The Overseas property industry magazine Overseas Property Professional (OPP) reports a flurry of activity by various trade associations and legal firms after the successful launch of due diligence products called International Developer Information Packs (IDIP). OPP has started a debate within the industry concerning due diligence and whether it needs such a product. IDIP offers legal protection to overseas investors purchasing off plan property abroad. IDIP has also launched The IDIP Federation where property developers and agents alike submit their properties to full legal inspection by lawyers.
IDIP signed up 10 developers in its first week of launch “As soon as I saw what the IDIP Federation was aiming to do I leapt at it,” said Derek Keith of SmartHomes International. “This is a tremendous agents’ tool. My main interest is my client so a one-stop package that I know is all legal takes away the headache of due diligence and with it a whole raft of doubts and insecurities.”
The Association of International Property Professionals AIPP has given IDIP a luke warm reception stating “To make it succeed, it needs to work for the industry as a whole and for the consumer. I don’t believe that one company delivering a due diligence product will itself change the market; to do that, it needs a major industry buy-in and that needs industry confedence. I’ve said it before and I will say it again: no company will change this market; only a collective initiative from the industry has any chance of really shaping our industry’
AIPP is currently working on due diligence guidelines for its members to ensure agents are asking the right questions about their developers and FOPDAC is compiling an updated checklist for members in 200 countries to refer to when it comes to undertaking due diligence. Chairman Steve Emmett says: “We are preparing a form containing the essential questions that agents need to ask before they get into the business of selling. Many members have produced their own versions over time, and this is a way to consolidate and present the vital information in a comprehensive format which is of great benefit to people new in the business
IDIP director David Thrift disagrees. He told OPP that the IDIP Federation isn’t intended as a trade body but a platform to highlight those agents who have had IDIP reports undertaken for all the developments they market. He added that the self regulatory trade bodies like AIPP and FOPDAC fall short of protecting the consumer, saying: “They vet agents but not what they are selling.”.”
Peter Esders of The International Law Partnership is clear about the benefits of www.ismyhouselegal.com and how it should be used, saying: “We believe that developers will want to put their developments in the guide because consumers hunting for a certain destination can then see the range of reputable developments in their chosen area.” He qualified this by saying that it is a marketing tool primarily and not intended to be legal advice, which still must be sought.
Homesgofast.com overseas property portal executive Nicholas Marr ’ We have had such a positive response to IDIP, for the first time investors , developers and consumers can have checks done to a legal standard by reputable lawyers on any overseas development. I spoke to a UK investor yesterday who was buying property off plan in Mexico. Before IDIP it would have been very hard work for him to have any checks done on the development and the developer. This has real teeth and goes beyond relying on a asking questions or reading a guide which could all prove unreliable. It will have unscrupulous developers running scared and increase the confidence of the overseas property investor’
International Developer Information Packs (IDIPs) has been launched by insurer First Title; they are backed by a global network of law firms (Live Overseas). IDIPs cost from £600 plus VAT and disbursements – with lawyers providing an unbiased report on developers. More information re IDIPs here:
