The Importance of a Proper Land Due Diligence in Thailand 

Secure Your Investment: Why Land Due Diligence is Critical for Property Transactions in Thailand 

Land due diligence is a crucial process for assessing potential risks when acquiring, refinancing, or renovating property in Thailand. It ensures clarity on ownership and uncovers issues that might impact investment decisions. The process involves verifying property details, reviewing legal records, and assessing physical and regulatory conditions. Below, we outline the key considerations under four consolidated areas. 

Legal Verification and Ownership Clarity 

The foundation of land due diligence lies in verifying the property’s legal description and ownership details (INTERNAL LINK TO LAST OWNERSHIP ARTICLE). This involves examining records at the Land Department, including the property title and its register of records, to identify encumbrances such as mortgages, leases, or repurchase rights. The history of the title must also be traced to confirm its lineage and ensure its alignment with the current property. These steps are essential to establish rightful ownership and mitigate potential legal disputes. 

Pending legal actions related to the property are another critical aspect. While such matters may appear in the Land Department’s records, sellers are obligated to disclose any ongoing disputes. Understanding these risks allows buyers to make informed decisions about proceeding with the purchase. There have been cases in Thailand where Title Deeds where withheld during the transaction, or Nominee Shareholder Companies where owning the land, which leads to its own legal problems. A comprehensive Due Diligence Report can show these red flags. 

Zoning, Building, and Infrastructure Considerations 

Property acquisitions must align with local zoning regulations and building restrictions. Reviewing zoning maps ensures the property’s intended use is permissible and reveals potential limitations on nearby developments. The Building Control Act imposes restrictions on construction size, height, and positioning, particularly in sensitive areas like beachfront properties. These considerations are vital for buyers planning new constructions or renovations. Additionally, it is important to review local government master plans for infrastructure projects that might impact the property, such as roads or piers. These projects can significantly affect the property’s value and usability. 

Physical Inspection and Adjacent Property Rights 

A physical inspection of the property is critical to uncover potential issues that may not appear in official records. This includes identifying evidence of squatters, assessing access roads, and evaluating utility placements. The walkthrough ensures a thorough understanding of the property’s current state and usability. Verifying adjacent property rights is equally important. Neighboring owners may have registered or unregistered rights affecting access to the property. Buyers must address these issues before acquisition and ensure any beneficial rights held by the seller are appropriately transferred. 

Regulatory Approvals and Compliance 

Certain developments or construction plans may require approvals from various governmental agencies. Buyers should communicate their intentions on how to use the property to confirm compliance with all necessary regulations. This process involves reviewing records at the Land Department and other local offices and may include engaging with the seller or neighboring property owners to gather relevant information. 

Conclusion 

Land due diligence in Thailand requires a comprehensive approach to ensure the property’s legal and physical integrity. By consolidating key steps into these four critical areas, buyers can effectively safeguard their investments and make well-informed decisions. Once the comprehensive report is finalized, property investors are able to make any informed decision about the purchase of the property to avoid legal problems in the future.