THE ADDRESS Magazine Summer 2014 - Page 51

company. If there is an advertisement offering the sale of land to a foreign national, make sure that the ownership structure is clear. This means that investors should be wary of any sale that purports to sell a freehold interest in land to a foreign national or entity. Every investor should be keenly aware of their ownership rights in Thailand to avoid wasting time and money. Once a potential investor finds that perfect investment, the next step is to determine whether proceeding with the opportunity is everything it seems to be. In order to determine the relative safety of a real estate investment in Thailand, the investor should conduct comprehensive due diligence checks on the property and the seller. Such checks should include a search of the title history of the land to determine whether the seller has legal authority to sell it, whether the land has been issued a legal title, and whether the land is free of mortgages, liens and other encumbrances. The last thing an investor wants to discover after purchasing real estate is that the title wasn’t issued legally, or the neighbour has a right to build a road where the buyers were planning to place their new villa. Furthermore, investors should know whom they are dealing with, by conducting a litigation check on the seller and, if a Thai company, its directors, to ensure there are no cases in which the land could be used to satisfy a judgement. Another key component in determining the suitability of a particular real estate investment is whether the property has a legal right of access. Even when the land title is issued legally, investors should be aware of how that property can be accessed. Investors should understand whether the land is adjacent to a public road, is granted a legal right of access over another parcel of land through a registered easement with the local land office, or whether such right of access is merely contractual, or by unwritten mutual understanding. The most secure right of access over a parcel of land is through a registered easement or direct access to the public road. A contractual agreement or handshake agreement between two or more landowners will not provide sufficient security and could cause an investor years of costly litigation. After determining that the purchase of a particular parcel of land is a safe option, investors should consider whether a building already constructed, or a proposed building on the property, complies with local zoning and national environmental regulations. Even when the land title is issued legally, investors should be aware of these restrictions and make sure that the land can be used for the envisaged purpose. There are many parcels of land with perfect beach access or mountainside vistas that will not allow construction of that dream villa or resort, due to zoning or environmental regulations. Every investor should carefully consider what the real estate investment will be used for and monitor to make sure that any existing or proposed construction is in compliance with Thai law and building permit requirements. Before diving head-first into the Thai real estate market, investors should carefully consider current events, the real estate market, and the relative safety of a particular investment. It is strongly advised that every investor consult with qualified legal counsel before proceeding with a purchase. Do not be fooled by what other investors have done, or go with a deal that sounds too good to be true. It probably is. Be knowledgeable about the investment and have a clear understanding of the risks and challenges associated with real estate in Thailand. Paul Volodarsky is a senior associate with Limcharoen, a regional law firm specializing in property, hospitality, and corporate/ commercial matters in Southeast Asia. Paul is based in Bangkok. 51