Hughes Krupica: Fake news and fake property promises

'Fake News' phenomenon
We are all susceptible to the issue of fake news. On news panel shows, participants have been found referring to fake news they have seen that day in an attempt to make a point, politicians have re-tweeted fake news, we have probably discussed fake news with our friends, not realizing the news we refer to is fake. This is a natural reaction to the greedy consumerism of all information without the correct use of testing sources, analysing neutrality or bias, fact checking and avoiding oft-used 'click bait' techniques that allow marketeers to charge their customers for your browsing activities.

Property news and 'trends'
I am very impressed with some of the new marketing techniques employed by property developers in Phuket, and more widely in Thailand. These days a property project, even un-built, can be presented through the eyes of drone camera footage showing every angle of the magic sea or mountain views and surrounds, 'Go Pro' style walking or quick time footage of walk throughs of the property, filtered Instagram snaps of people enjoying coffee and croissants and wheatgrass shots before posing for their yoga sessions.

A property project can now take on a Millenial style shallow, but attractive, personality of its own. You can find versions of the project in completely different formats on Facebook, WeChat and the website. There will be super wide highly enhanced photo images that draw you into your media device with HD gravitational pull.

This is the trend now. Property is being presented as all our consumer style goods and services are now being presented more perfect than it actually is.

Back to basics
What is not evident on any of these new platforms is the fundamental information that is of great importance to a property investment, in Phuket or elsewhere.

There is no sign in the video footage, or glossy photography, as to whether or not a project is legally compliant, or whether your property investment will be secure. I wonder how Instagram or another application would present the following:

1. Is the land title legal from when it first came into being, until now?
2. Does the property have legal registered access from each plot or property to a public road?
3. Are the companies selling the property properly capitalised and do they have cash in the bank?
4. How much of the project is leveraged by loan finance and is the level of financing sensible or speculative?
5. Has the developer complied with all local rules relating to zoning, height, built-area-to-green-area ratios?
6. Does the developer have a well thought-out asset management plan for the management of private property and common areas?
7. Is the form of legal ownership being offered suitable for you as an investor, and what risks are involved?
8. Are the sale and purchase agreements fair and balanced and will they ensure you are protected if there are an issues during development,
9. upon legal registration of your rights, and post completion?
   Has any rental programme been properly vetted for compliance with the restrictions and license requirements relating to letting property out for periods less than 30 days, including having regard to any requirements, if applicable, of the Hotel Act and any ministerial regulations such as those relating to the Building Control Acts?

The answers to these questions cannot be found on a ‘Lo-Fi’ filtered photo of a smiling model at a beach club with her hand in the air holding a mocktail in the other, nor in a “Perpetua” filtered photo of a water feature or statue next to an infinity edged swimming pool.

Let’s enjoy all the world has to offer, all the new presentations of information and material, but let’s still remain discerning and alert, while applying our intellect and conducting our transactions with appropriate caution and commitment to getting a deal done with our eyes – and camera lenses – wide open.

By Desmond Hughes, Senior Partner of Hughes Krupica.
Hughes Krupica is a law firm which specialises in Real Estate; Construction; Hospitality; Corporate; Commercial; Personal Injury; Dispute Resolution; and Litigation, operating in Bangkok and Phuket, servicing clients in relation to their business activities in Thailand and in other regions of Asia.
www.hugheskrupica.com