Legal and Regulatory Risks
Legal systems and regulations vary from country to country. Mistakes in the transaction process can result in significant financial losses – or even the complete loss of your investment.
How to Minimize This Risk
Legal complexities can be among the most unexpected and serious challenges when buying property abroad – sometimes even leading to a complete asset loss. In Bali, for example, inexperienced investors sometimes purchase villas without verifying the necessary permits and documentation, including a construction permit, zoning certificate, and proof of tax compliance. If local authorities discover an unauthorized development, it can be demolished without compensation.
Chief Legal Officer, BIRDNECK Investments
Understand the legal framework and property regulations
Study local laws on ownership rights, land use, taxation, and other legal factors that could affect your property.
Review all contracts thoroughly before signing
Make sure every term and condition aligns with your interests. If anything is unclear, seek legal advice. Always have documents translated into your native language for full understanding.
Verify the seller’s ownership rights
Ensure the seller has full legal authority to transfer ownership and that no legal disputes or restrictions apply to the property.
Work with a trusted local attorney
Find a lawyer specializing in real estate law in your target country and consult them on all legal aspects before making any commitments.
Stay informed about changing laws
Real estate regulations can shift over time. Factor this into your investment strategy and be prepared to adapt to new requirements.