SI have heard from those in the know that up to 99 percent of Pattaya condominiums cheat their owners. Personally I don’t think the figure is quite that high, but I do know many condominiums in my area have successfully ripped off their owners by embezzlement, by charging outrageous amounts of repairs or both.

I need to oversee the interests of our condominium owners. This is my job. Therefore it is my business to know how Thai employees rip off condo owners and to do my utmost to see that this does not happen here. This is part 1–embezzlement.

How Pattaya condominiums cheat their owners.   Avoiding Embezzlement 

Lesson 1: Suppose I ask all of you a single question? You live in your home country, whether it’s in the United States, Germany, the United Kingdom, Australia or wherever.   Would you leave $50,000 lying around in your home in full view of a new girlfriend you had just picked up.  From a bar, at Walmart or in the supermarket?

If you are a rational adult you certainly wouldn’t for several reasons. First, you haven’t known the woman for a long enough period to be able to make an informed opinion as to her character.  Second–fifty thousand dollars is a large enough sum to tempt a large amount of people you might meet into crossing the line.  Third, given that your new live in girlfriend is fundamentally honest with small amounts of money.   Fifty-thousand dollars is a large enough sum to make her reconsider the price of her integrity. The bottom line is you simply wouldn’t leave $50,000 lying around your place for the easy taking.

So if this is true back in your home countries, then why would you ever allow your condo office employees such easy opportunity in Pattaya?

Especially when Pattaya has the seedy reputation it so richly deserves? With the huge discrepancies between what your typical office employee makes in a country such as the United States and Thailand allowing the condo manager or secretary to collect  even 300,000 baht amounts to the same thing as leaving $50,000 lying around your home in the West.

The solution is to completely remove the temptation by making it impossible for your office personnel to collect large sums of money  from your condo owners.

You simply require all condo owners to pay their maintenance fees and utility bills through direct payment to your condominium bank account.

As the old saying goes, there’s nothing like putting and keeping the money in the bank.  You can require condo owners to pay direct deposits to the  condo bank account.  They can deposit funds in person , through internet banking or by ATM.

Paying by ATM Is easy because all your owners have to do is to key in the condo bank account and the amount of the invoice one is paying. A confirmation then appears on the ATM screen that indicates that it is the condo bank account after all.  The ATM then produces a receipt.  The condo owners can now bring the receipt to the condo office girl as proof of payment.

Not only does this stop embezzlement at the source, it also can make a vast improvement in your condo’s cash flow.   We did it here at my condo under my direction and it worked like gang busters.  Try it, and if someone doesn’t like it tell him to stick it where the sun doesn’t shine.

Lesson 2. Do not trust a Thai “professional auditor” or CPA to uncover the embezzlement in your condo.

Thai authorities require a yearly audit from all condo communities.    From my understanding of Thai law such audits are geared around profit and loss.  In my experience authorities consider the condo’s own balance sheet to be of no consequence.   Provided that the condo has accurately recorded all deposits and invoices accurately recorded.

My own condo uses  accrual accounting.  This means if a condo invoices a condo owner a 20,000 baht maintenance fee this 20,000 is counted as income.   Even if the condo owner’s deposit at the office is never made at the bank.

The balance sheet never shows the 20,000 baht deposit.  Because the 20,000 baht never made it to the bank.

But this 20,000 baht appears in the condo profit and loss statement. Because it is assumed that the condo owner will pay.

But suppose the condo manager or office girl steals the 20,000 baht and then records it as  paid?

She then gives the condo owner a receipt. He’s satisfied now that he’s been given a receipt for paying his bill.

So accounting wise what happens to this 20,000 payment?  It belongs into an account that is called Undeposited funds.  On the condo books the condo office has collected it from the condo owner. So one might think that it now resides in the condo safe to be later deposited at the bank.

The reality is that oftentimes the  office girl or manager uses  such undeposited funds for a month, or even for a much longer period of time.

I have personally examined our condo’s books which showed 441,000 in undeposited funds.

No one knew where the undeposited money went. But it sure didn’t land in the condo’s bank account. As for the professional audit, I doubt if the auditor even  looked our condo’s balance sheet because the audited balance sheet showed exactly 441,000 baht less what it actually was.

Lesson to be learned here is that the Thai auditor’s ignoring our undeposited funds and our own internal balance sheets  was an open invitation to theft.

Lesson 3. Get a good accounting software program like Quickbooks and use it.

Especially Quickbooks. It might be difficult to buy a fully licensed copy of the software here in Thailand.  This is because foreign credit cards are usually not accepted by Intuit, the company that offers Quickbooks.

I bought a licensed copy of Quickbooks for my own condo using my U.S. credit card.  Then our condo office reimbursed me.

And…Quickbooks is in English so it might be difficult for your office personnel to learn how to use it.

The solution is if your office personnel deal with Quickbooks in English to fire them and hire people who can

Lesson 4. Make sure that at least one member of your condo committee understands how to use the software

and that he can teach your office personnel how to use it. Our manager and office girl have been highly successful at learning how to use the software which has paid for itself many times over.

Lesson 5. The condo owners must be supportive of the committee and the manager

unless the committee members or manager is not doing their job properly.  Owners must realize that their condo community is not a Democracy. It is a Republic.  In which the condo owners elect those owners they want to serve on the committee.   Then they must let their duly elected committee do its job. If it is not doing its job properly it can then elect a new committee at the next general election.

My study of History tells me that true Democracy came to us from Athens in Greece over 2,000 years ago.  Ultimately it did not work after a couple thousand citizens all started interrupting each other.  All of them shouting and carrying on until pandemonium reigned.

Recently I learned from a condo owner that his condo community has gone through five committees due to condo owners thinking they were more important than committee members.

Selfish owners owners threatened lawsuits against committee members.   And the girlfriend of an arrogant owner even beat up a well qualified manager.  While the owner backed his girlfriend.  Because he felt his girlfriend was the condo queen bee.

Lesson 6–Condo Committee members need to pay attention.  Most of the time they don’t.

They need to actually work at doing a good job.  This means checking the accounting of the condo’s finances, and getting to know their fellow condo owners. They should know who pays his bills on time and who isn’t.  And if whether or not the condo office has credited those who do  in the condo’s accounting system.

Lesson 7–Here in Pattaya it oftentimes pays to be an embezzler.

When is the last time you ever heard of a Pattaya condo manager or office girl who has stolen a condo’s money actually having to do jail time for her crime?

Probably never.  For one thing once an embezzler runs off with the condo owners’ money she’s likely to disappear to Bangkok.  Or to Rural Such a Toni.  Her family and fellow Thais are likely to cover for her since embezzlement is not typically viewed as a serious crime here.  And if anyone does not believe me consider this

A. Even if the office manager is caught stealing, and she is apprehended by the police.  And she does serious jail time after being convicted of a crime.  And one of the condo owners publicizes she is a thief,  she can sue him.

She’s going to win for defamation.  This is due to her losing face even though she’s a criminal by Western standards.

B. The police will usually not arrest her anyway. Instead they will offer her the chance to pay back what she has stolen.   But she will then say that she will try.    In the end the condo owners will not be able to force her to pay.

C. The high cost of litigation.  Recently a reliable Pattaya law firm told me that our condo wound have to pay it 160,000 baht just to start criminal court action against an embezzler.

But it would take at least one year for the court to start proceedings. And that there would be little chance for success most of the witnesses would  be unavailable due to their having to be back in their home countries, etc.

In our own condo I’ve found most owners to be totally selfish.  They expect committee members and managers to do everything for them.  But they’d never go out of their way to be witnesses in such a lawsuit.

The same law firm told me that it would cost 120,000 baht just to start a Civil Court case against the embezzler.

In a nutshell here in Pattaya you get to steal and collect the rewards of your theft but you don’t have to suffer any of the consequences.

You can even get an office job similar to the one you have just left because so many Thai companies never ask for references or inquire of a prospective employee, “What have you been doing with the last few years of your life?”  Employers are fearful of saying anything negative about their past employees.   Because they rightfully fear defamation lawsuits.

Here it’s all smoke and mirrors. It’s the land of make believe and a real Disneyland for adults. Nevertheless it is possible to get good employees.  But this is highly unlikely unless you pay very close attention to the fact that this isn’t the West.  And that  most Thais do not value Western values .

Pattaya condominiums cheat their owners part II