Due Diligence on Thai Property Purchase

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Due Diligence on Thai Property Purchase

By: Magna Carta Law Office

 

 

Investing in real estate certainly involves a huge amount of money. We cannot deny the fact that there are some fraudulent dealers and developers taking advantage of naïve investors who can easily get victimized with unscrupulous deals. Therefore, investors are advised to take extra precaution before finalizing any transactions. Due Diligence is a useful tool for estimating the status of a prospective project and the developer.

 

Due diligence is the research and analysis of a company, organization, or an individual done in preparation for a business transaction or investment. A reasonable person takes extra precaution before entering into an agreement or a transaction with another party to prevent unnecessary harm as the procedure helps to identify potential risks and liabilities. Due diligence serves to confirm all material facts and legal parameters with regards to a sale or acquisition by investigation and evaluation of a potential investment.

 

The failure to conduct necessary precautions usually results in terrible consequences such as serious financial and legal distress on the part of the buyer. It must be remembered that almost always after all the transfer has been done, the seller will not hold responsibility for problems the buyer did not discover.

 

Important Factors to Consider In Carrying Out Due Diligence

  • It is necessary to establish whether or not the Title Deed has been correctly and legally issued. Information contained in a title deed must match with the records in the Land Department.

  • It is necessary to be aware of any encumbrances and liens currently levied upon the property.

  • You need to be guaranteed that the seller is holding the said property under a true title of ownership that may therefore have the full legal rights to sell the property.

  • You need to be aware of any pending or potential legal action involving the property.

  • You need to make sure that the developer has all of the required permits and legal documentations for a project that is not yet built.

 

  • You or your legal consultant may have some minor concerns with the sale contract details that can be corrected before signing to purchase.

 

  • You need to be informed of the details and status of the developer.

 

 

  • You must have a clear understanding of the rights and obligations of each party. This includes who pays which taxes and fees, when the deposit and balances gets paid, how long the project will take to completion and what remedies there will be if the project is not completed on time.

 

  • It is recommended that you have a lawyer in Thailand to review the contract drafted by the seller to ensure it is prepared with proper terms and conditions that meets the standard terms as required by relevant laws and confirm that the contract does not contain terms of any hidden cost and drawbacks.

 

 

The need for thorough detailed due diligence begins prior to the signing of a binding contract. The necessary title and background investigations provide the initial basis to confirm any safe purchase and ensure that both parties deal with each other in a fairly manner.

 

 

 

 

 

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