Between 2024 and 2025, Phuket alone saw more than 140 new condominium and villa projects reach completion, with a further 90 under active construction as of Q1 2026. At the same time, based on our estimates, at least 12% of projects launched between 2021 and 2023 finished more than six months behind schedule, and several developments on Koh Samui were abandoned at the foundation stage. For any buyer committing funds in tranches during construction, a rigorous analysis of the developer and the project is not a formality - it is the only real protection for capital in this market.
Our analysts verify developers and projects on Phuket and Koh Samui using a repeatable seven-step procedure. We inspect construction sites on the ground, review sale and purchase agreements, and cross-check stated progress against observable reality. The methodology below sets out each step with concrete warning thresholds and measurable criteria.
Quick answer
- We monitor 7 due diligence parameters: developer track record, construction financing, build quality, permits, payment schedule, contractual penalties, and the developer company's financial health
- Warning threshold for delays: any prior project by the same developer that ran more than 6 months late
- Safe payment schedule: no more than 30% of the purchase price transferred before structural construction begins
- Payment funds in Thailand go directly to the developer - protection rests entirely on contract structure and developer credibility, not on any third-party holding mechanism
- Full verification requires a confirmed Chanote title deed, a valid building permit (Ror. 1), and - where applicable - an approved Environmental Impact Assessment (EIA)
- Per Bank of Thailand data from 2025, only 35-40% of villa projects on Phuket carry bank construction financing; the remainder rely on buyer pre-sale payments
Options and scenarios
Step 1: Developer track record - how many projects were delivered on time
Our analysis always starts with history. We check the number of completed developments, the company registration date in Thailand's Department of Business Development (DBD), and publicly available financial filings in the Thai commercial register. A developer with at least 3 completed projects, none of which ran more than 3 months late, qualifies as low-risk in our framework. A developer with a single completed project, or no delivery history at all, falls into the high-risk category regardless of how attractive the marketing materials look.
For Koh Samui specifically, we also check whether the developer has built in landslide-prone zones - particularly around Lamai and the hillside areas above Chaweng - because the geological conditions there generate additional construction delays and can affect structural timelines.
Step 2: Construction financing structure
This is one of the most decisive elements in our project analysis. A developer holding a construction loan from a Thai bank - Bangkok Bank and Kasikornbank are the two most active lenders in this segment - has already passed independent due diligence. A bank will not advance funds without verifying permits, land title, and the developer's financial capacity. Based on our data, roughly 40% of condominium projects and approximately 35% of villa projects on Phuket carried confirmed bank financing in 2025.
Projects funded entirely through buyer pre-sale payments are structurally more vulnerable. If sales slow, construction can stall. Our team has documented at least four such cases on Koh Samui between 2022 and 2024.
Step 3: Permit and document verification
We verify the following documents directly with local authorities or with the developer:
- Chanote (Nor Sor 4 Jor) - the only land title category we consider acceptable for a purchase
- Building permit (Ror. 1) issued by the relevant local authority (Tessaban or OrBorTor)
- EIA (Environmental Impact Assessment) - required for projects with more than 80 units or buildings exceeding 23 metres in height
- Developer operating licence in compliance with the Condominium Act for condominium projects
The absence of any single one of these documents is grounds for pausing negotiations immediately.
Step 4: On-site quality inspection of previous projects
Our analysts visit the developer's earlier projects on Phuket or Koh Samui. We assess the technical condition 2-5 years after handover: insulation quality, facade condition, drainage performance (critical in a tropical climate), and the standard of common-area maintenance. We speak with property managers and current owners without disclosing which project we are researching.
In areas such as Bang Tao, Layan, Kamala, and Surin on Phuket, and Bophut and Maenam on Koh Samui, a sufficient number of completed projects now exist to compare stated quality benchmarks against observable reality.
Step 5: Payment schedule - measurable warning thresholds
In Thailand the payment schedule is the buyer's primary contractual protection mechanism. Our team applies the following criteria:
- Reservation deposit: market standard is 100,000-300,000 THB, refundable if due diligence reveals disqualifying issues
- Payment at contract signing: a safe level is 20-30% of the purchase price
- Construction tranches: each instalment should be tied to a specific verified milestone (foundations, structural frame, roof, interior fit-out)
- Final payment at handover: at least 20-30% of the price should be retained until physical completion - this is the buyer's primary negotiating leverage at the inspection stage
Warning threshold: any developer requesting more than 50% of the purchase price before structural construction has started is classified as high-risk in our framework.
Step 6: Penalty clauses and protective provisions
We review sale and purchase agreements for the following buyer-protective provisions:
- Delay penalty: the market standard in Phuket and Koh Samui is 0.01-0.05% per day of the amount paid, for each day of overrun
- Right of termination: the buyer should be able to exit the contract and recover payments if the project exceeds a defined delay threshold, typically 6-12 months
- Material specification: the agreement should include a detailed schedule of finishes, brands, and standards - not generic descriptions
In our review of agreements circulating on the Phuket market in 2025, approximately 30% contained no delay penalty clause whatsoever. We consider that a significant structural risk.
Step 7: Financial health of the developer entity
DBD filings allow us to check registered share capital, ownership structure, and financial results. Our benchmark: for a project with a total development value of 100 million THB, the developer company should hold registered capital of at least 20 million THB (20% coverage). A company registered with 2 million THB in capital delivering a 500 million THB project represents an obvious structural risk, and we flag it accordingly.
Comparison table
| Parameter | Low risk | Medium risk | High risk |
|---|---|---|---|
| Completed projects | 3 or more, delivered on time | 1-2 projects, up to 3 months late | No delivery history or delay exceeding 6 months |
| Construction financing | Confirmed bank construction loan | Mixed (bank loan + pre-sales) | Entirely from buyer pre-sale payments |
| Pre-construction payment | Below 30% of purchase price | 30-50% of purchase price | Above 50% of purchase price |
| Delay penalties | 0.05% per day plus right of termination | 0.01% per day, no termination right | No contractual penalties at all |
| Permits and title | Chanote + building permit + EIA approved | Chanote + building permit, EIA pending | No Chanote or no building permit |
| Company capital vs. project value | Above 20% | 10-20% | Below 5% |
| Inspection of prior projects | Good condition after 3+ years | Minor defects, functional management | Serious defects, no active management |
Risks and mistakes
Mistake 1: Relying on visualisations instead of verified data. High-quality renders showing Andaman Sea views are not a substitute for permit verification and a balance sheet review. Our team has observed projects in Kamala and Rawai on Phuket that collected reservation payments but never progressed beyond the render stage.
Mistake 2: Assuming that Thai law provides the same buyer protections as European legal systems. Thai property law does not provide the same statutory frameworks that buyers from Europe may be accustomed to. Funds transfer directly to the developer. Protection is built through contract structure and counterparty credibility, not through external statutory mechanisms.
Mistake 3: Ignoring currency risk. Buyers paying in Thai Baht face exposure to their home currency exchange rate. Between 2023 and 2025, exchange rate movements against several major currencies reached 15% in some periods - a figure that can materially affect the total cost of an investment when converted back to the buyer's base currency.
Mistake 4: Skipping independent land title verification. On Koh Samui, particularly around Lamai and Chaweng Noi hillsides, boundary disputes and overlapping title claims appear with notable frequency. Independent verification at the local Land Office is not optional - without it, the risk is unacceptable.
Mistake 5: Having no exit plan. Before committing to an off-plan purchase, we analyse secondary market liquidity in the specific submarket. In areas such as Nai Harn and Karon, average resale time on the secondary market ran to 12-18 months based on 2025 data. Buyers should factor that into their investment horizon.
FAQ
How does a payment schedule protect the buyer in Thailand?
In the absence of statutory third-party holding mechanisms, the payment schedule is the primary contractual protection. By tying each instalment to a verified construction milestone, buyers retain meaningful leverage at every stage. The final payment - ideally 20-30% of the purchase price - should be withheld until physical handover and inspection are complete.
How many completed projects should a developer have to be considered credible?
In our methodology, the minimum is 3 completed and handed-over projects, with no individual project running more than 3 months late. A developer with a single completed project is not automatically excluded, but requires significantly deeper financial analysis and stronger contractual protections.
What percentage of the purchase price is safe to pay before construction starts?
Per our standards, the safe ceiling is 30% of the purchase price before structural construction begins. If a developer requests more than 50% at that early stage, we classify it as a high-risk signal warranting serious scrutiny or withdrawal from negotiations.
How can a buyer confirm that the developer has a bank construction loan?
A direct request to the developer is the standard first step. Credible developers will provide documentary confirmation readily, because bank financing demonstrates that an independent financial institution has already verified permits, title, and financial capacity. A refusal to disclose this information is a warning signal.
What is an EIA and when is it required in Thailand?
An Environmental Impact Assessment is required for condominium projects with more than 80 units or buildings exceeding 23 metres in height. On Phuket, additional environmental regulations apply in coastal protection zones. If a project that legally requires an EIA does not have one, authorities can halt construction at any stage - a risk that directly affects buyers who have already paid tranches.
How long does a full developer due diligence process take?
Based on our experience, a complete verification takes 2 to 4 weeks. It includes a site visit and construction inspection, a review of the developer's previous projects, legal document analysis, DBD financial data review, and a full examination of the sale and purchase agreement.
Does due diligence on Koh Samui differ from Phuket?
Yes, in several material ways. The Koh Samui market is smaller, with a more limited pool of active developers. Additional risks include more complex land title verification (a higher proportion of plots carry documents of a lower category than Chanote), seasonal utility supply constraints affecting construction schedules, and higher logistics costs that can affect project viability.
What delay penalty rate should a purchase contract include?
The market standard on Phuket and Koh Samui as of 2026 is 0.01-0.05% per day of the amount paid. Our team recommends negotiating toward the 0.05% rate and including an explicit right to full termination with payment recovery after 6 months of delay.
Can a foreign buyer check Thai developer data independently?
Yes. The Department of Business Development publishes company data via its online portal (dbdatawarehouse.go.th), accessible in both Thai and English. Buyers can verify the registration date, registered capital, shareholder structure, and annual financial statements directly.
Does the Chanote title category matter for a condominium purchase?
For condominiums, the foreign freehold unit title is governed by the Condominium Act rather than the land title directly. However, the land on which the building sits must carry a Chanote - anything less creates risk that local authorities may reject the project or that disputes over the underlying land could affect unit holders. We verify the land title for every project we analyse.
Researching property in Phuket or Koh Samui? Get in touch - our analysts will prepare a data brief for your shortlisted location.