What to Take Into Account When Purchasing a House with the Intention of Remodeling It

 theyucatantimes.com

 Tue, Jun 10th, 2014

Before deciding to purchase a house with the intention of remodeling, follow these tips:

1.    Do the Math. A remodeling project should not cost more than 30% of the property value. Otherwise, the property will increase its value and drive it off the market should you want to sell.

2.    Ensure that you can make the changes. Should the house be located in a historic area, do not forget to check the building restrictions set by the Instituto Nacional de Antropología e Historia, or INAH (National Institute of Anthropology and History), as the property by in large should be kept in its “as is” condition, and therefore the walls or windows should remain where they are located at the time of purchase.

3.    Do not embark on your initiative blindly. Get an appraisal in order to determine the remodeling cost.  It is also advisable to include an allocation of anywhere between 5 and 10% of the total remodeling cost for possible incidental expenses, such as: additional equipment, or a mishap, casualty or damage caused from drilling into walls.

4.    Ask for help. If the remodeling project involves building another room or tearing down a wall, we recommend you get advice from a building professional. At this point, it is important to have a Construction Services Contract,and there should also be added to that Contract documents that indicate:  (i) the project timetable; (ii) the budget signed by the professional hired; and (iii) the permits and authorizations issued by the municipal authority and, where applicable, the INAH.

What should I include in a contract for services?

• a) Purpose.
• b) Consideration. Terms under which the work will be paid.
• c) Period of performance.
• d) Events of force majeure and fortuitous event (effects of the weather, for example).
• e) Responsible for obtaining permits, licenses, authorizations and payments.
• f) Planning, projects and budget. It is recommended to attach them to the Building Contract.
• g) Extra and additional work. His way of approval. It is recommended to always be in writing.
• h) Punishment and conventional interests. The parties shall agree on the penalties they incur the “contractor” for delay in delivery of work, and interest shall cover the “owner” of the work by the lack of timely payment.
• i) Causes for termination and completion of work.
• j) Delivery to receive and hear notifications.
• k) Governing Law. Regularly the parties agree the law of the place where the work is performed.

By Alfonso Galindo