Buyers who want homes in a Thai paradise are being scammed. Expatica Germany looks at what is being done to stop con artists and a German couple that were duped.

Ferdinand Krenz, 59, and his wife Karin, 58, visited Hua Hin as tourists, fell in love with the Thai beach resort and decided to spend their retirement years here rather than in cold Wuerzburg, their home town in Germany.

"One of the reasons we came here is because the king has a residence here," said Krenz, a retired German army officer.

Hua Hin, situated 130 kilometres south of Bangkok, has a unique history as a royal getaway.

Thai King Prajadhipok, Rama VII, built his "Klai Kang Won" or "Far From Worries" palace in Hua Hin in 1928. Thailand's current monarch King Bhumibol Adulyadej, 80, an avid sailor in his younger years, has always spent part of the year at the seaside royal residence.

Over the decades, the resort has become a favourite summer retreat for Thai high society and more recently has drawn a plethora of world-class hotel chains and posh boutique getaways.

Tourists attracted to Hua Hin tend to be the family set, or middle aged couples, a distinctly different crowd than those drawn to Thailand's more raucous beach resorts such as Pattaya, notorious for its wild nightlife.

In recent years, many former tourists have opted to buy a home in Hua Hin, as Thailand's property boom extends to its resorts, angling for foreign buyers of second homes or retirement getaways.

Unfortunately, some of these paradise seekers have fallen victim to scam artists and con men, and Hua Hin has proved no exception.

A popular hang-out for the disgruntled foreign retirees of Hua Hin is the small office of Tuck Dechapanya, owner of the Hua Hin Hotline newspaper and founder of the Hua Hin Foreign Service Link Centre.

Tuck, a spry 79-year-old Hua Hin native, has become a beacon of hope for foreigners who have been defrauded by dubious property developers, most of whom are foreigners.

The most popular scam is for developers to secure a deposit from a buyer and then fail to abide by the construction timetable, citing unforeseen delays.

Unfamiliar with Thai laws, and wary of long drawn out court cases in a foreign land, many victims have approached Tuck for informal advice in the hopes that he will publish their plight and attract the attention of Hua Hin authorities to the scams.

"This is the king's residence," said Tuck. "I am upset by this business. I think Hua Hin will be worse than Pattaya if we don't do anything."

Things are slowly being done. On February 20, a provincial court denied bail for Italian national Mario Karmine Aiello, developer of the Golf Village housing estate, and forced him to swear he would complete his obligations to 13 foreign complaints who charged him with failing to fulfill his contract, leaving their properties without roads, utilities and registration papers.

Aiello was released on bail five days later. His case is just one of many pending.

"We've been waiting for two years and still our house isn't finished," said Krenz, who sold his house in Wuerzburg to invest in a 6 million baht (187,500 dollar) property at Orchid Villas, developed by British national David Allan McDonald.

"McDonald is just using our money to re-invest in other projects," said Krenz, sitting in Tuck's office.

It is a common tale now in Hua Hin.

Donald Whiting and his wife Dolly Samson sold their home in Hawaii to invest in a 13.6 million baht (425,000 dollar) villa in Hua Hin, complete with guest house, tennis court and swimming pool.

The American couple claim that Greek national George Mastronikolis, a building contractor who also runs the Hua Hin Today newspaper, took their money and left them with an unfinished, sub-standard concrete monstrosity instead of the Thai-Bali style mansion they had dreamed of.

"This is a nightmare story," said Whiting. "No foreigner should ever get involved in coming here."

Mastronikolis denied involvement in the project, claiming it was his former partner Aiello's deal.

"There are some problems here," acknowledged Mastronikolis in an interview with Deutsche Presse-Agentur dpa. "Last year there was a slow down in sales and many developers didn't have the finance to continue a project, because their finance is based on new sales, so they stopped building."

In most countries, such building practices would constitute fraud. But not all property developers in Hua Hin are of the fly-by-night variety.

Germany-based Engel & Volkers, for example, opened an office in Hua Hin last year and has been doing a booming business selling high-end projects where housing units cost between 10 to 90 million baht (312,500 to 2.8 million dollars).

"If people follow the rules and regulations it should be no problem," said Duangjai Kraus, managing director of Engel & Volkers Hua Hin. "But some people want to take advantage of others. That's where the problems crop up."

Duangjai noted that last year the Thai government passed a new law on allowing escrow accounts, designed to protect property buyers from unscrupulous developers by assuring contracts are met before the money is issued. "Hopefully the law will be enacted soon," said Duangjai.

April 2008

DPA with Expatica