If you are considering investing in property in Thailand then you need to ask your lawyer to do a due diligence on the property you are wanting to buy. The very basics of a due diligence has been listed below and the reasons why certain aspects of the property need to be checked. This is a very basic list of what you need to check so speak to us online or in person for more information about a due diligence in Thailand.
Title Deed Check
It is always best to have a title deed checked. Most buyers will not buy a property that is not at least a Chanote or a Nor Sor 3 Gor. As noted you need to ensure that the Chanote does not have a time limit registered against it as there is property on the market which has a limited Chanote as the property was part of the Thailand Land Reformation process where the Chanote was limited being that it could not be sold for 10 years. There also needs to be a title deed check to ensure that the title deed is correct and was issued correctly. Land scams and property scams in Thailand is not uncommon. You also need to check if there is not a lease registered against the property or a usufruct, a superficies or a servitude which would create its own problems as the land is then limited to what has been registered against it.
It is always best to check which zone the property is in. If you are buying a condo or house in Thailand in an area that is zoned for industrial then you are going to have a problem selling the condo or house later when factories show at your doorstep down the line. You also need to check if there are building restrictions and regulations for the area the property is located in. As with the title deed check you also need to see if a usufruct or servitude as not limited the property development. Having a gas pipeline servitude across your property is not a good sign. Just because it is not there the servitude may be registered against the property and not been executed over the property as yet. This is not uncommon in Thailand either.
You need to check if there is a mortgage registered against the property or any other encumbrances or civil claims which could create problems with the transfer process. Has the property been used for security for a debt?
Conditions of Sale
Had there been any conditions set for the sale of the property the last time it was transferred such as the right of redemption. Was the property given as a gift which might hinder the sale of the property? Has the property been subject to another agreement which you do not know of? It is not uncommon for someone trying to sell the property to 5 other people all at the same time and taking their deposits. Trying to recover the money would be very difficult as litigation in Thailand is very slow and costly.
Is the owner of the property insolvent or the company holding the property bankrupt? Is the property in a dispute which you do not know of? These are issues which need to be checked before you proceed with a sale of agreement. You also need to check that the owner has not publicly declared his intention to donate the land to the public. You also need to check that you are dealing with the owner and not a third party.
Is the property in an area where the government is planning expropriation or is the property located on land which encroaches on government land? There also need to be checks made that the property is not located in a property reformation zone where the government is rezoning the land to agricultural land. There also needs to be checks made that the property is not located in an area which is located in a nature reserve or for the public such as a public park.
Doing a due diligence on property in Thailand is not compulsory however with very little oversight in Thailand in the property market a due diligence would be compulsory for anyone not willing to lose his investment due to fraud or other deception. Call us today for more information or walk into our offices in Thailand for a confidential discussion on your property investment plans in Thailand.