Buying From a Land Developer? Questions to Ask Before the Deposit

When you buy from a land developer, your deposit usually goes in early, often before you hold title, and sometimes before the land has even been subdivided into stands. That is not necessarily a problem. Many developments are genuine. But it does mean the moment you pay is the moment you are most exposed. These are the questions to put to any developer, and to get answered in writing, before a single dollar changes hands.

Seven questions to ask before you pay

1. Do you actually own this land? Ask to see the title deed in the developer's own name, then confirm it at the Deeds Registry. If they only hold an agreement with the original owner or the council, you are buying a promise, not land. See Cession Is Not Ownership.
2. Is it approved for subdivision and for houses? Ask for the approved subdivision plan and confirmation of zoning from the local authority. Without these, your stand may not legally exist yet, and some land should never be sold at all. See Wetlands and Floodlines.
3. Is it serviced, and who pays? Roads, water and sewer reticulation cost money. Confirm what is already in place and exactly what you will be expected to fund later.
4. When and how do I get title in my name? Ask for the route and timeline to a registered title deed, in writing. A development with no clear path to title is a development with no clear path to ownership. See Your Deed Is Real, But Is It Registered?
5. Where does my deposit go? Insist your money moves through a conveyancer or a proper trust account, never a personal account and never loose cash. Payments tied to real milestones are safer than one large upfront sum.
6. What happens if the project stalls or fails? Ask what protects your money if the scheme collapses, and get the answer in writing. Silence here is an answer in itself.
7. Is all of this in a signed, written agreement? Verbal promises are worth nothing when things go wrong. Have a legal practitioner read the agreement before you sign, not after.

The deposit is the moment of maximum risk

Once your money is in, your leverage is gone. A short legal check of the developer's title and your agreement, before you pay, costs a fraction of what it costs to chase a deposit that has vanished. If a deal has already gone wrong, see The Agent Vanished.