Due Diligence During the Legal Review of Contracts in Thailand
Due Diligence is vital when you are buying or selling property or commercial property in Thailand. Thai contracts do not often contain comprehensive rights and obligations. As such, it is essential to review contracts for clarity to avoid any legal pitfalls. Hiring a lawyer to review your contracts will help you to avoid any ambiguity that may lead to a breach of contract. This article outlines the steps to ensure that you do due diligence when buying or selling property in Thailand.
Commercial Due Diligence
The term due diligence is a term used to refer to the process of researching and analyzing a business before entering into a legal agreement. Due diligence is a key aspect of any business transaction and is an important safeguard for the parties to a contract. Due diligence involves the analysis of a business's legal requirements, including contracts, applicable laws, and the market environment. During the legal review of a contract in Thailand, due diligence should address any legally vulnerable areas.
In addition to checking for compliance with legal requirements, commercial due diligence involves doing due diligence on a property. For example, if a property owner is a developer in Thailand, a due diligence investigation should focus on the company's registration date, the status of the share capital, and the names of any previous owners. If the company's name has changed in the last few years, the due diligence investigator will want to investigate whether the company has obtained a building or land allocation permit. The land survey should be conducted by a reliable chartered surveyor.
Property Due Diligence
A proper investigation of a potential purchase of land or property is vital. The buyer must translate a Thai land title deed into English in order to better understand what rights the buyer has to the property. It is also imperative to examine whether the land has any problems such as drainage, main utilities, or road access. A reliable chartered surveyor should conduct a land survey. If a buyer is unsure of any of these issues, he or she should hire a Property Due Diligence investigation company.
The buyer should also check the official assessed price of the land. This is essential because some sellers can't issue a title deed and can deceive the buyer by pretending to be the owner. Proper due diligence can help avoid dealing with a fake owner. Due diligence may sound obvious, but it is essential in Thailand. A map of the property's location is an important part of a due diligence report. The buyer should also confirm whether the land was previously registered with the Land Office.
Investment Due Diligence
Performing Investment Due Diligence during the legal review of contracts in Thailand is critical for your investment. You must thoroughly examine the contracts with your chosen developer and know how much experience they have in the industry. You need to be certain that they are capable of delivering the property to you on time and in accordance with your expectations. Due diligence helps you avoid common mistakes in contract negotiations and investment. Listed below are some important areas to consider:
You should also perform Commercial Due Diligence before entering a contract with a Thai company. This step involves reviewing the financial statements and accounting system of the Thai company. In addition, your Thai lawyer will assess your business plan, considering the market and the competition. It may also involve conversations with current customers, competitors, and a more thorough analysis of assumptions and market conditions. In short, Commercial Due Diligence can give you peace of mind that your investment is a sound one.