristic Managers through their Residential Fees) and hope that they go away!

In life there are often good examples of how a situation will manifest itself if it is allowed to continue, and the mismanagement at The Emporio Place has previously been acted out at an older building the WittayuComplex.

In fact the writing is so clearly on the wall, that some of the more astute owners at The Emporio Place are now putting their condos up for sale prematurely to their original plans, as they do not want to suffer the same fate of the owners of the Wittayu Complex.

And we also understand that some of the current tenantsofTtheEmporio Place have already started contacting their landlords and landladies in regards to a rental reduction or a premature termination of their contract as they did not sign up to live in a condominium with obstructed pedestrian access or have a curfew imposed on them. As a website looking out for consumer interests in the Bangkok Real Estate market, we fully urge and encourage these efforts – the consumer should be compensated!

These so far small examples will of course increase greatly once word of these problems becomes increasingly well known and residents start talking amongst themselves.

Final Word

It is clear and easy to see the writing is on the wall for owners of The Emporio Place, they have been highly unfortunate in buying into a condominium that has been heinously mismanaged by CBRE, and as more and more potential buyers and tenants learn of the access problems the resale value and rental values will diminish.

It is easy for CBRE to point to the Residents Committee and blame them, after all they impose the security policies, but this is an easy and inexcusable way to pass the blame. CBRE are an experienced company and should be there to advise the Residential Committee members on their policies, after all the members of the Residents Committee are mostly not professional Real Estate people and will therefore perhaps not be able to appreciate the bigger picture until it is too late. It seems however in the case of The Emporio that CBRE has let itself down and employed inexperienced, naïve or even incompetent staff to manage over The Emporio Place. It is a shame, as they will now drag their good name down.

However the real victims of this terrible example of incompetence will be the owners and current tenants who will have to put up with these malpractices of mismanagement and will suffer through their reduced living conditions, will ultimately suffer financially and perhaps the odd few will suffer through injury or even death!

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