Buying Property from a Developer: Due Diligence Checklist
Due diligence on a pre-selling property is not just about the unit — it is about the developer building it. This checklist covers every verification a buyer should complete on a developer before signing anything or paying anything.
When you buy a pre-selling property from a developer, you are not buying a property — you are buying a promise. The unit does not exist yet. What you are purchasing is the developer’s contractual commitment to build it, complete it to specification, and deliver it on schedule. Whether that commitment is worth the money you are paying depends almost entirely on the developer — their regulatory standing, their financial stability, and their track record of delivering what they promised to previous buyers.
Most due diligence guides for property buyers focus on the property itself: title verification, encumbrances, RPT clearance. For pre-selling purchases, those checks are secondary — because there is no physical property to verify yet. The primary due diligence for a pre-selling buyer is due diligence on the developer. This article builds that specific checklist.
Check 1: DHSUD Registration and License to Sell
Every developer selling residential property in the Philippines must be registered with the Department of Human Settlements and Urban Development (DHSUD) and must hold a current License to Sell (LTS) for the specific project being marketed. These are not optional formalities. A developer without a valid LTS is operating illegally. Paying a reservation fee to such a developer gives you no regulatory protection and no enforceable rights under the Maceda Law or DHSUD’s dispute resolution framework.
The DHSUD maintains an online registry of registered developers and licensed projects. Verify both the developer’s registration and the specific project’s LTS number before engaging. Do not accept the developer’s sales team’s verbal assurance that the registration exists — look it up yourself at the DHSUD website or request the actual LTS number and verify it directly.
Also verify the developer’s Certificate of Registration (CR) from DHSUD separately from the LTS. The CR is the developer’s company-level authorization to engage in real estate development. The LTS is project-specific. Both must be current and valid for the specific project you are considering.
Check 2: The Developer’s Track Record on Previous Projects
A developer’s DHSUD registration tells you they are legally authorized to sell — it does not tell you whether they actually deliver what they sell. The track record check is the most important due diligence step for assessing the real-world risk of a pre-selling commitment.
What to find out: how many projects has the developer completed? Were those projects delivered on or close to the scheduled completion date, or were there significant delays? What is the typical gap between the projected completion date in the Contract to Sell and the actual delivery date across their portfolio? Have buyers of previous projects reported material differences between the promised specification and the actual turnover condition?
Where to find this information: buyers’ groups and communities on social media platforms, particularly Facebook groups for specific developments, are among the most candid sources of information about developer performance. OFW communities in particular frequently share detailed accounts of their experiences with developers, positive and negative. Online forums and reviews on property portals also contain buyer feedback. A developer with a consistent pattern of complaints about delays, specification gaps, or post-turnover defect resolution is a developer whose promises you should weight accordingly.
For publicly listed developers, financial disclosures filed with the Philippine Stock Exchange contain project completion data, delivery timelines, and management commentary on delayed projects. These are formal, legally accountable records — more reliable than marketing materials but requiring some experience to interpret.
Check 3: Active Complaints at DHSUD
DHSUD accepts formal complaints from buyers against developers for non-delivery, specification misrepresentation, unlawful cancellation of contracts, and other violations. A developer with active DHSUD complaints across multiple projects is a developer with documented compliance problems.
Some complaints can be viewed through DHSUD’s online systems. Others require a direct inquiry. A credible due diligence effort for a significant purchase — any unit above PHP 2,000,000 — is worth the time to make a formal inquiry to DHSUD about the developer’s complaint history. Ask specifically about the project you are considering, not just the developer company generally, as large developers may have strong track records on some projects and poor ones on others.
Check 4: The Developer’s Financial Standing
A developer who runs out of money before completing your unit cannot deliver it regardless of what the Contract to Sell says. Financial standing is a real due diligence consideration, particularly for smaller or newer developers whose projects represent a significant portion of their total portfolio.
For listed companies, annual reports and quarterly financial disclosures provide revenue, debt levels, project pipeline, and management discussion of financial conditions. For unlisted developers — which covers the majority of Philippine real estate developers — direct financial information is harder to obtain. Proxy indicators of financial stability include: the scale and age of the developer’s completed portfolio, their active project pipeline, the depth of their sales network, and any publicly available information about their banking relationships or project financing.
A developer marketing a single project with no completed track record, no visible banking or project financing relationships, and an unusually aggressive price point is carrying financial risk that a buyer accepts as part of the purchase. Assess that risk honestly before committing.
Do not pay a reservation fee or any other amount to a developer whose DHSUD registration and License to Sell you have not personally verified. A developer without a valid LTS has no legal authority to sell, and you have no DHSUD-backed protection if the project fails to deliver. Verification takes five minutes. The consequences of skipping it can be permanent.
Check 5: Review the Contract to Sell Before Signing
The Contract to Sell (CTS) is the document that defines your rights and the developer’s obligations. A CTS that is reviewed only after signing — or worse, never reviewed at all — is a contract whose terms you do not know until you need to enforce them.
Have a lawyer review the CTS before signing. Specifically, the review should cover: the committed completion and turnover date, the grace period the developer is allowed before delay penalties apply, what the penalty rate is for delays beyond the grace period, the exact unit finish specification that the developer is contracted to deliver, the conditions under which the developer can extend the completion date without penalty, and the buyer’s remedies if the developer fails to deliver.
A CTS with no delay penalty, an unlimited or overly broad force majeure clause, and vague unit specification language is a contract that heavily favors the developer. This does not mean you should not sign — it means you should negotiate improvements to those terms, or at minimum understand that your protection in a delay scenario is limited by what the contract says.
Questions to Ask the Developer’s Sales Team
The developer’s sales team is trained to present the project favorably. The questions that produce the most useful information are not the ones the presentation is designed to answer.
Ask: What is the current construction progress on this project, and can you show me documentation? What is the developer’s most recently completed project, and how does its actual delivery date compare to the original projected date? How many units in this project are currently under Contract to Sell, and what percentage have been released? Who is the project’s main contractor, and how long have they worked with this developer? What happens to my payments if the developer cannot complete the project?
A sales team that answers these questions clearly, with supporting documentation where applicable, is providing a level of transparency worth noting positively. A sales team that deflects, generalizes, or becomes evasive when these questions are asked is providing a different kind of signal — and that signal is worth acting on.
This guide covers the full comparison between pre-selling and RFO options — including the risk profile of each and the conditions under which pre-selling makes financial sense.
The quality of a developer’s responses to pointed questions is itself a form of due diligence. A developer who answers questions about delivery track record, construction progress, and contract remedies clearly and with supporting documentation is demonstrating a transparency standard that the sales presentation alone cannot establish. A developer who becomes evasive at these questions is providing information — just not the kind they intended.