Chile Forum

There has been a lot of discussion going on recently in the Chilean media about the scandal surrounding "off plan" or what is called "Green" (verde) apartments or construction. Regardless of what you call it, essentially it is buying any portion of a large development project from a company in Chile that has not been built yet. You just get to see some concept drawings, perhaps a model, and a set of plans. They offer deep discounts to early buyers, compared to what an apartment might in theory sell for already built. This is not to be confused with contracting a company to build a custom home. We are talking about planned community type track homes and apartment buildings here.

What got the ball rolling was an investigative report conducted by TVN that caught the largest companies in Chile cutting corners or not finishing buildings at all, along with many many other problems. Here is a thread related to that report, with links to watch it online: topic1786.html

We also have had an unusual increase this year in foreigners contacting us that want to buy these "green" buildings, because well they seem like such a good deal. Like many things that are too good to be true, these ones really are too good to be true.

We spent a good deal of time looking in to these offers recently from a legal standpoint, and discussing it amongst our experts in both law and construction. Here is what we have concluded:

There is almost ZERO legal protection for anyone that buys one of these "green" properties in Chile!


The legal protection is so lacking for buyers of these types of real estate that we have decided that our firm Spencer Global will not and can not ethically represent or assist anyone entering in to any sort of contracts for "green" or "off plan" construction in Chile. We strongly believe we can not protect our clients should they decide to sign one of these contracts, and there are problems later.

Just a few of the construction problems that have been found recently:

1. Completion dates on buildings that run years past schedule

2. the examples look nothing like the finished product in terms of size and features

3. building infrastructure that is inadequate (insufficient parking, overbuilding, and so on).

4. Low quality construction materials including concrete that does not meet basic compression test, pipes that leak, doors that do not close, and much more.

5. Companies are obligated by law and by their warranty to fix things, but how they fix them is very subjective.


You are simply at the mercy of the good will of the company you sign with, and considering the rampant problems with such construction your odds are not good.

Just a few of the many many things to consider on the legal front:

1. The contract you sign for the property is not a real estate buy / sales contract. The property does not exist yet. There is no title. It is just a regular old buisness contract. You will most likely get the title and all that when it is done, just you are stepping outside many of the protections built in to the normal real estate purchase process in Chile.

2. To get the discounted deals you are forced to sign their contract, drafted by their lawyers. There are no options for your attorney to negotiate, review, or draft the contract.

3. Almost always, even the best known names in construction in Chile form shell companies for each new project. If by some stroke of luck you could take legal action based on the contract you signed, it would most likely be against a very well financed and defended shell company not the big name company (one of the biggest builders in Chile) where the money is at.

4. There are no punitive type damages in Chile. You get your real damages, but please see point 1 and 2 above. You could spend years and millions of pesos on legal fees, and get nothing back in the end. They have lots and lots of lawyers, that do nothing but this type of legal work.

This is very serious buyer beware territory in Chile. Chileans are being ripped off left and right across the country. For a foreigner looking to retire in Chile or live, we would say this is the last part of the real estate market you want to venture in to when considering what real estate to purchase in Chile.

Wait until it is built, titled, and have it independently inspected before purchase.