Due Diligence Report
Before you buy any property in Thailand you are best advised to ensure that a due diligence report has been completed on the property. Below you will find some of the basics that would normally be part of the report and why it is important to have a due diligence done on the real estate in Thailand. Remember that mistakes in property agreements in Thailand will be very costly as litigation is costly and draws out for years.
Due Diligence Report
Title Deed Search
Title deed fraud in Thailand does occur and land scams do occur because buyers think that this is a good deal which normally ends in a disaster as the title deed does not exist or the title deed is an upgrade that might not be sold or leased. A few years ago the government gave out Chanote title deed in a land reform program but people could not sell the property for 10 years. There are also other title deeds which simply cannot be sold or leased. Some might look official however it might not even be a title deed but a right to occupation.
This will be shown in a title deed search. Buying property will also need to be done with the actual owner of the property. The title deed search will also show who the real owner is of the property. This does occur when people say that they are selling property as an agent. But are not the official agent and they cannot bind the principal. When dealing with agents you need to ensure that it is the real agent and that any agreements need to be put in writing when the time comes to transfer the property.
Why you need a Due Diligence
The due diligence also needs to look if there are servitude’s registered over the property. Also if there are any usufructs registered over the property. Mortgage bonds are also registered against the property as well as long term leasehold agreements. All of these need to be check before buy property much like anywhere else in the world. Property developments are more complex than buying a used condo on the market. This as someone needs to check that all the laws had been complied with such as the Environmental Impact Assessment. These have been a problem in the past with property developments in Pattaya where the EIA was not properly filed. This was cleared up in the end however it left a bit of a black mark on the property market.
Construction certificates, builders licenses as well as other issues all need to be viewed and reviewed. Buying off plan can also present many new problems such as certificates and permits for roads. This as well as drainage which needs to be checked. There have been problems in gated communities in Thailand. This where the road as well as the water and storm water drainage was not approved and the developer ignored this.
Always take proper legal advice when dealing in property in Thailand. This and always speak to a property lawyer before signing a sales agreement for a condominium unit.