Pattaya Daily News

04 March 2010 :: 12:03:57 pm 14599

Real Estate Sale & Investment Pitfalls in Thailand

Real Estate is a very high value industry, which inevitably makes it a prime stamping ground for rip-off merchants and scam-artists, particularly in Thailand, sometimes dubbed the Land of shark smiles”. Naïve, would-be investors make perfect victims for the unscrupulous, who delight in taking the shirts from off their backs, especially in Fun Town, where anything goes and scams are legion.
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Common Issues Faced by Buyers & Sellers

The following are the 12 most common pitfalls that real estate investors face in Thailand:

1. Property owners use title deeds as insurance on personal loans without registering them with the Land Department Office. Owners then obtain a second deed fraudulently and sell or mortgage the property to a third party. The property is then effectively owned by two parties who are forced to begin costly legal proceedings against the original landlord to rectify the situation.

2. The property owner is paid a deposit or full payment for the property, but fails to transfer the title deed to the new owner. The legal owner then resells the property to another buyer, transferring the deed and taking off with double the purchase price.

3. The investor is shown around a property that is not, in fact, the one they will be purchasing. The landlord may even go to the extent of exchanging property numbers. This is common practice if the property being sold is unremarkable or less than presentable.

4. The landlord sells the property in plots, taking deposits from several buyers before transferring the deed to a single buyer after completion of a final payment.

5. The conman professes to be a bona fide estate agent, advertising property and giving inspections before taking a deposit and fleeing without a transaction taking place.

6. Developers often promise numerous inclusions into the price of the property that is being built, which are frequently hype. Commonly, plumbing and electrical facilities are left unconnected, and supposed fixtures and fittings turn out to be non-existent in what transpire to be empty shells.

7. The conman steals the title deed and changes the name. The property is then either used to secure a personal loan and/or sold on to an unsuspecting investor who is faced with a costly legal battle to claim ownership of the property or reimbursement. The conman then escapes with the loan money, house deposit or full purchase amount.

8. The conman posses as a legitimate buyer, asking for the title deed, before copying it and returning the copy to the landlord. The conman will then sell the property using the original title deed.

9. The original title deed to a property is fraudulently used when intercepted by a conman who poses as a land surveyor or mortgage agent. The title deed with a blank authorization ticket provided is then sold; usually the conman will flee after a deposit is obtained.

10. The landlord is deceived by a family member who transfers the property into their name using a fake signature and ID before selling the property.

11. A fraudulent real estate agent obtains his commission from landlord professing to have obtained a deposit for the property in question. On some occasions, the agent has been known to obtain the title deed from the landlord in cooperation with the buyer. They then transfer the deed and sell the property without the original owner receiving any payments.

12. An investor pays the deposit on a property at which point the title deed is transferred into his name. The seller is cheated when the buyer does not pay the remaining balance. Property is then sold onto another party by the fraudulent investor who makes a massive profit from his original deposit.

Preventative Measures

The following is a list of measures that would significantly decrease the risk when buying or selling land or property in Thailand:

1. Keep the title deed secure; treat it like your passport. If you happen to lose the deed, go immediately to the Land Department Office to have a new one issued, making sure they cancel the validity of the lost deed.

2. If attempting to acquire insurance on a title deed, make sure you check the provider’s registration with the Land Department. If using the deed as security on a loan or for mortgage purposes, always notify the Land Department Office.

3. Avoid providing anyone with your title deed. If is necessary, give a signed photocopy. At no point should you provide a third party with your title deed and identification details.

4. Do not leave any blank authorisation ticket with your signature around. If you are to use an authorisation ticket, provide every detail about the reason for its use before handing it to the relevant company or person.

5. Before deciding to enter into a legal transaction with a seller, make sure to properly inspect the premises yourself, check the location, and condition, in addition to measuring the area before agreeing to the listed price. Check the property with the Land Department before handing over any money to the seller.

6. After you have finished payment on the property, make sure the seller transfers the land title deed immediately at the Land Department Office.

7. When selling a property, do not transfer the title deed until complete payment has been made.

8. Keep checking your property every 3 months if you are not the occupant to ensure that no one has attempted to move the boundaries or change the address. Check the details with the Land Department Office at this time.

9. Do not rely on a property agent for everything; maintain contact with the buyer or seller directly throughout the transaction.

10. Only purchase property from the title deed holder or an entrusted agent, never complete a transaction with someone acting on the owner’s behalf.

11. Any property transactions have to be managed through the Land Department Office. An invalid, unsigned or unregistered title deed is only as good as a blank piece of paper.

12. Once again, do not rely solely on a sales or buying agent, check the entire property yourself, maintain contact with the buyer or seller and check all the relevant information yourself with the Land Department.

In short, your own due diligence will significantly contribute to a successful real estate transaction in Thailand. Never rely on a third party in this high value transaction. Although agents are an integral part of most real estate transactions, personally check all proceedings; vigilance may just save you hundreds of thousands of dollars. If dealing privately, then work on a “no trust” basis and be sure to educate yourself in the Thai real estate law and practices.

 

 

 

 

Photo : Wanida
Reporter: Warina Punyawan
editor@pattayadailynews.com

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Related Features :

Scam Alert: Condo Stealing on the Rise

This is the account of a foreigner who through trusting 3rd parties too much has had to pay a heavy price. He wants to remain anonymous, so for the purposes of this article we’ll call him Fred. Fred came to Pattaya and, like many others, thought he’d take advantage of the relatively low prices in the property market at the time and began to make substantial investments in condominiums.

Photo : PDN staff   Category : Legal

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