Due diligence involves research and the analysis of an individual, a company or an organization that is done as a preparation for an investment or a business transaction. For a reasonable person, extra precaution is needed before entering any agreement or transaction while preventing unnecessary harm. This procedure helps one identify the possible liabilities and risks. Due diligence confirms all legal parameters and material facts by evaluation and investigation.
Importance of due diligence on buying Thai properties
Property investment involves large sums of money. There are several fraudulent developers and dealers who take advantage of investors that can easily be victimized during deceitful deals. This is why investors are really encouraged to take precautions prior to finalizing any transaction.
Due diligence is a helpful tool that estimates a potential project’s or developer’s status. When one fails to do necessary safeguards, it usually results to greater consequences like serious legal and financial distress on a buyer’s part. It should be noted that when a transfer is completed, the seller is already not liable for any possible problems found by a buyer.
Factors to consider when carrying out due diligence
- Seller must hold the specified property under an ownership title. This must match the Land Department’s records.
- Buyer must know the burdens existing for a property. It is required to review the Register of Records indicated at the title document’s back.
- Buyer must determine if seller is the one holding title to a property and having full legal rights to selling a property.
- Buyer must know of any possible legal action that involves a property.
- Buyer must ensure that a developer has every required permit and legal document for a project to be built.
- Details can be corrected when a buyer and his or her legal consultant sees minor concerns with a sales contract.
- Buyer must be made aware of a developer’s details and status.
- Buyer must have a good understanding of the obligations and rights for each party.
- Buyer should have a lawyer based in Thailand that can review a contract drafted to ensure it has proper terms and conditions meeting the terms needed by laws as well as confirm a contract doesn’t have hidden costs or drawbacks.
Due diligence is really very important for those buying properties from realtors, companies or websites like East Coast Real Estate in Thailand. This guarantees that precautions are done prior to an investment or business transaction that will result in confidence over a decision made.