BUYING REAL ESTATE OFF-PLAN IN ECUADOR (2017)
We recommend that the person interested in purchasing a property in a project that is still under construction follow these general rules:
1.- If the Construction Company is complying with all its obligations with the “Superintentencia de Compañías” (Ecuadorian organization that is in charge of the Companies’ regulations);
2.- Visit other already finished projects executed by the Company and get testimonials from previous clients;
3.- Visit the piece of land where the building will be located;
4.- Visit the construction project periodically to verify the advancements;
There is an organization where you can go, if you feel your consumer rights are being violated.
The process of purchasing a new real estate project has three well defined phases:
First, Payment of the real state property reservation;
Second, signing of the promissory deed contract;
Third, signing of the Closing contract deed. This is done once the property is ready to be delivered to the buyer.
PAYMENT OF THE REAL ESTATE PROPERTY RESERVATION
This is the first step. When you have decided in which project and property you will invest your money, the project’s promoter (Construction Company) will ask you to make a reservation payment. This reservation will correspond to a percentage of the total value of the property, even though this is not established by law, the amount is usually less than 10% of the price of the property. Once this payment is made, the unit will be put out of the market and it will be registered under your name in the record books of the project’s promoter.
The promissory buyer must demand the Project’s promoter or the trust Company handling it, to deliver a receipt that shows:
1.- Date and place of the payment;
2.- Amount delivered;
3.- The exact location of the reserved property;
4.- Total price of the property:
5.- The balance remaining;
6.- The agreed form of payment; and
7.- Name and signature of the person receiving the money.
If by any reason you decide you don’t want to buy the property anymore you can get back the partial or total amount of the money, depending on the date you notify of the withdrawal. If it happens in the same week you made the payment, is probable you can recover your money back, but if more time has passed and the seller incurred in administrative or legal expenses, these may be deducted and you get back the rest.
In case you still want to buy the property, the next step would be to sign the property’s promise of purchase contract deed.
PROMISSORY DEED CONTRACT
Legally, there is not a fixed amount of time between the reservation payment and the signing of the promissory deed contract; what is advisable is to sign it in the next seven days after the delivering all the documentation.