Due Diligence
Due Diligence
Our Process
Before committing to the purchase of real estate, it is crucial to conduct thorough due diligence to gather comprehensive information beyond the title deed. For instance, if you are buying an under-construction property in Thailand, verifying the developer’s possession of all necessary permits and land ownership is essential. This investigative process, commonly known as due diligence, should be completed prior to signing any sale and purchase agreements or making any purchase of property payments unless the reservation fee. Only proceed with the transaction once ownership is officially transferred to you.
01 Planning the case
Due diligence involves gathering and analyzing various legal, financial, and physical aspects of the property to assess potential risks and make informed decisions.
Effective due diligence involves several crucial steps:
- Defining The Scope: Clearly outline the specific aspects of the property to be investigated, such as title verification, encumbrance checks, zoning compliance, and physical condition assessment.
- Identifying Resources: Determine the necessary resources, including legal professionals, property inspectors, and financial experts, to conduct thorough due diligence.
- Establishing A Timeline: Set a realistic timeline for completing the due diligence process, considering the complexity of the property and the involvement of various parties.
- Allocating Budget: Estimate the costs associated with due diligence, including professional fees, inspection charges, and data retrieval expenses. At this point if relevant issues have surfaced that need to be legally addressed, we compile the case with all necessary documentation, following thorough due diligence.
02 Evaluate situation
The legal evaluation stage of due diligence involves a thorough examination of the property’s legal, financial, and physical characteristics.
- Title Verification: Confirm the seller’s rightful ownership of the property by reviewing the title deed and ensuring there are no encumbrances or disputes or court order.
- Zoning Compliance: Verify that the property’s intended use complies with local zoning regulations and there are no restrictions on development or usage.
- Permits and Approvals: Ensure all necessary permits and approvals for construction, renovations, or any alterations have been obtained and are valid.
03 File the case at court
Filing a case in court may become necessary in certain situations where due diligence reveals legal issues or disputes that require judicial intervention.
Common scenarios that require court filing:
- Title Disputes: If the property’s ownership is contested or there are conflicting claims to the title, a court action may be necessary to resolve the dispute and establish clear ownership.
- Encumbrance Removal: If encumbrances, such as liens or mortgages, need to be removed from the title, a court order may be required to legally enforce their removal.
- Breach of Contract: If a seller has breached the terms of the purchase agreement, the buyer may need to file a court case to seek remedies, such as performance of obligation, claim for refund of purchse price or damages.
04 Gather more information
Due diligence is an ongoing process, and additional information may need to be gathered as the transaction progresses.
Sources of additional information can include:
- Public Records: Consult public records, such as tax assessments, building permits, and zoning documents, to verify information and uncover potential issues.
- Third-Party Experts: Seek expertise from appraisers, engineers, environmental consultants, and other professionals to assess specific aspects of the property.
- Local Knowledge: Engage with local real estate agents, community members, or government officials to gain insights into the property’s history, neighborhood dynamics, and potential risks.
05 Result
Due diligence in property law is a crucial process that ensures informed decision-making and risk mitigation in real estate transactions. By thoroughly investigating the legal, financial, and physical aspects of a property, potential buyers and investors can gain valuable insights and protect their interests. After taking all the steps listed above, we assess the status of any running cases before concluding any recommendations for our client.