New regulation benefits buyers, but affects builders

The new regulation for the functioning of real estate companies will benefit buyers, according to Guillermo Salcedo, Manager of Salcedo International. However, he added that the cost of the works will be higher, so they “will need a real capital to carry out a project”. As a result, it is possible that small builders can not execute their work.

Salcedo also suggests authorities to find ways to lower the time to approve the environmental impact study, which takes about 10 months and without this document, the municipality does not deliver the building permit and without this last paper is forbidden to receive money from the buyers for the execution of the work.

Jaime Rumbea, director of the Association of real estate developers in Ecuador, said that a  process of socialization and training to companies by the Superintendency is necessary, the clarification of its opacities and, above all, a control and real and effective sanctions to informality.

Formal developers are paralyzed in their new projects by reviewing its processes, understanding the regulation, reforming internal regulations, evaluating offers from managers of funds and trusts, addressing concerns from customers.

The regulation indicates that resources coming from promises of sale from the purchase of real estate units shall constitute a trust Commission, for management.

Finally, Rumbea stated that the hiring of fiduciary assignments will cost, the search for new sources of financing that replace resources of customers and the time that this new procedure means also will cost, by which he mentions that the regulation is bringing costs to the sector and the country.