Phuket remains one of the most attractive property destinations in Southeast Asia—but like any emerging market, it carries its fair share of risks. While the vast majority of transactions are safe and legal, the absence of regulation and oversight has allowed rogue developers, agents, and schemes to operate unchecked.

Many buyers approach the Phuket real estate market with a tourist mindset: they fall in love with the view, the lifestyle, and the “deal.” But investing in property is vastly different from booking a holiday. Without a full understanding of the legal framework, ownership laws, and due diligence process, you could be exposing yourself to serious financial risk.

Here’s what every buyer needs to understand.

1. Lack of Regulation in the Property Market

Unlike in many Western countries, there is no central licensing authority for real estate agents or developers in Thailand. This opens the door to:

  • Unqualified agents with little or no legal knowledge.

  • Unethical sales tactics, such as misrepresenting ownership structures.

  • Conflicts of interest, especially when agents are paid commissions by both sides.

This means the responsibility to verify everything falls on the buyer. There is no guarantee that what you are told is legally or factually accurate.

Related reading: The Importance of Sound Legal Advice When Buying Real Estate in Phuket

And if you are not familiar with the term “due diligence” and would like to know more about what is it and why it is important, then you might find the following article helpful:

Understanding the Importance of Due Diligence and Exactly What Due Diligence is When Buying Real Estate in Phuket

2. Developer Risk – Not All Projects Are Safe

Unfortunately, Phuket has seen numerous cases where developers have:

  • Failed to secure proper building permits or environmental approvals.

  • Exceeded height or zoning restrictions (especially in protected areas).

  • Over-promised and under-delivered, with finished projects not matching marketing materials.

  • Gone bankrupt before completion—leaving buyers with partial builds and no recourse.

Some developers offer seemingly attractive prices, but these can come with hidden dangers. Always investigate the track record of the developer, previous projects, and financial standing.

Also read: The Risks of Buying Off-Plan Property in Phuket

3. Land Title Problems

The land beneath a Phuket property is just as important as the property itself. Many buyers do not realise there are different grades of land titles in Thailand. Some are not legally suitable for building or may be contested.

Risks include:

  • Buying on unofficial or unregistered land.

  • Buying on squatters’ land or encroaching on national park or forest areas.

  • No legal access to the property (no registered road access).

If you do not conduct a full land title search, you may discover too late that your dream villa is on illegal or encumbered land.

Learn more: Land Titles in Phuket – What Buyers Should Know

And if you’d like to know more about the risks of buying into a development built on dirty land, you may find the following article helpful:

The Problem with Dirty Land and Illegal Land Titles – Land Scams and the Risks to Buyers of Phuket Real Estate

4. The Danger of Losing Your Deposit

Many developers ask for large reservation deposits or staged payments during construction—often without using escrow accounts.

If the project fails, or is delayed indefinitely, the deposit can be lost. There are no government-mandated protections for buyers in such situations.

We strongly advise:

  • Only paying deposits once a proper Sales & Purchase Agreement is in place.

  • Using a reputable lawyer to verify developer licenses and title deeds before transferring funds.

5. Problematic Legal Structures

Foreign buyers sometimes purchase property using Thai nominees, shell companies, or layered leasehold arrangements that are not legally valid—or are only legal under narrow conditions.

In the worst cases, these structures are struck down by the courts, and ownership reverts to the Thai authorities or landowner.

Essential reading: Buying Property in a Thai Spouse’s Name – What You Must Know

6. Legal Advice – Who You Use Matters

Some buyers make the mistake of using lawyers recommended by the agent or developer. This can lead to:

  • Biased legal opinions.

  • Skipping key checks on land titles or developer compliance.

  • Rubber-stamped contracts with weak buyer protections.

A good rule of thumb: Your lawyer should work for you, and you alone. Independent legal counsel is the single best protection against costly mistakes.

FAQ – Phuket Property Risk Questions Answered

Q: Is it risky to buy property in Phuket?
A: Yes, especially if you don’t perform due diligence. Risks include land title issues, developer defaults, misleading legal structures, and a lack of market regulation.

Q: How do I reduce risk when buying?
A: Work with a licensed real estate agent, hire an independent lawyer, conduct a title search, and verify all permits and zoning laws.

Q: What is the biggest mistake foreign buyers make?
A: Trusting too easily and failing to investigate ownership structures or the developer’s background before transferring funds.

Q: Can I get my deposit back if a project fails?
A: Usually not. If there is no escrow or legal clause protecting the deposit, it’s difficult to recover once funds are transferred.

Final Thoughts: Due Diligence is Non-Negotiable

Buying property in Phuket can be a fantastic investment—but only when done right. Don’t let paradise blind you to reality. The risks are real, but so are the rewards when you proceed with caution and expertise.

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