Conducting thorough property due diligence in Thailand is crucial for investors and buyers to ensure a secure and legally compliant real estate transaction. This comprehensive guide covers essential aspects to check when considering property in Thailand, from land titles and ownership structures to regulatory compliance and environmental factors. By following these guidelines, you can navigate the complexities of the Thai real estate market with confidence and make informed decisions.
Nor Sor 3 Gor Land Title
1
Understand the Title
Nor Sor 3 Gor is a less secure and precise land title compared to Chanote. It indicates surveyed land with determined boundaries but lacks the same accuracy and legal certainty.
2
Verify Validity
Conduct additional checks to ensure proper land surveying and accurate boundaries. This may involve engaging a surveyor or consulting government authorities.
3
Review Restrictions
Check for specific land use restrictions imposed by the government or local authorities that may affect the property's development potential, usage, or transferability.
4
Consider Conversion
Explore the possibility of converting the Nor Sor 3 Gor title to a Chanote title for stronger legal protection and greater certainty.
Usufruct and Superficies Rights
Understand the Concept
Thailand recognizes usufruct and superficies rights, allowing individuals or entities to have temporary rights to use or develop land owned by someone else.
Review Agreements
Carefully examine any agreements related to usufruct or superficies rights to understand the terms and conditions.
Ensure Compliance
Verify that the agreements comply with relevant Thai laws and regulations governing these types of property rights.
Protected Areas and Building Restrictions
1
Identify Protected Areas
Thailand has various protected areas, including national parks, forest reserves, and coastal zones. Check if the property falls within these designated areas.
2
Understand Restrictions
Research and comprehend the restrictions on development, land use, or any other limitations imposed by authorities in protected areas.
3
Consult Local Authorities
Seek information from local government offices to confirm the property's status and any applicable regulations.
Foreign Ownership Structuring
Thai Company Setup
Foreigners can set up a Thai company to purchase land, but Thai nationals must hold a majority shareholding (51% or more). Ensure compliance with the Land Code Act B.E. 2497 (1954) and its amendments.
Condominium Ownership
Foreigners can own condominium units under their own names, with up to 49% foreign ownership allowed in a project. Verify compliance with the Condominium Act B.E. 2522 (1979) and its amendments.
Leasehold Agreements
Consider leasehold agreements for land use, typically up to 30 years with renewal options. Thoroughly review the lease terms, restrictions, and conditions affecting property usage or transferability.
Land Encroachments and Condominium Regulations
1
Verify Land Boundaries
Check for any history of land encroachment or squatter issues. Engage professionals to conduct physical inspections and confirm boundary markings to avoid potential legal disputes.
2
Review Condo Regulations
For condominium units, carefully examine the condominium regulations established by the juristic person. Pay attention to rules governing common areas, maintenance fees, and usage guidelines.
3
Understand Rights and Restrictions
Familiarize yourself with the rights and restrictions regarding common areas, facilities, and conduct within the condominium project to ensure a harmonious living experience.
Leasehold Renewal and Developer Due Diligence
Leasehold Renewal
For leasehold properties, review renewal or extension terms. Confirm procedures, costs, and conditions associated with lease renewal to secure long-term interest in the property.
Developer Background
Conduct thorough due diligence on developers, including their track record, financial stability, and reputation. Verify licenses, permits, and certifications to ensure project completion.
Project Completion
Assess the developer's capability to complete the project as promised, reviewing their past performances and current financial status.