Legal Update: Due Diligence in Real Estate
Over the past decades, Cambodia real estate has continued to develop with commercial buildings and apartment complexes being built in capital and urban centers throughout the country. This makes Cambodia to continue to be in the Top 10 Fastest Growing Countries in the world. Along with a rapid growth of real estate market in Cambodia and an increasing number of property sale and purchase, a decision-making on investment in a property significantly requires a legal due diligence or title search or check over such property. It is simply called legal due diligence (“DD”).
DD is defined as thorough investigation on researching and verifying the accuracy of a property’s details prior to acquisition or before signing a real estate contract. In other words, it means review and analyze of documents and property inspection before parties actually enter into a binding agreement.
Normally, upon the completion of due diligence work on a property, a DD report will be produced by real estate or legal professionals and submitted to client for profound understanding. Such report provides substantial information on the property and legal owner of property, including but not limited to outstanding encumbrance on the title (long-term lease, mortgage, hypothecs, pledge, liens, servitude, encroachments and recommendation). In addition, it is also important to stretch the investigation to formulate information on whether the property is under pending dispute at the courts or any unresolved inheritance problems or situated in any governmental zoning restriction area.
This DD is mostly involved in inquiry through conducting interviews with local, cadastral authorities, and tax authorities as they are involved in the acquisition and transfer process.
DD is a useful tool for investors to carefully consider whether or not investing on any property. It is recommended to consult with experienced and qualified real estate professional, which is the best choice for you.
Disclaimer
The article is merely for general information purposes. It does not constitute a legal advice on the subject matter. If you have any question or need any assistance, please feel free to contact us at contact@sithisak-lawoffice.com or (+855) 23 6373 168.
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