TalkBaja.com » Baja Mexico Forums » Building your Baja dream home

I know I have read strings concerning this years ago but want to ask afresh.

If I understand correctly, when construction is complete on a house, there needs to be a a work stop completed with social security that says the workers were properly covered. And this is an important step.

If a contracter spends years making excuses for why this has not yet been completed, it makes one imagine that it is because social security was not properly covered. Contractor tells homeowner not to worry because the entities will come after contractor, not homeowner.

I recall reading somewhere years ago that ultimately the responsibility comes down to the homeowner.

If so, can you tell me how to calculate what sort of fees and penalties and all will be assessed? And if the contractor is out of the picture, how would the homeowner proceed to right the wrong?

Thanks

Sooo....what are you saying? He didn't do it? If not....how do you know?
You don't want to open a can of worms so be careful who you discuss this with.

Ultimatly, you are responsible for the contractor paying his employees SS. If you find out he didn't, you should get an attorney and start protecting yourself. You don't want to be a defendant before you know what's going on. They'll have you over a barrel big time.

This sounds like a patient on the shrink's couch who says "I have this friend who is kinky"...

(Just a silly joke, Queso.) Carry on and good luck.

There may be regional differences, but in La Paz, the "terminación de obra" (notice of project completion) is filed by the contractor with the Municipio, which in turn inspects the property, ensures that things are in line with the building permit, then issues the "manifestación de construcción" (showing the extent and value of the construction) and occupancy permit. My understanding is that the seguro social agency uses these documents to estimate how much SS should have been paid, based on the value and/or extent of the construction and how much work they believe it entailed. If something seems off, they look into it, and yes, normally they start with the property owner. They don't have to wait until construction is complete, either. During my project, the SS folks came by with a "summons" for me to appear with evidence that the appropriate payments were being made. The contractor jefe went in my place and somehow straightened things out. How do I know? That was in 2007, and the SS folks haven't been back. But from what I'm told, there's no statute of limitations on the SS payments.

In your case, it's hard to tell what's going on. It could be simply a matter of time, or it could be that your contractor never filed any paperwork with the municipal authorities. Did you ever see a building permit, manifestación, or occupancy permit? If you have all that paperwork (which in my case took about a year), then SS no doubt has it, too, or has access to it. By "out of the picture" do you mean that you're no longer in touch with the contractor daily, or that he has skipped town? Did your contract indicate that the he is responsible for the SS? Your next steps probably depend on where you stand with all that. Ditto for any fees or penalties.

Kate, thank you for the very helpful information. We are in good shape with permits and manifestation and I KNOW that ss for the workers was being paid. It is just the Terminación de Obra that has been held up and without a good explanation as to why I want to be more prepared for what financially may happen to me should the TdO not come through for whatever reason. The contractor has not disappeared, but people do go away. I do not sleep well with uncompleted paperwork and no plan for worst case scenario.
You gave me a much better idea of what I need to know.
Thanks again.

Bueno Queso, I concur with Kate's information. I also think you may still have some more answers you need to get before get a really good night's sleep! IMO, you could have cause to be concerned if your builder/contractor did not terminate the Seguro Social at the end of construction; if he didn't, the clock (& fees) could very well still be ticking & you could be in for a very ugly & expensive visit from SS. For your own peace of mind, a visit to your local SS office will net you the answers you need.

The builder of my first casa didn't pay any SS on the workers, despite the fact he charged me for it. What saved my bacon is that I went into SS prior to selling that casa 5 years after construction to verify SS had been paid & the sale would be legal & that I wouldn't be unknowingly passing legal problems onto the buyer. My contract with the Architect/builder clearly stated he charged me for SS & HE was liable for paying SS. Seguro Social gave me a letter stating I wasn't liable, which allowed me to proceed with the sale & they went after the Architect. I lucked out because that clause was clearly defined in our contract.

Another smart thing to verify is whether your builder manifested your construction for the full value of your construction. The above mentioned Architect/builder manifested my completed construction for $15,000 PESOS!! At point of sale, I had 2 options....(1) Pay in excess of $90,000 equiv USD in capital gains taxes....or (2) Pay approximately $6,000 equiv USD to have it professionally revalued & re-manifested. Obviously, I opted for door #2!

It's possible that the Termination de Obra for your construction is sitting in a big pile for the Ayuntamiento inspectors to do a site visit to verify square meters of construction & classification of construction. There are two classifications, the default is always to a square meter chart based on local standards of rustico construction. There is also a higher value "Tourista" classification that's typically more accurate for typical "gringo" construction design, materials & standards. The fees are definitely higher, but the classification is usually most accurate & can protect you from paying approx 30% in inflated capital gains taxes at any future point of sale. For me, paying 3-5% more now versus 30% later was a no-brainer!

Depending on your location & how the local officials interpret & enforce the laws/codes/rules, your mileage may vary. I think you're right in pursuing your outstanding issues & concerns now rather than getting hit with costly surprises at some future date when the information & details aren't as fresh in your mind.

Thank you longlegsinlapaz for the valuable information, true life experiences and good ideas.