Homeowner Refuses to Pay Common Area Fees? What Can a Juristic Person Do Before Filing a Lawsuit?

The reality is that homeowners who fail to pay common area fees can legally be sued. However, initiating legal proceedings immediately is not always the most effective solution. This article explains the options available to a juristic person before resorting to litigation, as well as the proper procedures to follow.

What Happens When a Homeowner Does Not Pay Common Area Fees?

Common area fees are used to maintain the shared facilities and infrastructure of a housing development, including swimming pools, elevators, security systems, landscaped gardens, and other common areas.

When multiple homeowners fail to pay these fees, the consequences extend beyond increasing outstanding debts. The financial shortfall directly affects the quality of life for everyone living in the community.

In housing estates, unpaid fees can reduce the budget available for maintaining roads, street lighting, and security services. In condominiums, overdue common area fees may delay essential maintenance of elevators, fire protection systems, and other critical facilities, potentially affecting resident safety.

Non-payment also creates an issue of fairness, as homeowners who pay on time ultimately bear the financial burden created by those who do not.

What Can a Housing Estate Juristic Person Do Before Filing a Lawsuit?

Before taking legal action, a juristic person should follow a structured collection process. In addition to complying with legal procedures, these steps often increase the likelihood of recovering the outstanding fees without having to go to court.

Always Send Formal Payment Reminders First

The first step is to issue an official payment reminder. In some cases, non-payment occurs simply because the homeowner forgot to pay or never received the invoice.

Sending at least two formal reminders, both by registered mail and through digital communication channels, helps reduce the possibility that the homeowner can later claim they were never notified.

Maintaining clear records of these reminders is also extremely valuable if legal proceedings become necessary, as they demonstrate that the juristic person made reasonable efforts to resolve the matter before filing a lawsuit.

Apply Late Payment Penalties in Accordance with the Applicable Regulations

A juristic person has the legal right to impose late-payment penalties for overdue common area fees, provided that the penalties comply with the applicable laws and governing regulations.

For housing estates, the maximum penalty is 10% per annum of the outstanding balance.

For condominiums, Section 18/1 of the Condominium Act permits a late-payment penalty of up to 12% per annum for debts outstanding for no more than six months, and up to 20% per annum for debts that remain unpaid for more than six months.

It is essential that penalties are calculated strictly in accordance with the applicable regulations and the project's governing documents. Charging penalties beyond what is legally permitted may weaken or jeopardize the juristic person's position in any subsequent legal proceedings.

Maintain Complete Supporting Evidence

This step is extremely important but is often overlooked. Proper record-keeping means maintaining clear documentation of the outstanding balance, when the debt first became overdue, when payment reminders were sent, and whether any response was received.

Juristic persons that use an online property management platform can keep all of this information in a single, centralized system, making it readily available as supporting evidence should legal proceedings become necessary.

Filing a Restriction Request with the Land Department Before Initiating Legal Action

After gathering all necessary evidence, housing estate juristic persons should consider taking an additional precautionary step by filing a restriction request with the Department of Lands before commencing legal proceedings.

This measure helps prevent the property owner from transferring ownership, selling, or mortgaging the property while legal action is being prepared. It serves as a proactive safeguard that helps preserve the juristic person's right to recover the outstanding debt. If ownership is transferred before appropriate action is taken, debt recovery and enforcement may become significantly more difficult.

The documents typically required when submitting a request to the Land Office where the property is located include:

• A statement of outstanding common area fees
• Copies of payment reminders and formal demand letters
• Records of communications with the homeowner
• A meeting resolution, if applicable

When Should a Juristic Person File a Lawsuit for Unpaid Common Area Fees?

The decision to initiate legal proceedings depends on several factors. In general, legal action should be considered when the juristic person has made multiple attempts to collect the outstanding fees, yet the homeowner either fails to respond or refuses to make payment without a reasonable explanation. It may also be appropriate when the accumulated debt begins to affect the project's operating budget.

Signs That It May Be Time to Begin Legal Proceedings

• The homeowner has failed to pay common area fees for more than six months without responding to collection efforts.
• The homeowner has communicated with the juristic person but refuses to pay without a valid reason.
• The total outstanding balance, including late-payment penalties, has grown to a level that adversely affects the management and financial stability of the project.

In the case of a condominium, when a lawsuit is filed to recover unpaid common area fees, the court will consider whether the condominium juristic person has followed the proper legal procedures. Therefore, maintaining complete documentation and following the correct process from the outset can significantly strengthen the case.

Recovery of Unpaid Common Area Fees in Housing Estates

For housing estates governed by the Land Allocation Act, the housing estate juristic person has the legal right to file a lawsuit to recover unpaid common area fees. Before initiating legal proceedings, the lawsuit should be supported by a resolution of either the Juristic Person Committee or the General Meeting, as required.

Cases of this nature are generally classified as consumer cases and must be filed with the court that has jurisdiction over the defendant's place of residence. One advantage of consumer cases is that court filing fees are generally not required in advance, allowing housing estate juristic persons to pursue debt recovery without incurring substantial upfront litigation costs.

For juristic persons that prefer professional assistance, specialized debt collection and legal services are also available to manage the entire process of recovering overdue common area fees, including litigation when necessary.

The typical process includes the following steps:

• Collect all records of outstanding balances together with copies of every payment reminder and demand notice.
• Prepare a detailed statement of the outstanding debt, including any late-payment penalties calculated in accordance with the applicable bylaws.
• Issue a final formal demand letter before commencing legal proceedings.
• File the statement of claim with the court that has jurisdiction over the defendant's domicile.

Statute of Limitations for Claims to Recover Common Area Fees

One of the most common questions raised by juristic persons is how long they have to file a lawsuit to recover unpaid common area fees.

Under Section 193/33(4) of the Thai Civil and Commercial Code, the statute of limitations for claims relating to common area fees—whether for a housing estate or a condominium—is five years.

The five-year limitation period is calculated backward from the date the lawsuit is filed. This means that any outstanding fees that became due more than five years before the filing date will generally be time-barred and can no longer be recovered through legal proceedings.

For this reason, juristic persons should avoid allowing unpaid fees to accumulate until they are close to the limitation period. The longer the delay, the more difficult it becomes to gather supporting evidence, and the homeowner may raise the statute of limitations as a legal defense.

Common Real-World Scenarios

The following examples illustrate how juristic persons may respond when homeowners fail to pay common area fees, and how different approaches can lead to different outcomes.

Condominium Case in Bangkok

A condominium owner failed to pay common area fees for more than 18 months. The condominium juristic person issued several written payment reminders but received no response. It ultimately filed a lawsuit to recover the outstanding fees and prevailed because it maintained complete documentation, including demand letters, communication records, and detailed monthly statements of the outstanding balance.

Housing Estate Case in a Suburban Area

In another case, several homeowners in a housing estate accumulated unpaid common area fees over a number of years before the juristic person decided to take legal action. As a result, multiple lawsuits had to be initiated simultaneously.

This example demonstrates that delaying enforcement can significantly increase both the complexity and the cost of legal proceedings compared with addressing payment defaults at an earlier stage.

Typical Contents of a Statement of Claim for Unpaid Common Area Fees

A standard statement of claim for recovering unpaid common area fees generally includes the following key elements:

The following documents are generally required when preparing an initial legal claim:

• Certificate of Juristic Person Registration
• Registration records showing the appointment or change of committee members or the juristic manager
• House registration and national identification card of the property owner
• The juristic person's regulations or bylaws
• Condominium Unit Ownership Certificate (Or. Chor. 2)
• Formal demand letter requesting payment, together with proof of EMS registered mail delivery
• Statement summarizing the outstanding debt balance

Failure to pay common area fees in a housing estate or condominium should not automatically result in legal action, but it is also not an issue that should be ignored. The key is to establish an effective management system from the outset—one that sends timely reminders, maintains complete records, and helps determine when it is appropriate to escalate the matter.

Silverman.app provides an all-in-one solution for juristic persons, including automated debt collection with reminder notifications and comprehensive record-keeping, automatic calculation of late-payment penalties in accordance with the applicable bylaws, and outstanding balance reports that can be used as supporting evidence in legal proceedings.

When every step is managed systematically, the path from payment reminders to successful debt recovery becomes much more efficient.

For more information, call 08-1442-6888 or 06-5579-6844, or contact us through our Line Official account.