By: Jorge Velazco
In order to protect real estate investors and legally protect the assets of those who participate in them, the signing of the Alliance to Generate Certainty in the Real Estate Sector took place this Friday between the Treestate Certifier and one of the largest global insurers, Berkley Mexico. The Mexican Chamber of the Construction Industry (CMIC) of Jalisco, has joined the agreement as an honorary witness.
In this way, both companies will launch the first guarantee policy of its kind, aimed specifically at providing legal, technical and financial certainty, as well as a guarantee of advances in pre-sale, to those who participate with resources in this business segment.
It is estimated that billions of pesos are lost each year in Mexico due to fraud and unfinished, unregistered or very poor quality projects. Unfortunately, the fact that the sector lacks regulations makes it a favorable environment for scammers or inexperienced developers, agreed the CEO of Treestate, Diego Espinosa de los Monteros; the president of the board of directors of Berkley, Guillermo Espinosa Barragán; and the president of CMIC Jalisco, Juan Manuel Chávez Ochoa, who led the event.
“We have designed a bond policy together that does not exist in the market. The main issue that gave rise to this policy is the great growth of fraud in the real estate sector that has occurred in recent years. We can talk about schemes disguised as real estate investments, where they deceive and offer the investor, the final consumer, returns of 3 to 4% per month – which is a situation that no real estate project will give them; and through this attraction, where they invent that they will have a very high return, that is when they fall due to lack of knowledge and experience; people who contribute their land to developers who do not know how they will fare. And it is in these situations that we want to offer prevention and guarantee tools,” said Espinosa de los Monteros.
With Treestate’s certification methodology and the support of the policy issued by Berkley, exclusively for projects in the process of real estate trust certification with ESG factors, investors and end buyers will have solid support to choose what to buy and with whom to do so, he reported.
For his part, the president of CMIC Jalisco indicated: “Our participation in this virtuous circle is intended to generate certainty, security and transparency for all those involved; that is, developers, investors, users, and, on the part of suppliers, which is where CMIC has a very special interest in how the hiring of project executors and members of this chamber are taking place, who, as builders, also put their capital at stake. For this reason, we will continue to promote this type of tools, to strengthen this circle of real estate trust.”
Treestate is a certifying body endorsed by the Mexican Accreditation Entity (EMA) and the International Accreditation Forum (IAF). It helps to identify and mitigate risks in a real estate project or development, evaluating and diagnosing the project in five stages, ranging from Corporate Due Diligence to project viability, planning, execution of work and satisfaction evaluation. The evaluation and diagnosis is carried out by a team of recognized professionals in the field.
Meanwhile, Berkley is one of the largest commercial property and casualty lines insurers in the United States and the world. The Company has a market capitalization of nearly $9 billion and distributes more than $4.2 billion in cash to its shareholders. Today it has 54 operating units on five continents.
In August of last year, CMIC Jalisco and Treestate signed a first agreement to ensure good real estate practices among builders affiliated with the Chamber, in a joint effort to prevent additional costs, delays, or economic losses for both developers and investors.
The agreement also helps to prevent fraud, as it works to create a “community of trust” where both the projects and the supplier segment have obtained certifications from Treestate, proving that they comply with a rigorous parameter of indicators.
CMIC Jalisco has 400 members, and among its members are some 50 companies dedicated specifically to real estate development.