saturday,25/11/2017
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Property due diligence
There are many factors that must be taken into account during due diligence check including but not limited to the following:
1. A seller must be eligible to sell the property in order to exclude claims from a third party for the property object. At that, each case of previous ownership transfer must be checked: making sure that the rights of previous owners were not infringed as per the Law. Otherwise a transaction may be set aside as well as the buyer’s ownership rights for the house, apartment, premises, etc.
2. Not least important is to check if all alterations made in the premises are legal, that they have been approved by conforming authorities. Otherwise it may have bad consequences such as acknowledgement of the alterations being illegal, and the new owner will be held responsible for returning the construction to status-quo at his/her own expense.
Making any alternations to the layout of premises or a building require permission of certain controlling authorities.

3. It is necessary to ensure that the property object is free from encumbrances: pledge, leasing and etc. Upon ownership transfer they will become responsibility of a new owner. If the property is under pledge, any transaction with this property in the future may require pledge holder’s consent. Besides, pledge holder can claim the buyer.
What can happen if no due diligence check is done?

There are quite a number of legal grounds to set a transaction aside:
- falsification of documents, fraud;
- noncompliance with the Law and other legal norms;
- infringed rights of heritors, minors and other persons;
- transaction is executed by a person with limited Legal capability or who is legally incapable;
- transaction is executed under influence by fraud, wrong belief, threat or violence;
- transaction is executed by a person not being of sound mind;
- other grounds.
Therefore, unprofessional approach to Property purchase process bears many risks and potential losses for a buyer, including a risk to lose both property and money. That is why one must realize the importance of due diligence and engage well-qualified specialists. Cost of such service will be compensated by zero complications and secured rights for the property.
 
 
 
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