It is highly advisable for a real estate consumer to conduct due diligence first before committing to purchase a property by way of signing a contract or paying the down payment. Due diligence allows the buyer to know more about the property, its owner/developer and other details including the required permits.
Our Due Diligence
Our due diligence employs at least three (3) methods in order to make sure that its clients are purchasing properties that are free from any present or possible encumbrances thus paving the way for them to get the best property deals possible.
- Physical Inspection
There is a possibility that what is stated on the contract or reflected on the schematics is not actually the same in actual terms.
To clearly identify the property with the surrounding lands and their owners, to double check whether such development is allowed in that area and to establish whether the property is connected to a public road or that its boundaries are well defined as reflected on the title deed are all true or have deviate from facts, we do physical inspection of the property.
Added to the benefits of a firm doing physical inspection is that the buyer does not need to be in the area to physically inspect it himself especially if he is an expatriate and cannot be in Thailand as often as he likes before he makes the acquisition of the property.
- Checking the Permits
Permits are essential especially in property development like condominiums. These documents provide evidence that the development is in compliance of Thailand’s laws and regulations such as:
- If condominium development is allowed on a particular area.
- If such condominium development has a functional drainage system in place.
- If the construction permit has been legally obtained and if it does reflect the plans presented by the developer.
- If the developer has filed or has properly filed and granted with an Initial Environmental Examination (IEE) with the Office of Natural Resources and Environment of the Province where the development is located.
- If the construction plans are still in unison with the IEE after the latter has been obtained by the developer.
- If the development plans are in line with Thai law that requires every new condominium development to provide adequate parking spaces.
- Background Check
Also as important as checking the company’s compliance with the necessary permits and doing physical inspection, Siam Legal also checks the overall background of the developer by researching court records to obtain another set of information.
With the research on court records, Siam Legal and eventually the property buyer will find if the developer is involved in any legal skirmish, be it at present or in the past, if previous clients has sued the company or not, if it is has a good financial standing to sustain the development and has not filed for bankruptcy.
After undertaking a thorough investigation of the property and the developer, Siam Legal will provide its due diligence client with a detailed report, photos of the land/development site and the translations of pertinent documents and permits.
Translations are done to ensure that the buyer actually understands everything about the property as Thailand utilizes the Thai language in all legal documents including the permits.
The Property Purchaser
These standard practices of Siam Legal on doing due diligence may uncover hidden facts about the developer or the development site.
Some of these red flags can be corrected while others may warrant for the buyer not to proceed with the purchase of the property because of the gravity of the discovery.
In summary, a thorough due diligence can spell good or bad investment on the part of the buyer. Even if it entails additional expenses even before the property is actually purchased, what a due diligence job may uncover can even save the buyer a huge fortune in the future.