When looking to purchase property in Thailand, it is important to perform due diligence before making a purchase. The due diligence process involves a comprehensive search for legal issues and document review. It also includes investigating the property’s infrastructure, surrounding areas, and encumbrances. Listed below are the steps involved in performing due diligence on a property in Thailand.
Comprehensive Search for Legal Issues
If you’re buying property in Thailand as a foreign national, it’s important to conduct a thorough search for any legal issues. You may not realize it, but Thailand’s housing market is not as regulated as other countries’. You’ll want to hire a lawyer to protect your interests.
A lawyer specializing in real estate transactions in Thailand will be invaluable in guiding you through the complicated legal process. The laws and procedures governing buying property in Thailand are quite complex and foreign buyers may not be familiar with the details. Fortunately, Thailand’s real estate lawyers will be able to guide you through the process and provide a thorough overview of all your rights and obligations.
Investigation of the Property
When you’re considering buying property in Thailand, there are certain things that you need to investigate before you sign a contract. First, you need to ensure that the land you’re interested in is actually available for sale. If the landowner is a developer, you need to look into the dates that the company was registered, whether the company has registered any share capital, whether it has changed names in the last three years, whether a building or land allocation permit has been issued, and what kind of title deed is available for the land. Furthermore, you should conduct a land survey by a reliable chartered surveyor.
Investigation of the property due diligence in Thailand includes checking documents and property title to make sure you’re not getting ripped off or investing in a scam. This step is particularly important in Thailand due to the complicated land registration process.
Check the Title Status and Land Documents
According to Thai law, land paperwork must begin with the notification of possession to the land title deed, which is the document that symbolizes full ownership rights and is at the top of the hierarchy.
Therefore, it is crucial that you are aware of the title’s hierarchy level, its context, and history, as well as whether or not the land documents have been issued lawfully, provide evidence of a lower hierarchical level, or have been upgraded from other land documents.
This component of the report would include a small map and information about the land, as well as a depiction of the area around it.
History of Ownership of the Property
The history of the land’s ownership should be verified in this portion of the property due diligence report. You must determine when the original ownership document became a lower-level document rather than a title deed. Additionally, be sure the title deed was issued legally.
Property Attachments and Legal Encumbrances
According to Thai law, in order for any easements, mortgages, servitudes, or other legal encumbrances over immovable property to be valid, they must be registered at the land’s location’s land office.
Leases and Other Rights Registered Over Property
Thai law mandates that any lease of real estate that lasts longer than three years be registered with the local land office. The leasing agreement must still be in writing even though it isn’t required to be registered because its term is less than three years. This section will make it clear if the land has been leased to another person for a period longer than three years or if any other tenancy rights, such as a right of benefit, a right of usufruct, or a right of habitation, apply. The scope of the purchaser’s use of the property will be outlined in this clarification. A lease agreement for movable property is not nullified by changes in ownership. The transferee is given the privileges and is in charge of the obligations the transferor has to the leaseholder.
Zoning, Building Control, and Environmental Regulations
In Thailand, land use for commercial, residential, agricultural, and cultural preservation purposes is governed by the City Planning Act. In addition, any buildings that are built must comply with the pertinent laws governing building control as well as other pertinent laws. These laws include rules, notifications, and regulations. The purpose of this section is to provide the land buyer with information on the existing zoning, environmental laws, and building controls that pertain to building construction and cover land usage. In essence, the purpose of this component of the report is to confirm, for the buyer’s consideration, if the building construction on the land was correctly issued a valid construction permit as well as any other relevant permits.
Buying a property in Thailand will cost you a lot of money. So, it is equally important to conduct the due diligence of the property before you start to pay any amount or before signing up any agreement.