How to Verify a Property Developer Before You Buy: 15 Essential Checks
Developer risk is the single largest source of loss in off-plan property investment. A completed property purchased from a private seller carries no developer risk — what you see is what you get. An off-plan purchase requires you to pay money today for something that will be delivered in 12, 24, or 36 months — and the outcome depends entirely on whether the developer is credible, financially sound, and capable of delivering what they promised.
International buyers are particularly vulnerable. Distance makes it harder to visit sites, meet management, and detect problems early. Language barriers and unfamiliar legal systems complicate due diligence. And developer marketing materials are, by design, optimised to create confidence rather than to disclose risks.
Work through these 15 checks before signing anything or paying any deposit.
Check 1: Company Registration and Incorporation
Start with the basics. Any legitimate developer should be able to provide:
- Company registration number and the jurisdiction of incorporation
- Names of directors and shareholders (beneficial ownership)
- Date of incorporation — how long has the company been trading?
- Registered address — verify this is a real office, not a serviced address used by dozens of companies
In the UK, this information is freely available at Companies House (companies.gov.uk). In Dubai, the DED (Department of Economic Development) publishes company registration details. Spain: Registro Mercantil. For Thai and Indonesian companies, official records are accessible but may require a local intermediary.
Red flag: The developer's entity was incorporated within the last 12–24 months with no established track record, or the operating entity is a special purpose vehicle (SPV) with no parent company guarantee.
Check 2: Completed Projects — Visit and Speak to Residents
The most reliable predictor of a developer's ability to deliver your project is whether they have delivered similar projects before. Obtain a list of the developer's completed projects (not just ones under way) and:
- Visit at least one completed project in person
- Assess build quality — not show-home quality, but the quality in occupied units
- Speak to residents independently (knock on doors, join the residents' management company meeting, find the residents' Facebook group or forum)
- Ask about: delivery timeline vs promised; defect resolution after handover; developer's responsiveness to post-completion issues
Red flag: The developer has few or no completed projects, or residents of completed projects report persistent quality issues, delayed defect repairs, or developer unresponsiveness.
Check 3: Financial Health
A developer building a large project will commit many millions before receiving significant sale proceeds. Developer insolvency mid-project is a real risk — it has occurred in every market covered by this guide.
Where financial information is available:
- Request audited accounts (the developer may decline, but the request tests their transparency)
- Check Companies House or equivalent for filed accounts if the developer is UK-incorporated
- In markets with a public market listing, check regulatory filings
- A construction lender providing development finance is indirect evidence of financial underwriting — banks conduct their own due diligence before advancing funds
Red flag: The developer declines entirely to share any financial information, has CCJs (UK court judgments) registered, or is known to have had projects repossessed by lenders.
Check 4: Planning Permission — Confirmed, Not Just Applied For
"Planning approved" and "planning pending" are very different statements. Many projects are marketed on the strength of planning applications, before approval is granted. Approval may be delayed or refused.
Confirm with the developer:
- Has full planning consent been granted (not just applied for)?
- By which authority and when?
- What are any conditions attached to the consent (timing requirements, infrastructure obligations)?
- Request a copy of the planning consent — it is a public document in most jurisdictions
Red flag: The developer is marketing a project where planning approval has not yet been granted, or planning has been granted conditionally with major conditions unresolved.
Check 5: Escrow Compliance and Stage Payment Protection
How are your stage payments protected if the developer becomes insolvent before completion?
| Market | Escrow Requirement |
|---|---|
| Dubai | Mandatory — RERA requires all buyer payments to go to a registered escrow account |
| Thailand | No mandatory escrow; stage payments often paid directly to developer |
| Spain | New-build — bank guarantees required on off-plan deposits since 2015 (Ley 20/2015); enforce this |
| Bali | No mandatory escrow; high risk |
| Greece | Notarially registered pre-sale agreement provides some protection; no mandatory escrow |
| Cyprus | Title deed reforms improved protection; developer bank guarantees available and should be requested |
| Egypt | No mandatory escrow; stage payment risk is real |
In any market without mandatory escrow, request a bank guarantee or insurance policy to protect stage payments. Some developers will provide this; others will not. If a developer refuses to provide any protection for stage payments, treat this as a significant risk factor.
Check 6: Construction Lender
Ask whether the project has a construction loan from a recognised bank or institutional lender. If it does:
- The lender has conducted independent due diligence on the developer's financial capacity, the project viability, and the planning position
- The loan agreement will include construction milestones that the developer must meet to draw funds — providing a degree of external oversight
- In the event of developer difficulties, the lender has a contractual interest in project completion or an orderly realisation
Red flag: The project is entirely self-funded with no external construction finance — this is not inherently problematic (some established developers with strong balance sheets self-fund) but removes the independent underwriting check.
Check 7: Contractor Credentials
Developers do not always build their own projects — they often appoint main contractors. Research the main contractor:
- How long have they been trading?
- What projects have they delivered previously?
- Are they a recognised firm in the relevant market, or a newly established entity?
- Is there a performance bond or warranty in place from the contractor?
Red flag: The developer cannot (or will not) confirm who the main contractor is, or the contractor has a history of disputes, insolvency, or project abandonment.
Check 8: On-Time Delivery Record
Ask directly: "What is the developer's track record on delivering projects on time?" Then verify this independently by speaking to owners of completed projects.
In Southeast Asian and Middle Eastern markets, some delay is common — but persistent, significant delays (12 months or more) on multiple past projects are a warning sign. Delays cost buyers: you have paid for a property you cannot use, rent, or sell as planned, and your capital is tied up earning no return.
Check 9: Regulator Registration
Dubai: Any developer selling off-plan property must be registered with RERA and the project must be registered in the Oqood system. Verify at dubailand.gov.ae. Any broker selling on the developer's behalf must hold a RERA broker licence.
Thailand: Off-plan condominium projects must be registered with the Land Department. Foreign ownership transfers require the land office to verify the condo corporation and quota.
Spain: Developers must be registered to engage in real estate activities; projects require building permission (licencia de obras) from the relevant municipality.
Cyprus: The Cyprus Land Registry (Department of Lands and Surveys) holds title and planning information.
Egypt: Developers in major resort areas are typically registered with the relevant tourism or investment authority.
Check 10: Warranty and Defect Liability
A credible developer provides a clear warranty structure:
- Structural defect warranty: 10 years (standard in Spain and UK; request equivalent in all markets)
- Waterproofing warranty: 3 years minimum
- Finishing and fixtures: 12 months minimum
Confirm what entity provides the warranty — if it is the developer's SPV with no parent company guarantee, the warranty is only as valuable as the developer's ongoing solvency.
Check 11: Completion Guarantee
Can the developer provide a bank guarantee or insurance-backed completion guarantee? This is a policy or instrument that ensures construction is completed — or buyer funds are returned — if the developer defaults. This is distinct from an escrow account (which holds your payments) and applies to the completion of the building itself.
Completion guarantees are available in more regulated markets; in less regulated markets, they may require negotiation.
Check 12: Sale and Purchase Agreement Review
Before signing any SPA (or equivalent purchase contract), instruct your own independent lawyer to review it. Key provisions to examine:
| Provision | What to Check |
|---|---|
| Completion date | Is it fixed? What are penalties for late delivery? |
| Specification schedule | Is the specification fully described, including floor area, finishes, and fixtures? |
| Price | Is it fixed? Any circumstances allowing developer to change it? |
| Payment schedule | Are payment milestones tied to construction progress? |
| Defect liability | What period applies and how are defects notified and remedied? |
| Exit rights | Can you exit if completion is delayed beyond a specified threshold? |
| Developer default | What happens to stage payments if developer becomes insolvent? |
| Force majeure | How broadly is it defined? Can it be invoked to avoid completion penalties? |
Never sign an SPA without independent legal review, regardless of how much pressure the developer or agent applies.
Check 13: Exit Provisions
Understand your exit options before you enter:
- Pre-completion transfer: Can you sell your off-plan purchase (your SPA rights) before completion? Is the developer's consent required? Is there a fee?
- Developer default: If the developer fails to complete, what are your remedies? Do you have a right to terminate and recover payments?
- Your own default: What happens if you cannot make a stage payment? Understand the penalties before assuming you can always comply.
Check 14: Insurance
From exchange, ensure:
- Buildings insurance covers the construction period (in many markets the developer holds this; confirm)
- Your stage payments are covered by the escrow or guarantee arrangements discussed above
- Public liability during construction period
On completion, arrange a specialist policy appropriate for the property's use (residential, holiday let, buy-to-let).
Check 15: Independent References from Previous Buyers
The final and often most revealing check: find and speak to buyers of the developer's previous projects who were not introduced to you by the developer.
Methods:
- Join expat forums and Facebook groups for the relevant market and ask directly
- Visit completed buildings and speak to residents
- Search property investment forums (Property118, Expat Forum, relevant Reddit communities)
- Ask the lawyer or agent you are using if they know of the developer's reputation from other clients
Red flag: Multiple independent buyers reporting similar complaints — late delivery, defect disputes, unresponsive management, or misrepresentation in sales materials — is the clearest possible warning sign.
Summary: The Developer Risk Matrix
| Risk Area | Minimum Acceptable | Best Practice |
|---|---|---|
| Track record | 2+ completed projects | 5+ completed similar projects |
| Stage payment protection | Bank guarantee | Mandatory escrow (Dubai model) |
| Planning | Full consent granted | Pre-let/pre-sold evidence also present |
| Financial health | Trading 3+ years | Audited accounts provided |
| SPA | Independent lawyer review | All provisions above addressed |
| Regulator registration | Confirmed | Independently verified with regulator |
How Global Investments Can Help
We apply our own developer credibility assessment to every off-plan project we present to clients. We will not recommend a developer to a client without having reviewed their track record, met their management team, and confirmed their regulatory standing.
When we introduce a developer, we can share our due diligence summary and connect you directly with owners of the developer's previous projects. We also work with independent lawyers in each market who will review the SPA on your behalf before any commitment.
Off-plan property can deliver excellent returns when the developer is credible and the market is right. Our job is to ensure you are not taking developer risk you have not properly assessed. Speak to our team before committing to any off-plan purchase.
This guide is for general information only. Due diligence requirements vary by market and change over time. Always instruct an independent local lawyer before signing any property purchase contract.
Frequently asked questions
What is an escrow account and why does it matter for off-plan property?
An escrow account holds stage payments made by buyers in a ring-fenced account controlled by a neutral third party (typically a bank or regulated escrow agent), rather than passing directly to the developer. Funds are released to the developer only as construction milestones are verified. In Dubai, RERA requires developers to hold buyer payments in escrow — this significantly reduces the risk of developer insolvency leaving buyers with neither property nor refund. In markets without mandatory escrow (Thailand, Spain, Bali), buyer protection is much weaker.
What should I look for in a Sale and Purchase Agreement for off-plan property?
Key SPA provisions include: a fixed completion date with financial penalties for late delivery; a detailed specification schedule describing finishes, fittings, and measurements; a defect liability period (typically 12 months for finishing, 3 years for waterproofing, 10 years for structural); conditions under which you can exit if completion is significantly delayed; and clear definition of what happens to your stage payments if the developer defaults. Never sign an SPA without independent legal review.
Is a 'guaranteed rental income' from a developer a sign of a good investment?
Not necessarily — it can actually be a red flag. Rental guarantees are sometimes funded from an inflated purchase price: the developer builds the 'guarantee' into what you paid. Once the guarantee period ends, you are left with a property at above-market value earning market-rate rental income. Always have the purchase price independently valued and assess what the property will earn after the guarantee period.
How can I check a developer's track record independently?
Research the developer's completed projects by name, visit them in person if possible, and speak to residents directly — not buyers the developer introduces to you. Search online for the developer's name combined with 'complaints', 'delays', or 'problems'. Check property owner forums and expat community groups (Facebook groups for expats in the relevant market are often informative). Search the local court records system if accessible.
What regulation exists for property developers in Dubai and how does RERA help buyers?
RERA (Real Estate Regulatory Agency, part of the Dubai Land Department) regulates the Dubai property market. It requires developers to register all off-plan projects, hold buyer payments in escrow, and obtain RERA approval before marketing. RERA's Oqood system registers off-plan sales and provides buyer protection. You can verify any Dubai developer's registration and project approvals on the DLD website. Buyers of unregistered projects or from unregistered brokers have minimal legal protection.
This guide is for general information only and does not constitute financial, legal or tax advice. Programme rules, prices and tax rates change; verify current requirements with a qualified adviser before acting.