Why off-plan property needs more checking
Buying off-plan means paying for a building that doesn't exist yet. You are trusting the developer to finish it, to the standard promised, on land it has the right to build on.
All of that can be checked, and it should be checked before the first payment. My own rules came out of mistakes I made early in my career, which I set out on my lessons page. The list below is what I now apply in my own companies, adapted for buyers.
How to check a developer before buying off-plan: the company
Before Kinnara lists a project, we run background checks on the developer and its directors. Buyers can do their own version of this:
- Company records. Confirm the company exists, who owns it and who runs it. In Indonesia, a developer should hold a business identification number, the NIB, issued through the government's OSS licensing system.
- Foreign-investment status. If foreign shareholders are involved, the company should be a properly licensed PT PMA. Kinnara Capital's Indonesian arm, PT Kinnara Capital Indonesia, is one.
- Finished projects. Ask to see buildings the developer has completed, not just renders of the next one.
- The directors. Search the directors' names, including court records where they are public.
I'd expect anyone dealing with me to do the same. That is part of why my own history, including the parts that went wrong, is published on this site.
Check where your money goes
Ask who receives each payment, in writing. The answer should be the developer you sign with, or an escrow account. It should never be a marketing company, an agent or the platform where you found the listing.
Kinnara, the marketplace I founded, never holds buyer funds for that reason. I explain the wider model in why Kinnara charges no commission.
Staged payments help too. When each payment is tied to a construction milestone, the amount you have at risk at any moment is limited. That is how payments for Saraya villas work, and buyers who prefer can pay the whole price at the start in exchange for a discount.
Get legal review before any money moves
I don't sign anything with money attached until a lawyer has read it. Buyers should hold themselves to the same rule.
- Hire a lawyer who acts only for you, rather than one suggested by the developer or the agent.
- Use an independent notary. In Indonesia, land transfers are recorded by a land deed official, known as a PPAT.
- Read the exit terms. Know what happens if the project is late, changed or cancelled, and how refunds work.
- Check the specification. The contract should describe what you are buying in enough detail to hold the developer to it.
Check the land title at BPN
In Indonesia, the land certificate can be checked at BPN, the national land agency. Your lawyer or notary should confirm:
- what kind of title it is, such as an HGB building right
- that the holder is the developer, or that a clear legal agreement exists with the landowner
- whether anything is registered against the land, such as a mortgage or a dispute
At Kinnara Capital we only buy land once a court ruling and BPN records both confirm the owner. My note on HGB title in Indonesia explains the building right, and the foreign ownership page covers how foreigners can hold property.
Check the permits
Two Indonesian approvals matter most for a new development.
| Approval | What it confirms |
|---|---|
| PBG (Persetujuan Bangunan Gedung) | The building approval. It replaced the older IMB permit in 2021 |
| PKKPR | That the planned use of the land fits the spatial plan and zoning |
Larger projects may also need environmental approval. Ask the developer for copies, and have your lawyer confirm they are genuine and cover the project you are buying into.
The same checks work across Asia
In Thailand, the Philippines or anywhere else in the region, the documents have different names. The questions stay the same:
- Who is the developer, and who is behind it
- Who holds the land, and is the title clean
- Are the approvals in place for what is being built
- Where does the money go, and when
- Has an independent lawyer read everything
If any answer is vague, wait until it isn't. A good developer will understand. A project worth buying will still be there after a week of checking.
This note is general information only, not legal or financial advice. Talk to a lawyer who acts only for you before committing to any overseas purchase.