What is Due Diligence?On June 19, 2013 by Thai Barrister
Due Diligence is an act carefully done by a person who is planning to purchase a property. This includes but not limited to i.e. title search report, photos of the land/property, translations to construction permits and other related documents. Ideally, this is completed before any payment or signing of agreement is made between the seller and the buyer. It is all about safeguarding yourself and your potential investment.
Who normally does it?
Primarily, it is you who should do this act. It is your responsibility as the buyer to do so since you are the one who dispenses the money to close an actual purchase. But this process can be very tedious, time consuming and exhausting since it involves a very circumspect investigation on everything that surrounds the property i.e.:
Seller (Individual or Company) – it is very important for you to know the background of the seller of the property. After all, you should know the answers of the following questions: Who is the seller? Why is he selling the property? Knowing the answers of such questions will give you a clearer mind.
Property – you have to know the basic facts about the property, basic facts in which you may have the tendency to neglect especially if you are very much interested with the property. Questions about the property may include the following but not limited to: location, public/private road, parking, etc.
The examples given above are just the tip of the iceberg of what you are supposed to do when you are planning to purchase a property in Thailand. The actual process of doing it is more exhausting especially if you do not know which office or person to approach to for consultations because due diligence requires a thorough search by an individual or a lawyer who is an expert in the field.
What should be done?
Title Search – contrary to popular belief, the Title does not contain everything you need to know about the property especially if you do not know what to look at in a title deed. You will need a lawyer or a property specialist to examine the title deed if it has the right contents basing on its type of a title deed.
Visual Inspection – you can’t be at the site to monitor the development as often as you want to. Your lawyer can do this for you being your legal representative. Also, inspection must also involve the inspection of the surrounding area of the property you are about purchase and the relevant local zoning ordinance of the locality the property belongs to as these ordinances may differ from one place to another.
Land Use Restrictions – there are restrictions that can be relative to every area in Thailand i.e. condominium development. There are areas in Thailand wherein condominium development is not permitted.
Initial Environment Examination – there must be a careful review the Initial Environmental Examination (IEE) report filed by the developer with the Provincial Office of Natural Resources and Environment and ensure that there’s proper filing and approval. A comparative study of the IEE report with that of the developer’s construction plans is also advisable.
Local Court Records – local court records may be treasure trove for information with regards to the property as cases may have been filed and that these may have involved the seller or that the property is currently a subject of litigation.
If done properly, Due Diligence will provide you with the 3S: safe, secure and satisfying purchase of the property you have been dreaming to have. If you are buying property in Thailand then speak to a lawyer or barrister in Thailand about the process, cost and timeline for a due diligence report. It has been noted that you are less likely to enter into a property scam in Thailand if you had done a due diligence on the real estate you are wanting to buy.
Speak to us today online or drop us an email for assistance. Better yet walk into any of our offices in Thailand for assistance with your property purchase. Do it today!