Due Diligence & Compliance
Trust, But Verify — Every Time
Due diligence is the single most important step in any Thai property transaction or business investment. It is not a formality, not a box to tick, and not something the seller or developer can do on your behalf. It is the comprehensive investigation that reveals what the sales brochure doesn’t — and in Thailand’s property market, where title insurance does not exist, where not all title deeds carry the same rights, and where enforcement against illegal structures and nominee arrangements has intensified sharply through 2024–2025, it is the only thing standing between a sound investment and a total loss.
On Koh Samui and Koh Phangan, the risks are specific and recurring: properties built without permits or in violation of zoning laws, title deeds that don’t match physical boundaries, land sold with undisclosed mortgages or liens, developers who mortgage entire plots while selling individual units, unregistered leases that cannot be enforced in court, company structures designed to circumvent foreign ownership restrictions, and sellers who don’t have legal authority to sell. We’ve seen every one of these — some more than once — and the common factor is always the same: the buyer skipped due diligence, relied on the agent’s assurances, or used the seller’s lawyer.
At Samui Legal & Tax, we conduct due diligence exclusively for the buyer or investor — never for the seller, never for the developer, and never for the agent. Our reports are independent, thorough, and designed to give you the information you need to make an informed decision: proceed, renegotiate, or walk away.
What We Investigate
Comprehensive Investigation Before You Commit
Property Title Verification
The foundation of every property due diligence: a direct inspection of the title deed at the Land Office. We verify: the type of title (Chanote, Nor Sor 3 Gor, Nor Sor 3, or lesser titles — each with different rights and limitations); the registered owner matches the seller; there are no encumbrances on the back of the title (mortgages, liens, leases, usufructs, servitudes, superficies, or court orders); the land area matches what is represented; and the title is not subject to any government claims, expropriation notices, or pending litigation. For condominiums, we verify the unit’s individual title (Chanote for the unit), the condominium’s master title, and the foreign ownership quota (must be below 49% of total floor area). This check is non-negotiable for every transaction.
Zoning & Building Compliance
A property may have a clean title but sit on land zoned for a use that doesn’t match what’s built on it — or planned for it. We verify at the local Municipal or Sub-district Administration Office: the property’s zoning designation (residential, commercial, agricultural, conservation, or special zone); whether the intended use is permitted under the zoning regulations; whether all building permits have been issued for existing structures (house, villa, pool, retaining walls, etc.); compliance with height restrictions, setback requirements, floor-area ratios, and environmental regulations; and whether an Environmental Impact Assessment (EIA) was required and, if so, approved. On the islands, building without permits or in violation of zoning is alarmingly common — and the consequences include demolition orders, fines, and inability to obtain utilities or sell.
Physical Survey & Access
Documents tell one story; the ground tells another. We arrange physical boundary confirmation to ensure the land’s actual boundaries match the official survey plans on the title deed. This includes: verifying boundary markers are in place and undisputed, confirming the land area matches the title, checking for encroachments (neighbouring structures, roads, or utilities crossing the property), and — critically — confirming the property has legal access to a public road. A property without legally registered access is effectively landlocked, regardless of what path or road physically exists today. Access rights (servitudes) must be registered at the Land Office. On hilly island terrain where properties are accessed via shared driveways or unpaved roads, this check prevents one of the most common and costly problems foreign buyers encounter.
Developer & Seller Investigation
Knowing who you’re buying from matters as much as what you’re buying. We conduct background investigations on the developer or seller: company registration status and history at the Department of Business Development (DBD); financial statements and audited accounts; litigation history (pending lawsuits, judgments, enforcement actions); track record on previous projects (completed, delayed, or abandoned); current financial health indicators (debt-to-equity, cash flow, credit status); and whether the developer holds the required Housing Development Licence for residential projects. For off-plan or under-construction purchases, this investigation is essential — we’ve seen developers go bankrupt mid-project, leaving buyers with deposits paid and no property delivered. We also verify whether the developer has mortgaged the master land title to a bank — a common practice that can leave individual buyers unable to obtain clean title deeds.
Company Due Diligence
For investments involving Thai companies — whether acquiring shares, entering a joint venture, or purchasing property held through a company structure — we conduct comprehensive corporate investigations: verification of registration at the DBD (company extract, memorandum, articles of association, latest annual filings); shareholder structure analysis (identifying ultimate beneficial owners, checking for nominee patterns, verifying that Thai shareholders are genuine); director and authorised signatory verification; review of financial statements (3–5 years), tax compliance history, VAT registration, and Social Security filings; assessment of outstanding liabilities, contingent obligations, and pending litigation; and verification of any licences, permits, or regulatory approvals required for the company’s business activities. For companies holding land, we specifically assess the risk of nominee structure challenges under the Foreign Business Act.
Nominee Structure Risk Assessment
Using Thai nominee shareholders to hold land on behalf of a foreigner is illegal under both the Land Code and the Foreign Business Act — and enforcement has intensified sharply. The Land Department and DBD now actively investigate companies suspected of being nominee structures: examining whether Thai shareholders genuinely contributed capital, whether they have the financial capacity to justify their shareholding, and whether the company has legitimate business operations beyond holding property. Penalties include criminal prosecution, imprisonment, forced sale of the property, and company dissolution. We assess the risk profile of any company structure you’re considering purchasing into: analysing shareholder backgrounds, capital contribution documentation, board composition, voting rights, and operational history. If the structure carries nominee risk, we advise on legal alternatives — leasehold, usufruct, superficies, or restructuring options.
Condominium Quota Verification
Foreigners can own condominium units freehold — but only within the 49% foreign ownership quota (measured by total registrable floor area of all units in the building). If the quota is full, a foreigner cannot register ownership, regardless of what the developer or seller promises. We verify the current foreign quota status directly with the Land Office and the condominium juristic person (management body). We also confirm: the unit has a properly issued individual Chanote title; the condominium is properly registered under the Condominium Act; there are no outstanding common area maintenance fees or special assessments; the condominium rules don’t contain restrictions that affect your intended use; and the purchase price will be transferred in foreign currency with a proper FET (Foreign Exchange Transaction) form — which is required for foreign freehold registration.
Lease & Contract Review
For leasehold properties (villas, houses, land), the lease agreement is the entirety of your legal protection — there is no title deed in your name. We review every lease before signing: term and registration (leases over 3 years must be registered at the Land Office to be enforceable — an unregistered lease is worthless in court); renewal terms (promises of “30+30+30” year renewals are unenforceable under Thai law — we explain the real position); permitted use, subletting, and transfer rights; building and improvement rights; succession clauses (does the lease survive the lessee’s death?); termination triggers and landlord remedies; and dispute resolution mechanisms. We also review sale and purchase agreements, reservation agreements, and construction contracts — ensuring payment milestones, completion guarantees, defect liability periods, and penalty clauses are properly documented.
Ongoing Compliance Reviews
Due diligence doesn’t end at purchase. For foreign-owned companies, leasehold properties, and regulated businesses, ongoing compliance is essential to maintain legal status and avoid penalties. We provide: annual corporate compliance reviews (shareholder register, director filings, AGM compliance, statutory audits, tax filings); Foreign Business Act compliance monitoring (ensuring company structures remain within legal parameters as regulations evolve); property compliance checks (lease registration status, building permit validity, zoning changes affecting your property); AML and sanctions screening (for companies subject to reporting obligations under the Anti-Money Laundering Act B.E. 2542); and regulatory change alerts — Thailand’s regulatory environment is actively evolving, with nominee enforcement, digital registration systems, and new investment rules changing the compliance landscape. We keep you informed and compliant as rules change.
Not All Land Titles Are Created Equal
The type of title deed determines your ownership rights, the property's transferability, and whether it can be used as collateral. Always verify before committing.
Chanote (Nor Sor 4 Jor)
Full ownership with GPS-surveyed boundaries. Freely transferable, mortgageable, and leasable. The only title suitable for foreign condominium ownership and most property transactions.
Nor Sor 3 Gor
Confirmed right of possession with accurate surveyed boundaries. Transferable and mortgageable. Can be upgraded to Chanote. Acceptable for most transactions but check for boundary accuracy.
Nor Sor 3
Right of possession based on aerial survey — boundaries less precise. Transferable but requires a 30-day public notice period before transfer. Higher risk of boundary disputes. Can be upgraded.
Sor Kor 1 / Possessory
Tax receipt or occupancy certificate — not a true title deed. Cannot be sold, mortgaged, or leased. Establishes land use but not ownership. Avoid for investment purposes entirely.
The Risks That Cost Foreign Investors the Most
Every one of these risks has resulted in significant financial losses for foreign buyers on Koh Samui and Koh Phangan. Due diligence identifies them before money changes hands.
Undisclosed Mortgages & Liens
Property sold with existing bank mortgages, court liens, or tax claims recorded on the title — buyer inherits the encumbrance and may lose the property.
Illegal Building & No Permits
Structures built without permits or in violation of zoning. Authorities can order demolition, refuse utility connections, and impose fines on the owner.
Nominee Company Structures
Company using Thai nominees to circumvent foreign land ownership restrictions. Subject to criminal prosecution, forced sale, and company dissolution.
No Legal Road Access
Property physically accessible via an informal path or shared driveway but without registered servitude. Legally landlocked and drastically devalued.
Foreign Quota Exceeded
Condominium building where foreign ownership already exceeds 49%. Buyer cannot register freehold ownership regardless of purchase completion.
Developer Insolvency
Off-plan purchase from developer who goes bankrupt mid-construction. Deposits lost, construction abandoned, and legal recovery uncertain.
Unregistered Leases
Lease over 3 years not registered at the Land Office. Unenforceable in court — tenant has no legal protection and no recourse against the landlord.
Boundary Disputes
Physical land boundaries don't match the title deed survey. Neighbour encroachments, overlapping claims, and disputes that can take years to resolve.
From Instruction to Written Report
A structured investigation that gives you a clear, documented basis for your investment decision.
Scope
Define the transaction, identify the property or company, and determine which checks are required based on the type of investment and risk profile.
Investigate
Conduct all checks — Land Office title search, municipal zoning verification, DBD company search, physical inspection, and seller/developer background research.
Analyse
Cross-reference findings, identify discrepancies, assess risk levels, and evaluate whether identified issues are resolvable or deal-breaking.
Report
Deliver a comprehensive written Due Diligence Report with findings, risk assessment, and clear recommendations — proceed, renegotiate, or withdraw.
Advise
Walk through the findings with you, answer questions, and — if proceeding — guide contract negotiations, structure optimisation, and closing procedures.
The 15 Due Diligence Questions Investors Ask Most
Ranked by frequency across our consultations. Click any question to expand.
Are “30+30+30” year lease renewals enforceable?
No. Thai law limits leases to 30 years. Promises to renew are personal contracts, not registered property rights, and do not bind future owners. If the landlord dies or sells, the "renewal" is often unenforceable. A registered 30-year lease is secure; a 90-year promise is marketing.
Can I check a Thai title deed myself?
Not effectively. Records are in Thai legal terminology and held at the Land Office. Interpreting encumbrances, cross-referencing survey plans with boundaries, and verifying zoning or building permits requires professional legal expertise and multi-office investigations.
How do I verify a developer’s track record?
We check DBD financial filings, project completion history (timing and quality), litigation records, and whether they hold a Housing Development Licence. For island projects, local intelligence is used to identify developers who have failed to deliver in the past.
How much does due diligence cost and how long does it take?
Standard property due diligence costs THB 30,000–60,000 (5–10 business days). Comprehensive reports including physical surveys and company investigations cost THB 60,000–100,000+ (2–3 weeks). We recommend starting this before signing binding agreements or paying non-refundable deposits.
Should I use the seller’s lawyer or get my own?
Always get your own. The seller's lawyer represents the seller's interests. Independent counsel is essential because the buyer bears almost all risk in Thailand. Your own lawyer will conduct due diligence, negotiate terms, and ensure the structure protects you, not the seller.
What are the risks of buying off-plan in Thailand?
Key risks include developer insolvency (lost deposits), master mortgage risk (units not released from bank debt), construction quality issues, significant delays, and design changes. We mitigate this by checking developer health, mortgage status, and ensuring contracts include milestone protections.
What compliance obligations do I have after buying?
Condo owners pay maintenance fees and taxes on rental income. Leaseholders must ensure the lease remains registered. Company owners have the heaviest load: annual AGMs, audited financial statements, monthly tax/social security filings, and maintaining FBA-compliant shareholder ratios.
What is a Chanote and why does the title type matter?
A Chanote (Nor Sor 4 Jor) is the most secure title with GPS-surveyed boundaries and full rights to sell/mortgage. Lower titles like Nor Sor 3 Gor use aerial surveys and carry boundary dispute risks. Sor Kor 1 is merely a tax receipt and cannot be legally sold or mortgaged. Condominiums must have a Chanote.
What is checked in a company due diligence?
Investigation includes: Legal status (DBD records), Shareholder structure (beneficial ownership/nominee risk), Director authority, 3–5 years of audited financial statements, Tax compliance (VAT/WHT filings), Litigation history, and verification of all operational licences and permits.
What is checked in a property due diligence report?
It covers: Title verification (owner, encumbrances), Zoning/Land-use (permitted activities), Building permits (compliance with height/setback rules), Physical survey (boundary and road access check), Foreign ownership compliance (condo quota or lease terms), Seller/developer track record, and Tax/Utility status.
What is the 49% foreign quota for condominiums?
Foreigners can only own up to 49% of the total registrable floor area in a condo building. The Land Office tracks this; if the quota is full, you cannot register freehold ownership. We verify this status directly with the Land Office rather than relying on the developer's word.
What is the FET form and why does it matter for condominiums?
The Foreign Exchange Transaction (FET) form proves funds were sent to Thailand in foreign currency for a condo purchase. It is mandatory for registering freehold ownership at the Land Office. Sending Thai Baht or using informal channels will result in a refusal to register the transfer.
What is the risk with nominee company structures?
Nominee structures use Thai nationals to hold land for foreigners to bypass the law. This is illegal under the Land Code and Foreign Business Act. Enforcement has intensified in 2024–2025, with authorities investigating capital sources. Penalties include criminal prosecution, forced sale of property, and company dissolution.
What recourse do I have if I discover problems after purchase?
Very limited. Thai law expects buyers to exercise "ordinary prudence" (due diligence). If a problem was discoverable before purchase and you didn't check, you may have no claim. Litigation is slow and expensive. Prevention through due diligence is the only effective protection.
Why do I need due diligence if the agent says everything is fine?
Agents represent the seller and have a financial incentive to close the sale. Thailand has no title insurance system; the buyer bears all risk. Due diligence (costing THB 30k–100k) prevents losses of millions by uncovering undisclosed mortgages, illegal structures, or nominee risks that agents may not disclose or even be aware of.