AIPP does not endorse any DUE DILIGENCE package!
One of the pillars of the AIPP’s Code of Conduct applicable to all members is ‘not to make any misleading statements’.
From time to time, however, the AIPP finds its name is used for various initiatives such as Due Diligence packages offered by property agents, developers and advisers. We’d like to assure members and consumers that this happens relatively infrequently and when it does we make every effort to locate those companies and demand the removal of such inaccurate information.
The amount of products on the market makes it impossible for the AIPP to conduct a due diligence process across all the properties and / or products sold by its members. However it does require its members to undertake this important procedure and also offers guidance to them and to consumers in performing this task.
As part of a comprehensive due diligence procedure the following questions should be asked:
- Ask to see proof of land title, planning permissions, any guarantees that are in place to protect any money paid over prior to completion, the legal structure of the development and so on. In the case of off plan projects you should also ask what would happen should the development not be completed on time or not at all.
- Ask how the resort is being financed? Is a bank lending the money? Is it private investors? Or is the resort being built solely out of investor money and so is reliant on the success of sales?
- What is the purchase procedure? What will happen to clients’ monies? Can deposits be held in a lawyer's escrow account? If it is to be paid to the developer, what safeguards are in place and ask for proof of this. The AIPP advises that funds are only released to developers / agents in staged payments as property is built rather than simply on specific dates regardless of what has been built at the time.
- Do your own research and look at other developments that the developer has done in the past. Have they been completed on time and to the satisfaction of the buyers? Check blogsites/forums to see if anything is being talked about.
This is not intended to be an exhaustive list of due diligence questions, but to serve as a guide for the main areas to start the due diligence process.
Additionally, there is clear guidance for consumers in our ‘How To Buy Overseas Safely’ booklet featured on the AIPP website.
We hope that you would find the above guidance helpful. We value the feedback we receive from consumers and our members. Should you believe that a company makes a reference to AIPP in relation to approving developments, due diligence package etc. please do let us know via email to email@example.com.