Do you understand Due Diligence Coverage? There is always the question as to why you should have a due diligence report done on your property before you sign the sales agreement. This is important even when you are buying offplan. There are a number of projects in Thailand that are still standing half complete for many years where the developer has run out of money or where the investors pulled out as proper government permits had not been complied with.
Many think they can save some money by not doing a due diligence because the can save a few dollars and push the risk of the property transaction much higher. Nobody spends any money in the west without looking at all the possible problems so why not use this same caution in a foreign country. Buying pre-construction or offplan makes the property sales even more risky. What should be looked at?
Inspection
You will need to consider that the developer might have taken shortcuts in the process. There should be an approved Initial Environmental Examination which has to be given in to approve the building plans. There are permits for refuse collection, electrification, sewerage and also water drainage. Many do get around it by lowering the amount of properties they will build in an estate that may not require certain permissions. As an example if you need drainage planning when there are more than 100 houses in an estate the developer might make development 1 of 50 houses and development 2 on the other 50 houses to avoid costly drainage. When they market the property they will market it as one single development and not as two. These are the types of shenanigans you have to look for in the documentation.
This is why it is important to have due diligence done. Condo developments are the same where the government ensures that there is enough parking however developers might become innovative to get around this as well. Someone has to check all of these more so when you are buying offplan or buying in a pre-construction project. There also has to be a physical inspection to ensure that what you have been sold for that those fittings are in the property. The boundaries also need to be checked and there also need to be a check on parking spaces, check permitting is complied with on the build itself.
Developer Check
You will need to check to see if the developer is solvent. You will also need to check if the developer has built other projects before and if the developer had any problems before. Property ownership also needs to be checked to ensure that the property zoning is correct as well as the title deed which the building is going to be constructed on if you are buying offplan.
Always take legal advice from a property lawyer in Thailand before you buy or lease any property. Ensure that the title deeds are correct and have a due diligence report done to ensure you investment as litigation becomes very expensive and property due diligence Coverage will solve many issues.
