Most countries have a law on the books to ensure that, before any type of construction or development takes place, an impact study is done to determine whether or not that project would have any lasting and detrimental consequences for the surrounding area.

In Thailand it is called an Environmental Impact Assessment, or EIA, and the legislation has been around since 1981.

An EIA establishes the measures a developer must take to ensure that resources are used efficiently, that the project is beneficial to Thailand economically, and that it is in accordance with the continued development of the Kingdom.

Of course the EIA also determines if a proposed development would have any potentially negative repercussions on the environment.

Developers are fond of mentioning the fact that they have EIA approval, especially when they are selling a development off-plan, and the land is still overgrown with weeds and trees.

But while EIA approval is important, it is only an indication that the ball is rolling. It is possible for EIA to be rescinded if the project does not fully comply.

The assessment may have a broad purview, including air quality, ground pollution, how waste water will be removed or treated, noise pollution, how it affects the surrounding natural environment, how it affects the neighbours, and whether the development is visually acceptable.

In other words, it is about protecting the environment, in the near and long-term, and determining whether a development is for the good of the area and the Thai people.

Depending on the size, most but not all developments do require EIA approval, although receiving it is not a guarantee.  The green light is only given on the condition that it complies with all the regulations throughout the construction process, and the ability to do so can literally change with the weather.

A condo built on a hillside might run into problems if excessive rains cause soil run off, and with it a change in assessment. If design modifications can be implemented to come back into compliance, the project may yet go ahead; if not, it may never be completed.

A cancelled project can leave investors out of pocket, and it may be outside of the developer’s control to do anything about it.

If construction is halted by a ministerial/regulatory decree, the developer (as the recipient of an administrative order) may file for compensatory claims against the government.

The buyer can, in turn, make a claim against developer, but rather than seeing a completed home in 1-2 years, the buyer may instead still be waiting for their money back.

In fact, one changing regulation in Phuket caught some developers unaware in December 2018.  Development on a gradient/slope greater than 35% will no longer be allowed on the island (with an exception for single or single-detached houses not exceeding six meters).

Companies which had not already secured a building permit were prevented from proceeding with construction, leaving some “early bird” investors, who had purchased units off-plan, out of pocket.

Summary

Most people agree that attempting to safeguard the environment during construction is a net positive for everyone, and while it is incredibly rare, a project could be abandoned because of changing EIA assessments, whether the entire structure is finished, or the first brick has yet to be laid.

This is an excerpt from the Thai Residential Phuket Property Guide 2019/20.   To download your free copy, please click here.

Please see some of our other real estate related articles:

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