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This article was published in a Calgary newspaper but I think is pertinent to anyone purchasing property sight unseen.
Be Cautious of Real Estate Offers Outside Alberta
Tony Tighe, Global TV, CalgaryIf you’re interested in buying resort property we have a warning for you.
Alberta’s booming economy is attracting a lot of developers selling land in other provinces and countries.
But before you make a down payment on that waterfront lot, it pays to do your homework.
Terry Coles and his wife are looking for vacation property.
At the Home Show recently they stopped at a booth promoting land in Costa Rica.
OwnCostaRica.com claims to be developing property and building homes near the Osa peninsula.
So the couple attended a company seminar the next night.
“We were there for about two hours, watched a video, they talked about the property they had for sale you know, thousands of people had bought in, they asked for cash or visa or what-ever you had down”, says Coles.
Each lot costs $75,000 and the company wanted 10 per cent upfront or $7500.
The Coles put $500 down and decided to sleep on it before giving the rest of the money.
“We were kind of interested and then questioned it the next day, what are the legalities of it, like who these people were and what they were selling and if it was legal or not.”
They’re instincts were right.
Anyone selling land outside Alberta can invite you to come visit, but can’t set up shop and take deposits.
They have to file a prospectus and use a licensed real estate broker to make the sales.
OwnCostaRica.com hasn’t done any of that.
The Director of Industry Standards with the Real Estate Council of Alberta says they may advertise into Alberta as long as they’re not here physically trading.
Kirk Bacon says the law is there to protect people from misrepresentation.
Filing a prospectus ensures the development is for real.
“It’s a small way to assist potential buyers when they’re not travelling to other locations immediately to see what the property is, to get more detailed information about the property”, says Bacon.
If a prospectus isn’t filed, the contract isn’t legal and the money must be returned and if one is, you have 30 days to cancel.
The marketing manager of OwnCostaRica.com sent us a written statement after the story aired.
Brian Hughes says, “Our lawyers are in the process of writing a letter to authorities in Calgary explaining our marketing methods and apologizing for any wrong doing. We are revising out marketing seminars to act in behalf of Alberta’s laws.
Organizers of the Calgary Home Show say they were not told the company was recruiting people for a sales seminar or they would not have been allowed in.
If you want to know more about the rules for out-of-province and foreign land sales call RECA at 1-888-425-2754 or log onto their web site at http://www.reca.ca
If you want to see if a development is legitimate in another country you can contact the Federal Department of Foreign Affairs and International Trade or do a license search with the Association of Real Estate License Law Officials at http://www.arello.org
Hope this information is of help.
This is a great article Shelley and one to be heeded by anyone thinking of a move to Costa Rica. I actually had a huge argument with these same people at the Toronto Home Show; they were promising an international airport that they said was already built among other things! My husband eventually dragged me away as I was creating a bit of a disturbance because there was more of a crowd listening to what I had to say. In hindsight it must have seemed like a funny spectacle to the onlookers. Oh well…..
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