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The “To Build or Not to Build” series of construction in
Baja was begun because of my own experiences and desire to help people
avoid those problems that are avoidable. Well as you can see below this
series is being read and does apply to construction in Mexico in general.
You will see the question asked of our engineer friend Jorge Ayala are
being asked by someone from Puerto Vallarta.
Jorge:
We are enjoying the very helpful info on building in Mexico. I'm wondering
if you could advise us on how best to evaluate an existing commercial
building in Puerto Vallarta. Specifically, I'm curious to know if the
buyer of an older structure is libel for any inferior work and/or unpaid
workman's comp?
We understand that you are primarily concerned with working in exotic
Baja, however, since the only person I know in PV is the realtor
representing the property, it occurred to me you might give us some
initial "real world" direction.
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If you make any modifications to the building (in the case of a remodel)
then you are the one responsible from this point and on. Here I would
recommend that the Realtor solicits the existing owner for a copy of
a letter from IMSS saying that the building has no penaltiesm or liens
against it and that the owners complied with all of their obligations.
5) One very important issue is to have the building
recorded with the actual sale value, this case when and if you sell it in
the future you will not get hard with the Capital Gains Taxes, a lot of
people think is a cheap way to pay less taxes for the transaction, but
then they are stuck with the CGT at the end. I've seen this happen many
times here in the Eastcape area. And these taxes can be considerable; I
think they are about 28% to 35% your Public Notory (notorio publico)
should know for a fact.
In summary:
Ask for original or certified copies of the following
paper work, besides all of the other papers needed to process a purchase a
lot. These papers that I mention
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Jorge’s answers and suggestions follow:
Tricky, tricky questions. Let’s see if I can help you
here.
About evaluating an existing commercial building in Puerto
Vallarta, I have the following suggestions:
1) Have a Civil Engineer do a visual inspection of the
structure to see if it’s sound or needs any repairs, and to give you an
idea on how much would it cost if necessary, so you can use this as
leverage to negotiate a final price of sale. If the building is relatively
new. I would still recommend having a Professional (engineer) Certified in
the area, to give his opinion. Same for the electrical and all mechanical
installations.
2) The realtor is obligated to show you a letter from "Catastro"
(Town planning department) and from "Registro Publico de la Propiedad"
(Town recording department) where it should say "Libertad de Gravamen"
this letter means that there is no lean against the property, nor is the
property is in a court battle.
3) Ask the realtor to get a copy of the Construction
Permit or License of the entire Building that you intend to buy. This will
show you if the construction was done in a legal manner. There should have
been, an Engineer of Records, who signed off on the plans and inspected
the construction during its process. In this case he is responsible in
first order of the construction liability for quality of workmanship of
the structure. This is not so for the finishes nor for materials. For
inferior workmanship the contractor is the only one liable in a court
suit, unless his client ordered him to use an inferior material or ordered
him to do something of inferior quality.
4) About Workers compensation (Social Security ~ Instituto
Mexicano del Seguro Social) the original owner is the only one liable for
this evasion of responsibility. This is only if you DO NOT CHANGE ANYTHING
TO THE EXISTING BUILDING.
Click here to Visit their website
Or Call:
Baja
California Real Estate & Consulting
Cabo San Lucas • Las
Vegas, NV
(702)-953-8756 or
Cabo San Lucas
624-143-4327
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are hardly ever asked for until there is a problem.
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A visual inspection by a Certified Civil Engineer whom
can evaluate the structure and mechanical installations of the building.
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The letter of "Libertad de Gravamen". Have the notory
state this information in the fideicomiso or deed of the property. This
way it's locked in for any future possible trouble.
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Construction Permit of the entire building, plus the
Certificate of Occupancy (Oficio de terminacion de Obra) and the
Manifestation of the building recorded on the lot. Have the notory state
this information in the fideicomiso or deed of the property. This way
it's locked in for any future possible trouble.
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The letter from Mexican Institute for Social Security ~
IMSS stating the seller/owner/builder has compiled with this obligation.
Have the notory state this information in the fideicomiso or deed of the
property. This way it's locked in for any future possible trouble.
Jorge has once again pointed out some of the ways you can
be surer of what you are buying or dealing with as far as the government
and the liabilities of those involved. Please heed this advice as you may
avoid some major nightmares in the future.
I have heard some people say not to go to all the hassle.
Well I have been investing in properties for awhile in Mexico as well as
the state and almost always check the Building and Planning departments
and twice have avoided “buying a lawsuit” as I like to call it. Yes there
are laws to protect you but anywhere in the world the best protection is
to do your homework and not just rely on Real Estate agents or friends as
they will not be there when things go wrong.
I hope once again you find this information helpful and
appreciate any questions or comments you may have. Thank you Jorge and
happy building in Mexico to you all. To submit a question
or to contact Jorge Ayala for your construction project
click here.
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