Property Purchase in Thailand: Why Due Diligence

There are many foreign investments which involve the purchase of real estate. Whether for business reasons, an investment visa, or a residence, the purchaser of the property must apply Due Diligence to the purchase of the property. A quick and smooth transactions sometimes causes the purchaser to overlook issues that will affect the ability of the purchaser to sell or enjoy the property.

Due Diligence confirms the material facts of a sales. This involves going beyond the terms of the contact and to physically inspect the property, complete a title check, review government permits, and review liens on the property. Also, it is important to complete a background check on the property developer and seller. There is a higher propensity of land scams in Thailand because of the complex method of registering property.

Title Search

Prior to placing a deposit on the property, it is important to search and review the legal documents relating to the land or property at the government land office. There are a variety of different land titles in Thailand with different property rights. Some provide only possessory rights without the ability to transfer (sell) the property. It is important to inspect the land documents to check on the title qualities. Some properties have liens attached to the property which may make the purchase or sale of the property impossible.

Physical Inspection

An independent surveyor should inspect the property to ascertain if the land is connected to a public road and if the boundaries of the land are clear and whether the title deed accurately reflects the actual boundaries. Uninhibited access to the property from public roads will greatly affect the price of the property. Without direct access to a public road, there may be legal, commercial, and practical problems with neighbors. A physical inspection of the land will also review the local zoning ordinances to determine what will be built in nearby land parcels.

Inspection of Building Permits

For buildings, homes, or condominium units, it is important to review the government filings to ensure that the developer or seller has approved land and building permits. Due diligence requires a review the type of development and ensure that there are no restrictions in the area. There needs to be an Environmental Examination of the property, confirmation that it has passed building codes, and whether parking will be available to the property owner. It is also important to ensure that the property is not encroaching on government protected land which makes development illegal.

Seller Background Review

Property scams are a regular occurrence in Thailand. This necessitates a review of the credentials of the seller or property developer. The seller or developer must be identified, their financial background checked, and criminal background. It is important to also check their name in the court records. Ongoing or past litigation can damage the property rights of the seller. If the seller is the developer, it is important to review their previous developments and the satisfaction the property buyers in those developments.

This article provided a quick overview of the Due Diligence requirements when purchasing property in Thailand. We can assist you when purchasing property in Thailand. If you have any questions, please contact our office.


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Category: Condominium, Land, Property

About the Author (Author Profile)

Siam Legal is an international law firm with experienced lawyers, attorneys, and solicitors both in Thailand law and international law. This Thailand law firm offers comprehensive legal services in Thailand to both local and foreign clients for Litigation such as civil & criminal cases, labor disputes, commercial cases, divorce, adoption, extradition, fraud, and drug cases. Other legal expertise of the law firm varied in cases involving corporate law such as company registration & Thailand BOI, family law, property law, and private investigation.

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