Due Diligence is a general term used to describe the research and analysis carried out by a reasonable person in preparation for a business investment. This means taking extra precautions to avoid risks and liabilities.
Property Due Diligence in Thailand involves a physical inspection of the land as well as examining all legal documents involved. This includes checking the land title deed and evaluating building construction permits. It also checks for usufructs and servitudes such as a gas pipeline servicetude.
The property buyer needs to know what they are buying, and this is usually done by performing a visual inspection of the land or property. This involves checking the copies of the documents attached to the land or property and conducting a land title search at the land office.
A reliable charted surveyor will also check for land encroachment and other related issues. This is especially important for land or properties that have been sold off plan. For instance, the developers might have registered a servitude for a gas pipeline or power cables across the land. This needs to be checked in order to avoid any future complications such as having to pay for a liability insurance cover.
Moreover, the person conducting the due diligence should also conduct a legal background check on the developer such as reviewing the company registration date and shared capital; changes in the company name within three years; registered rights against the land; land taxes paid or to be paid and earlier transfer dates, etc.
When buying land, houses or condominiums, it is important to check the ownership title deed and government permits. A reputable property lawyer in Thailand can assist you with this due diligence process. They will verify the seller’s identity and review their past transactions. This ensures that the seller has a valid and clear title to sell you the property and that they are not hiding any debts or other liens on their land.
They will also check the building permit and zoning laws. They can also help you to assess the developer’s background, especially if you are planning to buy off plan. There are many fraudulent dealers and developers out there that will take your deposit and then not build the project.
In addition, they will check whether the development encroaches on government land or is in an area that may be subject to future expropriation. They will also verify that the contract drafted by the seller is correct and free of any hidden costs or drawbacks.
Visit the Land Office
A visit to the land office is an important part of property due diligence in Thailand. This step ensures that the land description in the title deed matches the record held by the local land office. It also checks that the seller owns the land and has a legal right to sell it. It also examines any encumbrances on the land such as usufructs and servitudes (e.g. gas pipeline servitude).
It will also verify that the property is within zoning laws and has a building permit. If it does not, the buyer could be subject to fines from the local government. This is a key part of lowering the risk of an investment in Thailand. The comprehensive checks done in property due diligence can save investors from being scammed and losing money. They can also avoid expensive and time consuming litigation down the road. It is a process that will protect an investor’s long term interests in their place in paradise.
When investing in real estate, due diligence is an essential step. This involves a thorough inspection of the property as well as investigating all legal documents associated with the sale. Due diligence also includes evaluating the seller’s reputation and financial statements.
This is especially important in Thailand, where land ownership is complicated. In addition to a physical inspection, property due diligence requires researching the title deed and checking for liens or other attachments on the property. It’s advisable to hire a lawyer who is familiar with Thai property laws.
Besides the title deed, you should also check the initial environmental examination (IEE) and building construction permits. If you’re buying off plan, make sure the developer has enough money to complete the project before you make a payment. Otherwise, you could find yourself in a difficult situation. Acting with due diligence can save you from unnecessary legal problems.