Published on June 27, 2005

New laws to fast-track sales of foreclosed assets are now in effect, including one allowing outsourcing of auctions.

New owners of non-performing assets can now remove the former owner’s name from the title instead of having to file a civil action.

The auction fee has been cut from 5 per cent of an asset’s value to 3 per cent.

Before inviting the private sector to become a part of the auction process, the Legal Execution Department will open a public hearing on July 18 to discuss how to set up the system.

“We want to set up a transparent system where the private sector can be the auction organiser,” director-general Kraisorn Barameeauychai said last week.

The department will also hold a seminar to introduce the new laws to the public on Friday at the Miracle Grand Hotel.

With the new system, the department plans to sell or dispose of at least Bt140 billion worth of foreclosed assets out of an inventory worth Bt215 billion this fiscal year.

The department succeeded in selling or disposing of Bt190 billion of foreclosed assets last fiscal year, with a return of 70 per cent on their real value. The success rate reflects their size – up to Bt10 million per asset.

Sales this fiscal year would continue downward because properties located in prime districts – downtown Bangkok and major cities such as Phuket, Chiang Mai, Pattaya and Rayong – have already been cleared out. Also, the remaining properties are mostly smaller than Bt10 million.

“Prices of foreclosed assets are still 30 per cent under market on average, so auctions have continued to attract bidders, especially developers and homebuyers,” Kraisorn added.

Somluck Srimalee

The Nation

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