While we at MONTEBLANCO & ASSOCIATES are in a position to provide you with assistance in Real Estate law in several countries of Latin America, we would like to focus your attention to the Peruvian market. We currently represent builders and buyers alike so our depth of knowledge and experience comes from practice with both parties.
It’s a well-known fact that in Peru, the law plays greatly in favor of construction companies that sell apartments they may not end up completing but do very little for the buyer who just lost their investment. In this section, we intend to provide you with factual information regarding the current situation of this booming economy that has construction projects all over the city of Lima, Arequipa, Trujillo, Cusco and other regions of the country as well, where market value has gone from a few hundred dollars per square meter several years ago, to a couple of thousand dollars in today’s price.
- Did you know that if you buy an unbuilt property and the construction company decides to pull out and not refund your money, there is very little you can do to get your money back?
- Did you know that if you are a victim of the above case scenario, you are looking at about $20,000 in legal fees and about five years of court proceedings?
- Did you know that if you are a victim of a scam of this nature, the con man who sold you the property can then turn around and sell the exact same property to someone else and only the one who registered the purchase first has the right to claim it as theirs?
- Did you know that buyers are unknowingly made to pay for fees and taxes that under the law should be paid by the seller?
Due to high demand, scam builders were buying land claiming plans to build office or apartment complexes in posh areas of Lima. They went as far as securing bank endorsements to convince the uncertain buyer that the project was guaranteed by the bank when in fact, the bank had little to no participation much less accountability in the process at all.
Here is how it works, the scammer buys a property for about $400k claiming that a ten-story building will be built with two apartments per floor thus making a total of twenty apartments that would be ready for sale. The scammers were a well-groomed formal company so as to raise no suspicion from the would-be buyers. The sale process begins with hard-to-resist introductory prices and the pristinely decorated life-sized model apartment was ready to gawk over and the apartments would begin to sell for around $350k for top floor flats. The scammers would sell as many as possible, sometimes all non-existent apartments were sold and other times when the selling began to die down, they would make a deal with the other conned buyers under telling a false tale that the sale of the apartment right next to theirs fell through and that they can offer that apartment at 50% discount hence the entire floor would be theirs, a price too good to turn down so the already conned buyer would be fooled twice.
As weeks turned in to months and the project never began, weary buyers were now scared and ashamed that their worst fear could now be a reality. The seller disappeared and since the seller was a legal entity the person (seller) has no legal obligations or accountability in this matter. You are the buyer that just lost every cent you owned, what do you do?? who do you turn to?? If you find yourself in this scenario then you pretty much already lost because precautionary measures were not taken in the first place. These are professional con men who under false identities or sometimes their own, become millionaires overnight and through their illegal activities, would use the money conned out of their victims to buy the justice they need to shelter themselves through the purchase of police officials, district attorneys, and ultimately courts because, in Peru, most of these entities are up for sale.
Peru is an amazing country where investing in real estate is a great option, the only agenda we are pushing is that you employ every possible means to secure your purchase by professionally having an exhaustive Due Diligence performed on the property itself, the seller and/or the construction company (when applicable), all of this then is processed in order to produce a legal opinion endorsed by a licensed attorney from our firm and a registered realtor who presents it to the client. Lastly, have experienced attorneys who can walk you every step of the way to implement safety measures to limit the possibility of being conned and securing your property.
Please contact us to arrange for a free consultation and to discuss your case.