How to Vet a Property Developer Before You Buy Off-Plan
An off-plan home is only as good as the company building it. Before you pay a deposit, check who really owns the developer, what it has delivered before, how the project is funded, whether the land and permits are in order and what past buyers say. This guide sets out the checks step by step.
The most important decision in an off-plan purchase is not the floor plan or the view. It is the developer. The same apartment can be a sound purchase from a company with a long record of on-time handovers and a frustrating, years-long dispute with a company that overreached. Most of the information you need to tell them apart is available before you pay anything, if you know where to look.
Start with the legal entity
The name on the billboard is often not the name on your contract. Developers commonly set up a separate company for each project, which limits the parent group's liability if that project struggles. That is normal, but it means you should ask:
- Which company signs the sales contract?
- Who owns that company, and who are its directors?
- Does the parent group guarantee the project company's obligations, in writing?
- What assets does the project company hold besides this plot?
Your lawyer can search the official company register in the relevant country. In the UK that is Companies House; most countries have an equivalent mercantile or commercial register. Look for filed accounts, recent changes of directors, charges registered against the company and any insolvency notices.
Check what the developer has delivered
Track record is the best single predictor of future behaviour.
- Completed projects. Ask for a list with addresses, number of units and the promised and actual handover dates.
- Visit one. Walk around a development completed a few years ago. How has it aged? Are communal areas maintained? Are there visible repairs to facades or roofs?
- Talk to owners. Residents and owners' associations will tell you how snagging was handled and how the developer responded to problems.
- Search disputes. Look for court cases, regulator actions and complaints. Local-language searches often reveal far more than English ones.
A young developer is not automatically a bad one, but a short history means you should lean harder on legal protections such as guarantees and escrow.
Confirm the land and permits
Ask your lawyer to confirm:
- the developer owns the land or has a registered right to build on it
- whether the land is mortgaged, and to whom
- that a valid building licence has been issued for the project as marketed
- that the number of units, height and use match the licence
- whether any appeals or challenges to the permit are pending
In some markets, projects are marketed before permits are granted. Paying a deposit at that stage is a bet that the permit will be issued as expected; your contract should allow you to recover your money if it is not.
Understand how the project is funded
Developers fund construction through a mix of their own equity, bank loans and buyers' payments. The questions to ask:
- What proportion of the cost is covered by buyers' instalments?
- Is there a bank construction loan, and is it secured on the land?
- Where are buyers' payments held: escrow, a guaranteed account or the developer's general account?
Projects that rely mostly on buyers' money are vulnerable if sales slow. Bank-financed projects have an outside party monitoring progress, but the bank's security may rank ahead of buyers if the developer fails, unless the law or your contract protects you.
Market-specific protections
The legal framework changes how much checking you need to do yourself.
| Market | Key protection to verify |
|---|---|
| Spain | Bank guarantee or insurance certificate for each payment, held in a special account |
| Portugal | Building licence, land registry entry; negotiate a bank guarantee |
| Dubai | Project registered with the regulator, payments into the project escrow account |
| Turkey | Registered sales promise agreement, permit and title checks |
| Thailand | Licence and land title; for condominiums, confirmation of the foreign-ownership quota |
Where the law is strong, check that the developer is actually complying with it. Where it is weak, the developer's own financial strength and the contract carry more weight.
Read the contract like a sceptic
The sales contract is drafted by the developer, so it naturally protects the developer. Have your lawyer look at:
- Completion date and long-stop date. When must the home be finished, and how late can it be before you can cancel?
- Delay compensation. Is any payable, and is it meaningful?
- Specification changes. Can the developer substitute materials, change layouts or reduce floor area, and by how much?
- Floor-area tolerance. A clause allowing a few percent variation in area without any price adjustment is common; know the limit.
- Assignment. Can you sell your contract before completion, and at what fee?
- Default. What happens to your payments if you miss one, and what happens if the developer does?
Watch the sales process
How a developer sells is often a clue to how it builds.
- Pressure to reserve the same day, "last unit" claims and steep discounts for immediate payment are warning signs.
- Guaranteed rental returns can be useful, but check who pays them and whether they are funded by an inflated price.
- Agents paid high commissions by the developer are not independent advisers.
Keep checking after you sign
Due diligence does not end with the deposit. Off-plan projects can run for years, and the earlier you notice a problem, the more options you have.
- Visit or commission site visits at intervals, and compare progress with the construction schedule and the payment milestones.
- Ask for progress reports with photos, and in markets with escrow, check the regulator's published completion percentages where available.
- Watch the company. New charges against the developer, changes of directors, late filing of accounts or court claims by contractors are early warning signs.
- Talk to other buyers. A buyers' group, even an informal one, gives you collective leverage and shared information.
- Keep records. Store every payment receipt, guarantee certificate and piece of correspondence in one place.
If the project stalls, act early. Ask your lawyer what the contract and local law allow, whether guarantees can be called, and what deadlines apply. Buyers who wait for a developer's reassurances to come true often find that the time limits for claims have quietly passed.
A pre-deposit checklist
- Identify the contracting company, its owners and directors.
- Visit at least one completed project and talk to its owners.
- Have your lawyer confirm land title, charges and permits in writing.
- Confirm how your payments will be protected.
- Review the contract terms on delay, specification and default.
- Take your time, regardless of what the sales team says.
Good developers welcome these questions because they have good answers. A developer who resists them has told you most of what you need to know.
Questions, answered
- How can I check a developer's track record?
- Ask for a list of completed projects with addresses and handover dates, then compare the promised dates with the actual ones. Visit at least one finished development, speak to residents or the owners' association, and search the company and its directors in the official company register.
- Should a developer own the land before selling off-plan?
- Ideally yes, or hold a registered right to build on it. Your lawyer should check the land registry to confirm who owns the plot and whether it is mortgaged, because a bank loan secured on the land can take priority over buyers if the project fails.
- Is a well-known brand name a guarantee of quality?
- No. Large projects are often built by a separate company created for that development, sometimes with a recognisable name attached through a licensing deal. Check which legal entity signs your contract and what assets it actually has, not just the brand on the hoarding.
