Land selection consulting service
Points for land selection or building survey before sale /lease contract
What is Land selection consulting?
When looking for sites, lands, and buildings in ASEAN, Unfortunately, you can meet a malicious local real estate agency and confuse your project. In ASEAN countries, real estate agents are not obliged to explain before making a contract when buying, selling or brokering land or buildings, even if the land or building is defective. Therefore, it is very difficult to pursue the liability for defect warranty against the seller after the contract.
In order to reduce the risk of clients who are considering purchasing or renting an existing building or site, our staff who are familiar with the land and building survey will support you.
Flow of Real Estate Purchase
- "Offer letter/agreement" signed by both parties
- Payment of the deposit to the agent (usually about 2% of the purchase price)
- Create sales contract (SPA)
- 4.8% deposit after signing the sales contract (SPA)
- Prime Minister's Office Economic Planning Agency (EPU), 90% payment after obtaining the state government license
- Land registration (support from contract drafting to registration by Solicitor (Solicitor)
Quote: JETRO(Japan External Trade Organization)
Points to note when buying properties in ASEAN
There are only 4 things to be aware of when buying properties in ASEAN.
- Confirmation of the land registry document
- Confirmation of Land Infrastructure
- Review contract terms
- Investigation of the situation of existing buildings, written investigation (in the case of purchasing or renting an existing building)
1. Problems discovered in Land Registry Document!
After the deposit payment to the existing industrial land, it is the case that we entered the investigation
Three problems have been found:
- The form of the current site differs from the drawing of the registered document
- The procedure for transfer of ownership has been suspended for more than 10 years at the registry office
- In addition to No. 2 above, it may take a considerable amount of time to apply for a building permit or to apply for a building permit.
![](https://staging.plus-pm.com/wp-content/uploads/2021/01/land-img01.jpg)
Solution
2. Problems discovered in the land surrounding infrastructure!
This is a case of our company entered the PM (Project Management) work after purchasing the land.
Although the land price seemed to be cheap and favourable, two problems were discovered as a result of the investigation.
- As it was a newly developed area, the infrastructure of electricity, water supply and drainage, and phone infrastructure was underdeveloped
- When electricity is supplied from a few kilometres away from the substation, only the cost of withdrawal is RM2 Million (about Japanese Yen 60 Million of rate at that time) was required.
![](https://staging.plus-pm.com/wp-content/uploads/2021/01/land-img02.jpg)
Solution
3. Problems discovered in Engagement letter!
This case is about our company entered in the investigation before signing the sales and purchase agreement (SPA) of the developer's development site.
Two problems were identified during the inspection of the Engagement Letter.
- It is a contract condition with using designated contractor (conditions for design and construction by a designated contractor)
- Condition to pay full in prior to completion of land reclamation
Regarding ①, the control of building cost and quality will not work entirely once agree on the condition.
Regarding ②, if a defect is discovered in the development site or construction work and it is stopped due to any reason, it will becomes impossible to receive the land.
Solution
4. Problems discovered in the situation investigation of existing buildings!
This is the case that our company entered into the investigation before the lease contract to rent a second-hand property
Four major problems were discovered.
- If there were more than 5 illegal additions or renovations that are not indicated in the drawings
- Discovered numerous defects such as, the existing equipment and the equipment is different from the drawings, broken, etc
- The ownership of the transformer, etc., remains as the previous tenant, and additional costs were incurred
- Delay in payment of property taxes and other taxes
Solution
Land selection consulting service by Plus PM Consultant
We provide real estate information based on the needs of the clients, and conduct necessary preliminary research from the viewpoint of specialists.
![](https://staging.plus-pm.com/wp-content/uploads/2021/05/land-img03.png)
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