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Issues for the Buyer – re-assurance of adequate land title due diligence
Legal Matters: September - November 2007“What is land title due dilligence?”
“A land title due diligence search traces the history of the evolution of the land title from its original “root” as possessory title (Sor Kor 1) to ensure that the land title has been correctly and legally issued to the seller. The issues that should be addressed by your legal advisor include (amongst other issues); whether each previous owner of the land acquired legal title to the land, whether the land title has been upgraded correctly and legally; whether there are sufficient rights of access to the land from the nearest public road, whether the land is the subject of a mortgage loan and whether the land is subject to any servitude rights. It is also important for your legal advisor to establish whether or not building is permitted upon the target land. If the land is national forest reserve or above 80 metres from sea level, building may be prohibited. It is also advisable to commission an aerial survey to monitor height restrictions and general building regulations in the area”.
(Desmond Hughes, Partner)
“Why is land title due diligence so important?”
“The maxim of Caveat Emptor or ‘let the Buyer beware’ is relevant here as a Buyer will have limited recourse against a Seller in respect of defects in the land title after monies have changed hands. Unlike in many European jurisdictions, there is no state compensation payable to persons who acquire illegally issued land title in Thailand. In the event of a significant defect in the land title, at best, a buyer will have difficulty re-selling the property, particularly to a prudent purchaser who carries out adequate land title due diligence. A detailed historical land title report will minimise any risk this occurring”.
(Kris Limcharoen, Partner)
“Is Chanote the highest form of land title in Thailand?”
“It is correct that Chanote title is the best title available in Thailand, however, the mere existence of a Chanote title document does not eliminate the need to carry out a full land title due diligence. It is necessary to establish whether or not the Chanote title document has been issued correctly and legally and ultimately, this requires a full historical land title due diligence search back to the “Root” of Possessory title”.
(Desmond Hughes, Partner)
“If the project units are already half sold out, surely the other Buyers would not have bought into the development if there was an issue with land title?”
“This is a common question raised by Buyers seeking to minimize the supplementary expenses associated with acquiring property in Thailand. It may be the case that the project is built upon several land plots with different titles some of which are legally issued and others illegally issued. A full historical land search to the root of title will allay any fears with regards to these issues”.
(Kris Limcharoen, Partner)
This article is one in a series of articles for Exclusive Homes and was co-written by Desmond Hughes (Partner) and Kris Limcharoen (Partner) based in the Phuket, and Bangkok offices of Belmont Limcharoen respectively and now with an office in Koh Samui.
Information supplied by:
Limcharoen Hughes Glanville (Phuket)
T: +66 (0) 7634 2882-4 F: +66 (0) 7634 2885
E: Phuket@Limcharoen.com
Limcharoen Hughes Glanville (Bangkok)
Tel: +66 (0) 2635 5071-3 Fax: +66 (0) 2635 5074
E: Bangkok@Limcharoen.com
Limcharoen Hughes Glanville (Samui) Co., Ltd
T: +66 (0) 7724 6185 - 7 F: +66 (0) 7724 6188
E: Samui@Limcharoen.com
Limcharoen Hughes Glanville (Ho Chi Minh City)
T: +84 938 8469021 E: HoChiMinhCity@Limcharoen.com
www.limcharoen.com
