Nice renders and aggressive marketing exist for every project — reliable and troubled alike. The difference shows up not in the pitch deck but in the details: land, permits, the contract, delivery history. Let’s cover concrete red flags that signal risk, and how to check them before you put down a reservation.
Contents
1. Land and the right to build
The most fundamental risk is a problem with the land under the project:
- Land title — the plot should carry a clean Chanote with no disputes or encumbrances.
- Mortgaged land — if the plot is mortgaged to a bank, that creates risk for unit buyers.
- Construction permit and EIA — an environmental impact assessment is mandatory for large projects; its absence is a serious red flag.
Without a clear right to the land, every other attractive feature of the project stops mattering.
🔗 How to verify a title: Verifying a Chanote →
2. Delivery history and portfolio
A developer’s reliability is proven by track record, not promises:
- Delivered projects — properties that genuinely operate, not just “in development”.
- Reviews from current owners — independent sources, not just the developer’s own materials.
- Time in the market — several years of history is more reliable than a company set up for a single project.
- Real property condition — on-site photos and video, not just renders.
A red flag: a developer with zero delivered projects, selling purely on marketing reputation.
3. The project’s financial model
- The developer’s own capital — real money at stake, not just relying on future buyer payments.
- Phasing transparency — a clear construction schedule and what happens to buyers’ money at each stage.
- Independence from ongoing sales — risk is higher if construction is funded entirely by current buyers’ money with no financial buffer.
A red flag: a developer whose financial model depends entirely on a continuous stream of new sales.
4. The contract and terms
A troubled project often shows up in the contract text itself:
- Vague handover dates — no specific dates or penalties for delay.
- No refund conditions — what happens if the project isn’t completed.
- A vague unit description — area, finishing, and what’s included in the price should be precise.
- No right to convert leasehold to freehold (if marketing claims it but the contract doesn’t guarantee it).
A red flag: a developer unwilling to discuss or amend unfavourable contract clauses.
5. Yield promises
- Yield notably above market (e.g. a “15–20% guarantee”) with no clear basis — a typical marketing tactic.
- An opaque payout source — if it’s unclear what funds the guarantee, that’s a risk.
- Blurring gross and net yield in presentations — a figure can look more attractive than the owner’s real income.
A realistic guide for a Phuket pool model is an owner net yield of ~8–10% a year. Figures well above that range with no transparent basis warrant extra scrutiny.
6. Sales tactics and pressure
- Artificial urgency — “today only”, “last unit” with no way to verify the facts.
- Refusing to share documents before payment — the title, permits and contract should be available for review in advance.
- Pressure for a quick decision with no time for due diligence — a reliable developer wants an informed buyer.
7. Red-flag checklist
| Category | Red flag |
|---|---|
| Land | Mortgaged plot, disputed title, no EIA |
| History | Zero delivered projects, no independent reviews |
| Finances | Construction funded entirely by sales, no own capital |
| Contract | Vague dates, no refund conditions |
| Yield | A guarantee well above market with no basis |
| Sales | Pressure, refusing to show documents before payment |
The more flags from this list that coincide, the higher the risk.
8. Case: a flag caught in time
Consider a typical scenario. An investor was considering a project with attractive marketing and an 18% yield guarantee for the first three years. On checking, it turned out the developer had zero delivered properties, the company had been registered less than a year, and the guarantee had no transparent basis — the presentation didn’t explain what funded it. The land, meanwhile, turned out to be mortgaged to a bank with unresolved terms.
The investor walked away before putting down a reservation and chose a project with a transparent history instead: several years in the market, a completed phase 1, a clean land title, and a realistic yield model of ~8–10% net via the pool. The extra check took a few days but removed the risk of losing the entire investment.
Takeaway: red flags rarely appear alone — usually several signs coincide. Checking the land, delivery history, contract and yield realism before paying removes most off-plan purchase risk.
I’ll run a developer and document check on a specific project before you put down a reservation.
[ Enquiry form: developer check before a deal ]
Informational only, not legal advice; the signs described are general risk indicators, not a claim about any specific company. A full check is conducted by a qualified lawyer.