Before You Buy
Full Disclosure: It’s different in Mexico
Amapas is a great place to live and own property – its great weather, access to the beach and bay, friendly people and easy-living lifestyle are seductive. And visitors interested in finding a piece of Paradise to call their own often assume that real estate investment rules, practices and consumer protections – things like escrows, disclosures, developer obligations, even utility hook-ups – are the same here as in their home county.
But that’s not always the case.
Just A Few of the Things You Should Know
By law, contracts are in Spanish. If your translation is incorrect, you lose.
Escrituras (deeds) for new properties (mostly condos) can be years in coming, due complicated procedures dictated by State laws, as well as the particulars of a given building and the developer’s own speed and attention to details.
Developers can receive licenses to build without having access to utilities. In recent years, some new buildings have been sold – and occupied – without an actual City water hook-up, without a working sewer connection, or without enough phone lines for the new owners.
Buyer Beware: “Pre-Construction” Benefits & Pitfalls
Developers often offer attractive ‘pre-construction’ discounts of as much as 10, 20 or even 30 percent. But buying in ‘on the ground floor’ comes with risks:
- Your money is not being held safely in escrow pending the building’s completion; it’s being used by the developer to finish the project.
- If there are cost over-runs, financing problems, or not enough other pre-sales, corners may be cut, or the project may stall – sometimes for years. This was recently the case with the “Amapas 1” project, as well as others during the recession years.
- Until you receive an escritura – a deed – you may ‘own’ the property in the sense that you’ve paid for it…but, without an escritura, you’ll be paying things like HOA fees and the developer may be paying your property taxes in your behalf (or not), but your ability to sell ‘your property’ may be complicated because you don’t yet have an actual deed.
- Developers are sometimes able to receive construction licenses that are “unlawful” in the sense that they exceed the size, height or density allowed by local zoning laws.
- When this happens, a lawsuit may be filed by PRODEUR (an office of the Jalisco State Attorney General charged with oversight of municipal affairs). This can lead to suspension of construction and, ultimately, a judicial order to have the building demolished.
- If you invest in a building that is under this kind of legal cloud, the consequences can be quite real, and the legal proceedings can drag on for years.That doesn’t mean “Don’t buy” – far from it! There are plenty of satisfied owners in new buildings who have their running water, their sewer connection, their phone & internet, their escritura – and without a problem.What it does mean, is Don’t ASSUME; always ASK.