New rules have gone into effect that require real estate developers to register and receive approval of their financial status before selling to the public. The real estate firms are being covered by a rule that also applies to concert promoters and producers of other public events who receive money beforehand.
Both types of firms are supposed to register with the Comisión Nacional de Consumidor by next March 23.
The requirement is part of a reform of the country’s consumer protection law. The summary of the changes came from the Ministerio de Economía Industria y Comercio Wednesday.
Another change spells out more clearly the rights of consumers who have purchased a defective product that is under guarantee. There also is a paragraph that allows unannounced searches if a business is suspected of anti-competitive actions like price fixing.
During the property boom which ended in a downturn in 2008, a number of firms sold condos, building lots and other forms of residential real estate before the properties were built. Some of the projects were simply scams. Others suffered financial setbacks because of the deteriorating market conditions. Many customers lost money.
The new regulations say that those who engage in sales for future completion must demonstrate their economic solvency or provide some form of guarantee if the firm does not have funds to complete the project. Elsewhere developers would purchase a project completion bond from an insurance provider.
Some concert customers also have lost money when the planned show was canceled and not all of the funds were returned.
The decree, which was published Aug. 23, update the product guarantee provisions of Law 7472 by mandating time deadlines. The rules basically are directed at the purchase of major appliances or perhaps vehicles.
Repair of such new but defective items has to be done within 15 days. If more time is needed, the vendor has to give the consumer the right of exchange. The ministry said that some firms abuse the consumer by causing them to endure more than one repair visit on new items. The ruling also says that a guarantee cannot be fulfilled if repairing the item results in a reduction of quality.
The original law contained a lot of information about guarantees, but did not address these points.
The surprise inspections can be done by the Comisión para Promover la Competencia when doing so is the only way to obtain information about anti-competitive practices.
The decree also requires that the ministry is informed if a merger is planned between two major firms and the result would convert a competitive market into a monopoly.
The time limits on guarantees would eliminate problems that some expats have with multiple service calls on major appliances purchased new. One couple reported this week that they have had four unsuccessful service calls on a new refrigerator that would not work when they brought it home. They have been without a refrigerator now for 10 weeks while an exchange is negotiated, they said.