Real Estate Law Peru
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 favour 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 couple 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 apartment that has not yet been built 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 and about five years of court time?
- 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 registers the purchase first has the right to claim it as theirs?
- Did you know that more often then not buyers are unknowingly made to pay for fees and taxes that the law says should be paid by the seller?
Due to the dramatic rise in property values, scam builders are currently buying properties claiming they are going to build office or apartment complexes and they advertise it as such. They go as far as getting bank endorsements which ends up providing the trusting buyer a false sense of security in that the project is guaranteed by the bank when in fact, the bank has little to no participation 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 will be ready for sale. The scammers are 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 apartments begin to sell between $120k to $200k for top floor flats. They sell as many as possible, sometimes all non-existent apartments are sold and other times when the selling begins to die down then they they make a deal with the other conned buyers under 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 they don’t.
The weeks turn to months and the project never begins. The weary buyers are now scared and ashamed that their worst fear could now be a reality. The seller has 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 ever 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 over night and through their illegal activities and this money will help them buy the justice they need to shelter themselves through the purchase of police, district attorneys, and ultimately judges, because in Peru, most of these are up for sale.
Please note that we believe that 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 gets processed in order to produce a legal opinion endorsed by a licensed attorney and a registered realtor who present it to the client. Lastly, have an experienced attorney work with you every step of the way to make sure that everything is where it is supposed to be.
Please contact us to arrange for a free consultation and to discuss your case.