In the previous article, we explained what Due Diligence is in the case of purchasing resale property or a land plot.
What should you do if you are entering into a contract with a developer at the construction stage, when the apartment exists only in plans, designs, and marketing brochures, and how can you verify the reliability of the deal.
Of course, if there is no title deed for the apartment yet, it cannot be verified.
However, it is both possible and necessary to check the land title deed for the plot where the developer plans to construct the building.
— Whether the land belongs to the developer under ownership rights.
— Whether the land is free from encumbrances or under mortgage at the time of signing the contract.
It is also important to verify the availability of permits at the time of signing the contract.
— EIA approval issued by the Environmental Impact Assessment authority.
— Construction permit.
When entering into a contract at the early construction stage, when the developer has nothing to show except the land plot, it is important to obtain as much information as possible about the developer.
— Corporate documents of the developer. It is necessary to obtain an up-to-date copy from the Department of Business Development. This will provide information about shareholders and directors, registered capital, and the company registration date.
— Financial statements of the developer for previous years. These can be obtained from the tax authority. They provide insight into the actual investments made by shareholders and the value of land acquired for the condominium project.
If the condominium you are buying into is not the developer’s first project, it is worth checking previous developments.
— Whether there were delays in construction deadlines.
— Whether there were other issues, such as commissioning delays or changes in shareholders during construction.
— Inspect the quality of construction in completed projects.
If everything is satisfactory and you are confident in the developer, the next step is to review the draft sale and purchase agreement.
— The contract must comply with the standard condominium sale and purchase agreement approved by the Ministry of Interior of Thailand.
— The contract must be drafted and signed in Thai and English (or Russian).
— Copies of the developer’s documents, the director’s passport, and land title documents must be attached. All marketing materials must also be included as annexes to the contract.
As you can see, the amount of legal work required before you can safely sign the contract is substantial.
It is not advisable to отказаться от professional legal services or rely solely on statements made by real estate agents and developer managers.
The primary market is attractive in terms of price, but it carries additional risks.
These risks can be minimized through proper Due Diligence.
For all questions related to document verification and support of real estate purchase transactions in Thailand, please contact: +66 65 665 1970.
Author: Alexandra Agapitova.
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