Due Diligence of a Condominium
Due Diligence of a Condominium is another way to make sure that the property you are dealing with or the building itself will not put you at stake. A lot of foreigners when buying a property or condominium in Thailand tend to overlook the fact that they need to ask their legal advisor or lawyers to do a due diligence report on the property, on this case, a lot could go wrong in the long run because there might be problems that will surface that the Buyer will be clueless.
Due diligence is the process of evaluating a property from all aspects before making a purchase decision. It’s often performed when buying a condominium or houses but there are many other situations in which due diligence might be necessary as well. Due diligence is not a general investigation. It includes specific elements that can vary based on the situation. Due diligence protects both parties but primarily the purchaser. It can uncover potential liabilities and financial matters and make sure nothing is hidden.
The purpose of the Due Diligence is to know and discover any unwanted issues about the property that the Buyer (Foreigner) is interested with. Although the dictionary definition says that due diligence is “the care that a reasonable person exercises to avoid harm to other persons or their property.” In layman’s term, due diligence means doing your homework about the property that you are interested with. Before putting your business funds to work on anything, you should make yourself an expert and familiarize yourself with the property you are working on buying. Often, due diligence is used to describe the investigation done before purchasing a property.
The process of due diligence requires the involvement of both the principal the buyer or investor and his accountant and attorney. It’s usually performed after the intent-to-purchase documents have been signed but before a formal purchase agreement is entered into. The most important aspect of the due diligence process is taking note of discrepancies between what is reported and what is actually going on. Ask lots of questions. If you don’t get satisfactory answers, ask again and ask why. It’s sometimes necessary to prove the negative as well as the positive. Remember, if something doesn’t seem right, it probably isn’t.
Due Diligence have a lot of factors that you need to consider. With regards to buying a Condominium in Thailand, the usual concern is the environmental aspect as well as the location, the building and construction, the land titles as well as the integrity of the owner of the land that the building is being constructed on.
In Thailand, a foreigner can buy and own a Condominium in a building provided that it is registered under the Condominium Act B.E. 2522 (1979) amended 2008. Foreigners can only own 49% of the total available units of the building while the remaining 51% must be owned by Thai Nationals. This aspect is often disregarding and not thoroughly checked, at the end of the day the foreigner might encounter unsuspected problems on the long run because of some legal aspects that has been skipped or not checked by their legal advisor or attorney.
As mentioned above, the usual scope of Due Diligence of a Condominium in Thailand is Environmental Concerns, the Location, Building inspections, the Construction, Code Compliance, Performance Data, Integrity of the Building under the Condominium Act B.E. 2522 (1979), the Title deeds and/or Land titles and the integrity of the owner of the land. The aforementioned aspects should be thoroughly checked by the foreigner’s legal representative to make sure he will not encounter any problem in the future.
With regards to the Environmental Aspects for Due Diligence, the Legal representative will check if the property is constructed without proper environmental check. The materials etc., the location will also be checked if it is accessible through the main road and if the location is safe and away from any future natural disasters.
Due diligence is time consuming, inconvenient, tedious, and sometimes expensive. But without this there is a chance that you will encounter and liabilities and unsuspected problems from the property you are going to buy. This is the best thing to do in order to protect your best interest in buying a condominium in Thailand.
Our law firm can process a due diligence for you, may it be a condominium unit in Phuket, Pattaya or Bangkok, we are willing to assist and help you with reviewing and inspecting every significant aspect that you need to know about the real estate property that you will purchase. A due diligence report can help you understand and gather more details about the property as well as to secure yourself from any unforeseen liabilities. Sabai Property Law Firm is ready to help you with Due Diligence report. Our lawyers have extensive experience on this field and will provide the best solution and best advice for you, because we value you and here at Sabai Property Law firm, your best interest is our top priority, and your satisfaction is our happiness.