Property due diligence allows you, as the buyer, to receive additional information about the real estate you wish to buy in Thailand. For instance, if you want to buy a building that has not yet been completely built, due diligence will allow you to determine if the developer has the needed permits.
Generally, due diligence includes the following steps:
Examining the Property – Conducting a Physical Inspection
If development has begun for a property, an inspection ensures that there is public road access to the land and that the boundaries comply with the boundaries shown on the title deed. Due diligence gives the buyer verification that everything on the title deed is correct.
A physical examination also allows the buyer to find out who owns the parcels of real estate that surround a property. Further examination will help the buyer clarify if the local zoning ordinances have been observed as well.
Inspecting the Related Permits
A new condominium or real estate development needs approval and official government endorsement, all which includes:
Making sure that the development can proceed as planned. For instance, some places in Thailand will not allow the development of condominium properties. If the buyer is interested in this type of building, performing due diligence will ensure that the construction can occur. Drainage is also checked before the building begins.
Reviewing the permit for construction to ensure that it was issued properly and reflects the developer’s plans.
Reviewing the Initial Environmental Examination (IEE) report to confirm that it was properly submitted and filed with the Office of Natural Resources and Environment, and that approval was granted.
Comparing the IEE report with the plans for construction so any changes comply with the report.
If applicable, make sure a minimum number of parking spots are planned for condominium construction, and that the plans meet the legal criteria.
Performing a Developer or Credential Review
Due diligence may also include reviewing a locale’s court records to find out the following:
Whether the seller has ever been sued by a buyer for a previous default;
Whether the seller has declared bankruptcy, which would hinder the seller’s ability to transfer title;
Whether the development is a first-time construction project.
As you can see due diligence is a second check when you examine a property’s history and title.
If you need the assistance of a property lawyer in Thailand, please contact us.