Completing a thorough real estate due diligence is an essential undertaking before contemplating the purchase, long-term lease, or acceptance as collateral of any immovable property in Thailand. You will want to make sure that the house, condo, commercial property, or other real estate is free from any underlying issues. This applies whether you are acting as an individual or as a company and whether the current owner of that real property is likewise a company or individual.
Conducting a thorough due diligence is an effective way to help you decide if a potential investment is worthwhile. Most importantly, it serves to identify any adverse legal or financial issues you may encounter if you were to enter a transaction.
What is real estate due diligence?
Due diligence, in general, is an investigation to confirm specific facts or details. In real estate, it is a comprehensive survey of a target property, gathering all the knowledge and information that is useful for a buyer to know before proceeding with the purchase.
In Thailand, this includes determining:
- The seller offering the property is the rightful owner who has a legal right to sell.
- The status of any liens, mortgages, or other encumbrances registered against the property at the Thai Land Department.
- If there are bankruptcy, asset seizure, or other court proceedings filed or in process against the seller.
- The land and structures comply with zoning, building, and environmental regulations.
- The property in question has no restrictions that would prevent the buyer from using it as they intend.
- The Thai Land Department’s assessed value per square meter of the property in relation to transfer fees and certain taxes based on the assessed value.
- If the property has free and clear access to public roads.
If the property is a condominium or commercial office space, it is also important to confirm that the current owner is not in arrears for management or common area fees. Also, if you are a foreign individual or company, you must ensure that the sale will not exceed any foreign ownership quotas.
GPS Legal can help with buying real estate in Thailand
GPS Legal has extensive experience helping clients buy and sell real estate in Thailand. We understand the intricacies of Thailand’s land laws and can investigate properties and their owners thoroughly. If you are interested in investing in real estate in Thailand as an individual or a company, contact GPS Legal today for your free initial 30-minute consultation.