Beware of pre- construction apartments

Pre-construction sales really are a case of buyer beware. That is not to say those offering pre-construction apartments for sale are all out to fleece you, but some unfortunately are, and they don't have crook stamped on their forehead. In fact, they can appear very credible. There is a particular partnership that has been causing havoc on the island for some years with their bad construction methods and dishonest ways. How do they get away with it? By not being Mexican, dissatisfied clients are advised by their lawyers not to take them to court, because it will result in spending a lot of money, and when it comes to the crunch they will just leave Mexico. It's sad that there are people like this on such a peaceful island, but there are, and we must guard against them.

Buying through the two reputable real estate agents on the island,  REMAX and Mundaca, is a safeguard as they know who the undesirable builder/developers are, and won't deal with them. If you are going to deal directly, there are certain steps you can take to protect yourself.

Firstly, ask to see the plans and building permissions and have them checked by an architect. Make sure the land on which the development is to be located is unincumbered; you would think that goes without saying, but it's surprising how often land is disputed, over ownership of debts. Have the contract to be signed, checked by a lawyer. If stage payments are required, ensure that money goes into an escrow account and is only released when an architect has certified that the various stages of your construction have been completed. If the builder is so under - funded that they can't even start the building process without your money, then it's time to question whether it is a project that will ever get completed.

Perhaps the most important stage is to ask to see three of their previous projects, and (this part is the important part) speak to three of their satisfied construction clients. This is where it will often all fall down, because they won't be able to introduce you to three satisfied clients.

It is important to take these precautions, because the risk is that these pre-construction sales can turn into Ponzi schemes, where everything depends on more money coming in. When it doesn't, the whole thing collapses.