When acquiring a property, be it for outright ownership, lease or other similar structures, a proper due diligence must be undertaken first before the first payment has been made or the contract be signed by the interested party. This practice should be standard among property buyers as this would allow them to know more about the property, in fact, more than what was shared by the agent or developer of the said property.
If the acquiring individual is a foreigner, due diligence is still highly recommended even if it is a fact that he is not allowed to own land in Thailand on freehold. Even if he would just lease the property for a certain period of time, the fact that he would be investing a part of his finances, due diligence is still highly recommended.
Characters of a Quality Due Diligence Service
Due diligence is a highly complex procedure aimed at uncovering any hidden details about the property, its attached documents and the party dealing the said property. Meaning to say, a properly done due diligence should at least include the following: physical inspection, documentary and developer/owner/seller research.
- Physical Inspection
Access to and from the property can be determined through due diligence. This would involve actual and physical visitation of the property and then correlate its physical aspects with that of the title deed. Physical inspection can also uncover if the boundaries of the said property do coincide with the details reflected on the title.
If the property is a development, physical inspection can uncover if the materials used are in accordance to the materials specified by the developer and or agents through advertisements and other modes of similar purposes.
- Documentary Research
In some areas in the Kingdom, construction of certain developments are restricted by local ordinances. Due diligence can help determine if development is allowed on such particular area.
Also, it is very important to check whether the developer has complied with the needed documents such as the filing of the Initial Environmental Examination (IEE). If the developer has filed the IEE, due diligence can help determine if the construction plans of the developer do coincide with the IEE.
- Seller/Owner and Developer Research
Any interested party must be fully aware of the background of the person, agent or developer dealing the said property. That being said, due diligence would find out if the person or entity dealing the property has the legal capacity to do so. If the property is a condo to be bought off plan, the background of the seller or developer should be assessed very well to make sure that the developer has the capacity to finish the project.
Due diligence would also include thorough inspections of documents including court records to ascertain if the person, agent and or developer has been included on a current or previous court proceedings.
There can be a chance that a foreigner would prefer his trusted lawyer to conduct due diligence in Thailand. The individual must be aware that lawyers not registered in Thailand are not allowed to practice certain legal procedures and they are also barred from having access to court records.
Having a Thai lawyer to complement his foreign lawyer is also recommended as a Thai lawyer can also provide translation services and this would mean the lawyer translating certain documents from Thai to English since Thailand utilizes Thai as its official language.