Property Due Diligence in Thailand

Due diligence is a legal term for the research and analysis that must be done before acquiring property. It is a way of protecting yourself from people being dishonest and also from genuine oversights that could end up costing you.

Performing Property Due Diligence in Thailand will ensure that you are getting what you are paying for and that no legal issues arise from the purchase. The process involves checking for a number of different things:

Land title search

A land title search is an important part of property due diligence in Thailand. It ensures that the seller actually owns the land they are selling and that there are no liens or mortgages on the property. It also helps protect investors from being taken advantage of by dishonest sellers and can prevent them from making costly mistakes.

Performing a land title search involves visiting the local Land Office. This is the equivalent of a US Registrar of Deeds and records developments and encumbrances on land. It is also necessary to check whether the property has any usufructs or servitudes, such as a gas pipeline servitude, which may limit its development potential.

It is essential to perform a land title search because there is no guarantee that the information on the title deed matches the registered Land Office records. There are many reasons for this discrepancy, including clerical errors, changes in ownership and encumbrances. It is also advisable to check whether building permits have been issued and whether any litigation cases are in progress against the owner of the land.

Visit the local Land Office

Land ownership is a complex issue in every country and Thailand is no exception. There are specific laws and restrictions on foreign ownership, so it’s vital to perform due diligence before buying land in Thailand. This includes visiting the local Land Office, which is similar to a Registrar of Deeds in the US. This will help determine who owns the land and whether it’s free of any liens or encumbrances.

Property due diligence also involves checking building permits and zoning restrictions. It is against the law to build on land without a permit, and violations could result in heavy fines or even imprisonment. A good property practitioner will be able to help you with this process. They will review the copies of documents attached to the property, conduct a land title search at the local Land Office and inspect the building construction permits. They will also check for legal encumbrances such as usufructs and mortgages.

Check building permits and zoning restrictions

One of the most important aspects of property due diligence is checking the building permits and zoning restrictions. This step can reveal whether the seller owns the land legally and if there are any legal issues that would prevent you from purchasing it. It can also ensure that the land is in compliance with zoning laws and allows for development. It is also worth checking whether there are any usufructs or servitudes that may restrict the use of the land. For example, a gas pipeline servitude across the property may not be allowed by law.

Performing this type of investigation can help buyers avoid unpleasant surprises. It is often performed by a Thai lawyer who is familiar with the local real estate market. This process typically includes translation of documents; a physical inspection of the land; checking sewage and telephone lines; and other technical elements. The findings of this due diligence are then analyzed to assess potential risks.

Check legal issues

When buying immovable property in Thailand, it is important to conduct proper due diligence. This involves investigating the legal background of the property and reading the title deed carefully. Since Thailand’s land title system is based on registration, any mistakes made in the process can have serious legal implications.

Another important step in property due diligence is checking whether the seller is the legal owner of the property and has the right to sell it. It also includes looking for any legal encumbrances, like usufructs and servitudes. For example, a gas pipeline servitude might limit the development of the property.

Finally, you need to check if the property has a building permit. Without one, it is illegal to build on the property and you could face hefty fines. This is particularly important if you are buying property from a developer or off plan.

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