Due diligence
lawyer's real estate checklist

Whether you lease land or purchase land in Thailand, the land ownership title deed needs close scrutiny. The seller must be able to identify himself as the owner and provide complete certified copies of the documents of the land (e.g. a copy of the land title deed front and back side, the previous land office sale agreement). When the property includes a house the seller must submit a copy of the house book and building permit or previous sale agreement confirming his ownership.

Real Estate (land purchase) checklist

When purchasing a property in Thailand the buyer should practice 'due diligence' to verify all the details of a particular property. As foreigners are not able to obtain outright ownership of land he should familiarize himself with the various sale structures offered to foreigners:

  • Sale of a freehold condominium unit
  • Sale of a leasehold condominium unit
  • Sale of a leasehold apartment unit (apartment building not registered under the Condo Act)
  • Sale of land (cannot be outright foreign ownership under Thailand land laws)
  • Sale of land and house
  • Sale of leasehold land
  • Sale of leasehold land and house
  • Sale of leasehold land and sale of freehold house
  • Sale of leasehold land and a construction contract and permit

Due diligence should at least include the following:

  1. verify ownership and the land title deed at the land department and if the title is not restricted for transfer;
  2. investigation into the issuance process of the land title to verify that the title deed has been legally issued, and to verify with the land office possible and registered existence of any encumbrances (claims by another party), powers of attorney or conditions such as a right of redemption in the previous transfer;
  3. confirm there is public or registered private road access to the land;
  4. optional a bankruptcy and civil court search on the owner of the land;
  5. optional land survey by a surveyor to confirm the size of the land;
  6. verify if there are any building or other restrictions and present use under building and zoning regulations or other laws (nature reserve, protected forest land, environmental or other laws or local regulations);
  7. is anyone in occupation or has use of the land (possible right of possession by another party or existing servitudes);
  8. any drainage problems on the land or subsidence, dirt roads on hill sides become inaccessible during the rainy season;
  9. is or can the the land easily connected to the main utilities such as water and electricity or how do you get electricity hooked up (water availability is essential);
  10. trash disposal (how will you get rid of it), sewage disposal, telephone and cable;
  11. are there any problems with the local Thai residents, noise nuisance or other disturbances from surrounding land, drainage problems, or problems with access to the land;
  12. verify conditions of the sale agreement and responsibilities of the parties.

Buying into a planned developments in Thailand the following could in addition be checked:

  1. is it a private development or government licensed project;
  2. has the main land been sub-divided and has a separate title deed been issued;
  3. has the developer complied with all regulations for development and obtained all licenses;
  4. have the building permits been issued;
  5. has the developer obtained a housing development license (required for projects exceeding 9 plots);
  6. is an environmental impact assessment approval report (if required for licensing of larger projects);
  7. the sales structures and agreements under which the project is sold;
  8. how long has the developer been developing properties in Thailand and what is the registered share capital of his company;
  9. can the purchaser instruct an independent building surveyor to inspect the build upon completion;
  10. how many houses are being built in the project and could the view be blocked by new construction;
  11. will the developer take care of the registration of the house in the foreigners name with the relevant government departments and the house registration booklet (Tabian Baan);
  12. will the developer connect the land to public utilities and apply for the installations of separate meters in the purchaser’s name, or will the developer supply utilities through the his management company;
  13. what services will be provided and how much is the monthly or yearly maintenance and service fee in the project. How will this be calculated. A common complaint is high maintenance and service fees charged by the developer;
  14. who will be responsible for transfer or registration fees. In an approved housing development project the sale contracts must be approved by the housing development committee and have minimum consumer protection.

Tags: real estate law

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