Boleta de Reserva and BPS Certificate

[RamaCaida]

We have just finished signing the Boleta de Reserva for the purchase of a house in Parque Rodo. The house has been completely renovated by the current owner. We have one question regarding the BPS Certificate. Is it required by law that the seller provide this certificate prior to the transfer of title? That was our initial understanding of the legal process.

The escribana included a clause in our boleta that says that if the seller does not provide the BPS Certificate by the closing date, we will receive a credit of $11,500 U.S. We find this unusual, and we don't want to be responsible for the seller's debt, or for the problems of trying to secure a certificate ourselves.

How can we protect our interests in this transaction?

Thanks, in advance, for your help.

[loei]

We have just finished signing the Boleta de Reserva for the purchase of a house in Parque Rodo. The house has been completely renovated by the current owner. We have one question regarding the BPS Certificate. Is it required by law that the seller provide this certificate prior to the transfer of title? That was our initial understanding of the legal process.

That is my understanding of the law.

The escribana included a clause in our boleta that says that if the seller does not provide the BPS Certificate by the closing date, we will receive a credit of $11,500 U.S. We find this unusual, and we don't want to be responsible for the seller's debt, or for the problems of trying to secure a certificate ourselves.

How can we protect our interests in this transaction?

Thanks, in advance, for your help.

The BPS liability on the building works is tied to the house where the work was done so if the seller doesn't pay the BPS, the BPS may well come after you as the new owners. Whether 11.5k U$S is enough to cover the BPS liability depends on how much and what works were done.

Patrick.

[eddiecohen]

My guess is that someone already knows that the BPS due is much more than the US $11,500......

Eddie

......The BPS liability on the building works is tied to the house where the work was done so if the seller doesn't pay the BPS, the BPS may well come after you as the new owners. Whether 11.5k U$S is enough to cover the BPS liability depends on how much and what works were done.

Patrick.

[Sara]

BPS's overdue fines are something fierce, and may be much higher than what the sellers offer. BPS taxes can double construction costs, so many people do bootleg renovations.

Hold out for a BPS certificate clearly specifying that no back taxes are due.

Sara

[RamaCaida]

Thanks for the advice. We will have to insist that the Certificate is in place before completing the transaction. We wonder who the escribana is actually working for???

[Sara]

We wonder who the escribana is actually working for???

Probably for herself - wants to get the deal through and collect her fee. I would not fully trust any certificate she produced; better go to the BPS with the address of your house and have THEM give you assurance that all taxes have been paid.

[eddiecohen]

....We will have to insist that the Certificate is in place before completing the transaction.

It sounds like it's too late for that......

We have just finished signing the Boleta de Reserva for the purchase of a house

[Sara]

I may be wrong (yes, it's been known to happen! ) but from what I remember a boleto de reserva is a declaration of intent, with a small good-faith deposit. Nothing is final until the escribana certifies that the tile is clear and the transfer papers are signed.

As I said before, a visit to the local BPS office would help. Many remodels are carried out without informing the BPS - the liability is then transferred to the new owner, who must pay taxes and fines before selling the house.

Please, let us know what happens!

Sara

[HeyItsMe]

As I said before, a visit to the local BPS office would help. Many remodels are carried out without informing the BPS - the liability is then transferred to the new owner, who must pay taxes and fines before selling the house.
Sara

I'm very skeptical BPS would know that your kitchen or bathroom has been remodeled. How would they know that???
Maybe most people don't declare remodels and BPS never knows!

[Sara]

I'm very skeptical BPS would know that your kitchen or bathroom has been remodeled. How would they know that???
Maybe most people don't declare remodels and BPS never knows!

That's exactly my point: many people don't declare additions or remodeling jobs, so it is worth checking with the BPS to see exactly what has been declared and legalized. Then, compare it to the house as it is now. Any changes should be brought up to date before going through with the operation.

Sara