Querétaro, Qro. The high demand for real estate rental has increased the request for legal policies, a practice that lacks regulation and therefore has led to a new form of fraud.
The president of the State Council of Real Estate Professionals of the state (Cepiq), Arturo Hernández Serrano, explained that with the effects of the pandemic this problem increased, since the need to change or rent a home increased and with it the requests for policies, as a measure to replace the lack of guarantees.
Only a tiny proportion of those who rent, he explained, have a property that can serve as a guarantee of income; Faced with this absence of guarantees, the policy has gained a greater reference in the real estate market.
“Lawyers have invented a service, because it was an invention, which today is called a legal policy that is like car insurance, a tenant arrives who does not have someone to guarantee it, does not have a property to offer as collateral and then you are going to pay insurance, that insurance represents that if the tenant does something improper or does not pay the rent, he will have already paid in advance to a law firm that is going to proceed against him, he is going to sue him, garnish him and he is going to remove from the property, “he said.
However, the council has identified that when this scheme emerged as a created practice, there is no system that regulates it, lending itself to fraud since people without legal or real estate experience process this type of policies.
“Although we have a Civil Code that tries to make regulations regarding leasing, there are no regulations or there are no codes that tell us what regulations must be followed and where we can complain if something does not go well,” he explained.
Through the council, complaints have been received about the incidence of scams and abuses that arise from using the so-called legal policies, without there being a control or regulation on their implementation.
“As it was a service created, it has been a product that, due to the need of people with fewer resources, has had a very high demand in the state, abuses, scams, for landlords, tenants, owners, tenants and has been an element of scam for advisers. We already have too many complaints in the state, “he said.
Just as years ago, he explained, in the state there was a finding of real estate fraud due to identity theft, now this modality is presented through the legal policies for real estate rental.
If it is estimated that 20,000 commercialized homes are placed in the state per year, the rental operations can be two or three times more. He estimated that of the legal policies in the real estate market, 50% are policy operations with some type of irregularity.
Project
The council is developing a project to influence the formalization of this procedure and reduce the possibility of fraud. The president of Cepiq explained that although as a private body it does not have a regulatory power, they will seek to create a regulation and code of ethics that accounts for the formal conditions in which a policy of this type should be established.
For this reason, he urged the nearly 50 firms that issue legal policies in the state to approach the council and approve criteria, in order to generate a white list of companies that provide policies based on formalization standards.
In a second stage, a rapprochement will be sought with local legislators, in order to move towards greater regulation of real estate activity.
The vice president of Cepiq –and head of the initiative to create a regulation– Mara Morales, explained that through the white list it is intended to recognize professional practices, aligned with the law, in order to improve the level of real estate service provision .
Reference-www.eleconomista.com.mx