As a result of the first problems arising from the sinkholes in the Valparaíso Region, the first purchasers of real estate have begun to pay more attention to real estate purchase and sale contracts and preparatory contracts.
When we refer to the legal actions that a real estate consumer may exercise, the first thing that comes to mind is the existence of faults or defects in the construction of a house or apartment.
However, Article 2 letter e) of Law No. 19,496 on Consumer Rights Protection (LPDC) precisely regulates that those matters related to “the quality standards contained in Law No. 19,472” are excluded from the scope of the first legal body. This is due to the fact that Articles 18 and 19 of Law No. 19,472 of the General Law on Urbanism and Construction (LGUC) contain a liability regime and special actions that allow the first affected purchaser to file the necessary civil indemnification actions.
But let’s not fool ourselves, the LPDC does apply in cases of purchase and sale of homes, but for all other matters that are not related to the quality of these. We speak then of: abusive clauses, security, after-sales services, information duties, integration of advertising, contractual compliance, among others. In this way, it is possible to maintain that the LPDC in matters of sale and purchase of dwellings constitutes the general rule, and the LGUC merely corresponds to an exception for those cases of quality standards.
Furthermore, this matter has even been the object of the interpretative power of Sernac, an authority which, on June 6 last, approved the Interpretative Opinion on the statute of limitations referred to in article 18 of the General Law of Urbanism and Constructions. This is a formal administrative act that, although its main issue is not the application of the LPDC over the LGUC, it does make mention of it.
In practice, and as a result of the first problems that arose with the sinkholes in the Valparaíso Region, the first purchasers of real estate have begun to pay greater attention to real estate purchase and sale contracts and the preparatory contracts for these. A key element here is the potential abusiveness in the content of the clauses.
Supported by the constant flow of information flowing through social networks or mass media, real estate consumers are now also paying much more attention to the clauses commonly contained in these types of contracts and, likewise, demanding their rights in an increasingly clearer and more informed manner.
As a result, real estate companies should not only be properly advised in the preparation of their contracts by professionals specialized in real estate matters, but also resort to experts who ensure a review of the contracts from the perspective of consumer protection.
Finally, considering the complex scenario for real estate and construction companies, it is key to have this comprehensive approach in order to reduce legal contingencies and ensure the viability of the projects.
The lack of attention to this point could even imply the annulment of a series of clauses that, as a general rule, are an integral part of several contracts, so the risk in no case is minor.
Source: Industria Legal Magazine, Issue 20. See here
For more information on these topics, please contact our Public Law and Regulated Markets group:
Antonio Rubilar | Partner | arubilar@az.cl
Gonzalo Bravo | Senior Associate | gbravo@az.cl
