I Keep Paying, Yet It’s Not Even Built

For many foreigners, the time is right to invest in real estate in Brazil. The exchange rate is favorable, and properties that were once prohibitively expensive are now within budget. But just because something is affordable doesn’t mean you should carelessly throw money at it.

A growing trend is for Americans to buy “soon to be built” condos that take much longer to build than expected. The problem is not the delay. Things happen, including a pandemic that has thrown Brazil into complete chaos. Rather, the complaint is about the requirement to make payments on something that should’ve been finished months or even years earlier.

Quick to sign a purchase agreement, buyers aren’t thinking about potential problems later on. Most agreements include a payment schedule; some even have a tentative construction schedule. However, the payment schedule isn’t always tied to the construction schedule. So even if the developer is a year behind, you’re stuck making your yearly, quarterly, or monthly payments.

Nowadays, it’s not unusual to find construction projects that are two or more years behind schedule. But in most cases, you’ll find no penalty for the developer if they’re late.

While nobody wants to pay for something that isn’t finished, your contract will ultimately dictate the payment terms. When you put up the money, make sure you’ve conditioned it on realistic and specific goals. Maybe progress payments will be a better condition for payment. The developer will make sure that he’s protected. Now it’s your job to make sure that you’re protected too.