Between 2023 and 2025, more than 140 new condominium and villa projects were registered on Phuket alone. Of those, at least 12 developers missed their original delivery dates by more than six months. On Koh Samui the overall volume is smaller, but based on our estimates, the delay rate in the villa segment runs at 20-25% of active projects. For any buyer purchasing off-plan from thousands of kilometres away, rigorous developer verification is not a procedural formality - it is the primary mechanism for protecting invested capital.
Our analysts apply a seven-step due diligence process before recommending any project to the market. Below we set out each step with measurable warning thresholds, current as of 2026.
Quick answer
- Track record: we check the number of completed projects, delay history, and any legal disputes recorded in public registries (DBD, Chanote data)
- Financing structure: a developer holding a bank construction loan offers materially higher security than one funded exclusively from buyer deposits
- Payment schedule: our warning threshold is any requirement for more than 40% of the purchase price before structural construction has begun
- Permits: a complete permit set includes the Construction Permit (Ror. 1), an EIA report where required (projects above 80 units or in sensitive coastal zones), and a clean land title
- Contractual protections: look for daily delay penalties, milestone-linked payment tranches, and a defined right to withdraw with full refund after a stated overrun period
- On-the-ground inspection: our analysts visit the developer's completed projects in Phuket and Koh Samui to assess build quality at the two-to-three-year mark
Options and scenarios
Step 1 - Assessing the developer's track record
Using the Department of Business Development (DBD) registry, we verify the company's registration date, registered capital, balance sheets, and annual financial reports. A developer with at least three completed projects and an average delivery delay below three months is treated as proven. A delay exceeding six months on more than one project is a formal warning signal - in our internal scoring, such an entity receives a downgraded rating.
Continuity of corporate identity is equally important. On Phuket we regularly encounter structures where a developer registers a new special-purpose vehicle (SPV) for each project. That practice is not inherently problematic - it is common market structure. The concern arises when the new entity cannot be credibly linked to an experienced parent group with a verifiable completion history.
Step 2 - Understanding the construction financing structure
This is one of the most consequential parameters we assess, and simultaneously the one most often overlooked by buyers. A developer that holds a construction loan from a Thai bank - Bangkok Bank and Kasikorn Bank being the most active lenders in this segment - has already passed a bank's own due diligence process. The lender will have verified the land title, permit status, and the company's financial capacity before releasing funds.
A developer financing construction solely from buyer deposits carries full cash-flow risk. If pre-sales stall at 30-40% of units, construction can halt. Based on our market estimates, at least five villa projects in the Rawai and Nai Harn areas of Phuket paused work in 2024-2025 for precisely this reason - insufficient pre-sales combined with no bank financing.
Our standard approach: we ask developers directly about their funding sources and request written confirmation. An evasive or absent response is a red flag.
Step 3 - Payment schedule versus construction progress
In Thailand, buyer payments flow directly to the developer's account. This makes the structure of the payment schedule the primary contractual safeguard available to the buyer.
The market standard we consider acceptable in Phuket and Koh Samui as of 2026 is: 1-5% reservation deposit, followed by 20-30% at contract signing, with the remainder paid in tranches tied to verified construction milestones (foundation, structural frame, fit-out, key handover). The final tranche - a minimum of 10-20% of the purchase price - should be payable only upon physical delivery and sign-off.
Warning threshold: if the developer requires more than 40% of the purchase price before the foundation slab is poured, the buyer's risk exposure is disproportionately high. We exclude such projects from our recommendations.
Step 4 - Verifying the completeness of permits
We check the following documents for every project under review:
- Construction Permit (Ror. 1): issued by the local Tessaban or OrBorTor (Subdistrict Administrative Organisation) covering the project's location
- EIA (Environmental Impact Assessment): required for condominiums of more than 80 units, or for any project located in a protected or coastal buffer zone. On Phuket this applies to a significant share of seafront developments in Bang Tao, Layan, Kamala, and Surin
- Land title: Chanote (Nor Sor 4 Jor) - full title with GPS-grade survey - is the only land document we consider acceptable for foreign-buyer condominium purchases. Nor Sor 3 Gor requires additional boundary verification; plain Nor Sor 3 carries unacceptable boundary ambiguity and we do not recommend projects resting on it
- Condominium Act compliance: for registered condominiums we verify Land Office registration and confirm that the project respects the 49% foreign-ownership quota
Construction activity commenced without a valid Construction Permit is an unconditional reason to exit any transaction. In Bophut and Maenam on Koh Samui, our analysts have continued to observe projects breaking ground before the full permit set is in place - as of Q1 2026, this remains an active risk.
Step 5 - On-site quality inspection of prior projects
Our analysts conduct physical visits to each developer's completed projects in Phuket and Koh Samui. The inspection focus is the condition of buildings two to three years after handover: insulation quality, material performance under tropical climate conditions (persistent humidity, salt-laden sea air), condition of common areas, and actual community maintenance costs versus the figures quoted at the sales stage.
A developer whose completed buildings show significant mould growth, roof leaks, or drainage failures at the three-year mark receives a negative rating in our system - regardless of how competitive the pricing on a new project may appear.
Step 6 - Reviewing the reservation agreement and sale and purchase agreement
We analyse contracts for the following specific protective provisions:
- Delay penalties: the market standard is 0.01-0.05% of the purchase price per calendar day of overrun. A contract with no such clause is not acceptable
- Withdrawal right: the contract should specify after what delay period the buyer may rescind, and on what terms the deposited funds are returned in full
- Material and finish specification: the contract should attach a detailed specification schedule listing specific materials and brands. Phrases such as 'high-quality materials' without further detail provide no legal protection
- Design change provisions: check whether the developer reserves the right to unilaterally alter floor plans, materials, or unit area. An acceptable tolerance is a variance of no more than 3-5% of the contracted area
Step 7 - Legal and currency considerations for foreign buyers
For buyers purchasing a condominium freehold unit, Thai Land Office registration requires proof that the purchase funds originated abroad. The relevant instrument is the Foreign Exchange Transaction (FET) form - also referenced as the SFET for smaller amounts - issued by the receiving Thai bank. Without this document, Land Office registration of foreign ownership cannot proceed.
Currency exposure is a material consideration. The THB/USD and THB/EUR rates moved within ranges that translated to meaningful cost differences across the 2024-2025 period. On a condominium unit in Bang Tao priced at 8 million THB, a movement of even 4-5% in the exchange rate represents a significant real-money variance for a buyer settling in a foreign currency. Our analysts monitor quarterly rate ranges and factor them into total-cost calculations. This is an argument for structuring milestone-linked payments to allow phased currency conversion rather than a single lump-sum transfer.
Comparison table
| Parameter | Class A Developer | Class B Developer | Class C Developer (warning) |
|---|---|---|---|
| Completed projects | 5 or more | 2-4 | 0-1 |
| Average delivery delay | Under 3 months | 3-6 months | Over 6 months or no data available |
| Construction financing | Bank loan plus pre-sales | Partially bank-funded | Funded solely from buyer deposits |
| Payment required before foundation | Up to 25% of price | 25-40% of price | Over 40% of price |
| Construction Permit status | Full permit set before sales launch | Permit in process | Absent or unclear status |
| Delay penalties in contract | 0.01-0.05% per day | Low flat-rate provision | No provision |
| Condition of prior projects (3+ years) | Good, minor wear only | Minor defects | Significant structural or waterproofing faults |
| Financial transparency (DBD) | Full annual reports available | Partial disclosure | No filings or newly registered entity |
Risks and mistakes
Mistake 1: Relying on renderings. Three-dimensional renders and show-suite models are not legal documents. In our review of projects across Phuket, we find discrepancies between marketing materials and the actual contractual specification in more than 30% of cases. Always compare the sales brochure against the specification schedule attached to the contract.
Mistake 2: Skipping land title verification. On Koh Samui - particularly in parts of Lamai and Chaweng Noi - a portion of plots are subject to restrictions because they fall within designated forest reserve land or coastal protection buffers. Purchasing a unit in a project built on such land carries the risk of a demolition order. We verify the land title category before any project enters our review pipeline.
Mistake 3: Paying 100% before handover. The final payment tranche must be withheld until physical inspection, punch-list sign-off, and the formal handover certificate are complete. A developer who insists on full payment before handing over keys is operating outside accepted market norms.
Mistake 4: Underestimating community fees. On Phuket, condominium common-area maintenance fees ranged from 40 to 120 THB per square metre per month based on 2025 data. For a 50 sq m unit, that spread equals roughly 48,000 THB per year - a figure that materially affects net rental yield calculations. We include community fee estimates in every project analysis we publish.
Mistake 5: Calculating returns only in the local currency. A gross rental yield of 5-7% in THB can compress to 3-4% net after accounting for management fees, Thai property taxes, and currency conversion costs. We track these metrics in our quarterly yield monitoring sets and recommend buyers model returns in their own home currency from the outset.
FAQ
How can I verify whether a Thai developer holds a valid Construction Permit?
The Construction Permit (form Ror. 1) is issued by and held on file at the local administrative authority - either the Tessaban (municipality) or the OrBorTor (Subdistrict Administrative Organisation) - covering the project's location. Request a copy from the developer and cross-check the reference number directly with the issuing office. In Phuket, our analysts find this verification typically takes one to three working days.
What is the safest payment schedule for an off-plan purchase in Phuket or Koh Samui?
The market standard we consider acceptable is a maximum of 25-30% of the purchase price paid before construction begins, with subsequent tranches tied to verified construction milestones. The final payment of 10-20% should be held back until physical handover and inspection sign-off are complete. Any schedule requiring more than 40% before the foundation is poured is rated high-risk in our framework.
How many completed projects should a developer have before being considered credible?
Our minimum threshold is two fully completed and handed-over projects, ideally in the same market - Phuket or Koh Samui. A developer with only one project or no delivery history requires particularly intensive financial scrutiny before any recommendation can be made.
How do I check a Thai developer's financial health?
Annual financial statements for Thai companies are filed with and retrievable from the Department of Business Development (DBD) registry, accessible online or at provincial offices. We review registered capital, net debt levels, and net profit or loss for the most recent three years. A company with negative shareholders' equity, or declining revenues alongside an expanding project pipeline, raises concerns in our analysis.
What is the difference between a Chanote and a Nor Sor 3 land title?
Chanote (formally Nor Sor 4 Jor) is a full ownership title with GPS-surveyed boundaries and is the only land document we consider appropriate for foreign-buyer condominium freehold registration. Nor Sor 3 Gor permits transactions but requires additional boundary verification. Plain Nor Sor 3 indicates imprecise boundaries and significantly higher legal risk - we do not recommend investments in projects built on Nor Sor 3 title land.
What delay penalty terms should a developer contract include?
The accepted market standard is a daily penalty of 0.01-0.05% of the purchase price for each calendar day of delay beyond the contracted handover date. The contract should also specify a maximum overrun period - typically 6 to 12 months - after which the buyer holds the unconditional right to rescind and recover all paid amounts in full.
What should an on-site inspection of a developer's prior projects cover?
Our inspection checklist covers: roof and waterproofing integrity after at least two full monsoon seasons, moisture and mould evidence in bathrooms and on exterior walls, window and door frame condition (salt-air corrosion resistance), drainage and stormwater management functionality, and the condition of pool infrastructure and common areas. Tropical climate conditions in Phuket and Koh Samui are an unforgiving test of build quality.
Is an EIA report always required for a condominium development in Phuket?
An Environmental Impact Assessment is required when a condominium project exceeds 80 units, or when it is located in or adjacent to a protected coastal, forest, or environmental buffer zone. On Phuket this threshold captures a large share of seafront projects in Bang Tao, Layan, Kamala, and Surin. We verify EIA status as a standard element of our permit review.
What does the FET form do and why does it matter for foreign buyers?
The Foreign Exchange Transaction form (FET, or SFET for amounts below a certain threshold) is issued by the Thai receiving bank when funds are transferred into Thailand from abroad. It serves as official proof that the purchase funds originated outside Thailand. Without a valid FET form corresponding to the full purchase price, the Land Office will not register the unit under a foreign buyer's name. Our analysts flag FET documentation as a non-negotiable procedural requirement.
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