Posted recently in the Guadalajara Report is a story (you may need to be a member to get in) about a local developer getting arrested recently.
Jalisco police have arrested a real estate developer accused of fraud and extortion by dozens of Mexicans and foreigners who purchased units in an advertised “pleasantly affordable” beachfront complex in Nuevo Vallarta.
According to news reports, Eduardo Valencia Castellanos, 39, was stopped in Guadalajara while driving his Porsche Cayenne on Avenida Patria, close to the Tres de Marzo soccer stadium. One report suggested he had left his house in the Universidad neighborhood to purchase croquettes to celebrate his pet dog’s first birthday.
No one who pre-purchased apartments in Valencia’s 275-unit Acqua Flamingos beachfront condominium complex ever received their properties at the promised time. The few who managed to take possession of their apartments found them to be unfinished and of a much lower standard than agreed in their contracts.
As with everywhere, there are projects and developers who are having trouble fulfilling their responsibilities to purchaser, Vallarta/Nayarit is no exception. However, its good to see when justice does prevail, or seems to be in this case. But, there is a different between having troubles fulfilling your obligations and another is committing fraud. The majority of the cases locally where there have been problems is more of a case of the developer running out of funds because of slow sales. If they developer is doing it with his own funds, this can be a problem. If a bank is involved, there is more recourse as they can supply additional funds to finish the project. David Connell, a local real estate attorney, has an excellent article with further information about this on his website. He’s also been involved in assisting owners who are involved with a developer that’s having problems finishing their project, to work out a solution that avoids litigation (where in most cases no one wins except the lawyers).