Forums > Specific Focus > Home, Garden & Construction in Mexico

jl1

Aug 29, 2009, 11:54 AM

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SEGURIDAD SOCIAL FINAL SIGNOFF

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Hi--Our house in Sayulita is finally almost finished. We fired the architect earlier this year for various reasons and turned management of the project to our Atty/Acct. office in P.V. They have been paying all vendors and writing contracts, etc. It is now time to start preparing for the final sign off by S.S. and this is reason for my post. Our accountant informs us that in addition to considerable missed S.S. payments, the architect misrepresented the square footage to S.S. in the first place. We have a contract with the architect in which he accepts responsibility for these payments. We are now preparing to negotiate--through our Atty.--with S.S. to get the house signed off. Our accountant informs us that in cases where there are missed payments or other problems, S.S. sends people to the house to do their own measurement. Has anyone out there had a similar problem? I'm hearing from some people that most houses don't even get a final sign off. This makes us nervous, as this is not a spec house and we hope that future generations of our family will live in it. Please feel free to reply to me privately. Any input or sharing of experiences would be greatly appreciated. Thanks......JL

Rolly / Moderator

Aug 29, 2009, 12:19 PM

Post #2 of 16 (10330 views)

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Re: [jl1] SEGURIDAD SOCIAL FINAL SIGNOFF

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1. No matter what arrangements you have with the architect, IMSS will hold you responsible for all the payments + interest and penalties for missed payments. The sooner you can get this resolved, the less it will cost.

2. IMSS always sends someone to measure the size of the completed house. Then they calculate how much money the project should have brought in to IMSS using their formula for new residential construction. If you have paid that much, fine; if not, you will have to make up the difference. Been there, done that.

They are tenacious and unforgiving! I hate them.

Rolly Pirate

(This post was edited by Rolly on Aug 29, 2009, 12:21 PM)

Rolly / Moderator

Aug 29, 2009, 12:40 PM

Post #3 of 16 (10322 views)

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Re: [Rolly] SEGURIDAD SOCIAL FINAL SIGNOFF

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I should add that you may find some useful information on my website at http://rollybrook.com/finding_buildin.htm

Rolly Pirate

Judy in Ags

Aug 29, 2009, 7:51 PM

Post #4 of 16 (10268 views)

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Re: [jl1] SEGURIDAD SOCIAL FINAL SIGNOFF

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Rolly's right on, as usual. We did have the final inspection, measuring, etc. and a charge. The inspector was a friend of the man who handles our social security payments for us and he did give us a little break. But, buck up--it could be steep.

jl1

Aug 31, 2009, 10:25 AM

Post #5 of 16 (10220 views)

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Re: [Judy in Ags] SEGURIDAD SOCIAL FINAL SIGNOFF

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Thanks Rolly and Judy-We've already been told by our accountant that they are tough to deal with. The architect started missing payments in February. Almost all were paid during the prevous 2 years. The house was expanded from the original due to mutual agreement between us and the architect that some rooms should have been larger than originally planned. We will pay whatever is due, then have our attorney go after the architect. The bottom line is that the value of the house is considerably greater than what it will cost us to close it out. This has been an arduous experience, to say the least. The sad part is that our architect had a reputation for integrity and dependability, which is why we chose him. We met 5 or 6 people that he had built for over the past 20 years and they all love him. Unfortunately, like many business people, he relies on new projects to help finance the completion of ongoing ones. All of his new projects were cancelled as a result of the financial crisis beginning NOB, and he began acting out of desperation. His reputation is now ruined in our area and we will wind up in court over this. I'm getting tired of living and learning. Time to just start living.

jl1

Aug 31, 2009, 6:10 PM

Post #6 of 16 (10195 views)

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Re: [Rolly] SEGURIDAD SOCIAL FINAL SIGNOFF

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Hi Rolly--I read your article and thank you, it was very informative. One thing that wasn't covered was exactly what measurement SS is interested in. I've heard conflicting opinions. Do they measure all areas under a roof? What about courtyards, bodegas, equipment rooms, etc.? Do they make a distinction between "living" areas and utility/outdoor areas with tiled floors? Thanks....JL

Rolly / Moderator

Aug 31, 2009, 6:18 PM

Post #7 of 16 (10192 views)

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Re: [jl1] SEGURIDAD SOCIAL FINAL SIGNOFF

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They measure everything that has a roof -- not just wall to wall, but the total area under the roof including overhangs and uncovered stairways. Other open air spaces (patios, etc) and property walls are not included.

Rolly Pirate

RickS

Aug 31, 2009, 8:07 PM

Post #8 of 16 (10182 views)

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Re: [Rolly] SEGURIDAD SOCIAL FINAL SIGNOFF

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Which is the way square 'footage' is determined for real estate listings also.... contrary to the way it is done in the U.S. (Canada too?) which is the square footage of interior wall-to-wall and excludes porches and garages etc.

This is something that 'fools' some folks when they come down and look at a residence to purchase and see, say, 2400 Sq. Ft. (or the metric equivalent) and relate to that like they would 'back home'. The 2400' Mexican house is smaller than the 2400' US home in other words.

jl1

Sep 1, 2009, 9:50 AM

Post #9 of 16 (10157 views)

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Re: [Rolly] SEGURIDAD SOCIAL FINAL SIGNOFF

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This is what I've been hearing. Does anyone know if there is a standard sq. mt. price for new construction? Or does it vary from area to area?

Manuel Dexterity

Sep 1, 2009, 11:27 AM

Post #10 of 16 (10144 views)

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Re: [Rolly] SEGURIDAD SOCIAL FINAL SIGNOFF

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In Reply To

2. IMSS always sends someone to measure the size of the completed house. Then they calculate how much money the project should have brought in to IMSS using their formula for new residential construction. If you have paid that much, fine; if not, you will have to make up the difference. Been there, done that.

I'll catch flack here for contradicting the board icon but actually they rarely send people to measure. Normally they will if there is an obvious problem or discrepancy concerning the total area of the house. Such as you have a permit for 200m2 and you obviously have exceded that by a noticeable amount.

And once you get your finiquito de obra whether they have measured or not then they cannot come onto the property. Your fiscal responsibilities end with the finiquito. Legally you are free and clear.

Manuel Dexterity

Sep 1, 2009, 11:39 AM

Post #11 of 16 (10140 views)

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Re: [jl1] SEGURIDAD SOCIAL FINAL SIGNOFF

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In Reply To

This is what I've been hearing. Does anyone know if there is a standard sq. mt. price for new construction? Or does it vary from area to area?

For residential construction there are 4 categories.

Interes social.

Interes medio.

Lujo.

Superlujo.

You are paying for labor. The amount you owe depends on the amount of labor required (can be somewhat arbitrary) for the size of the job and the category your construction fits under. In certain circumstances all labor provided by subcontractors can be deducted which will reduce your obligation. But that is something that should be handled by an accountant.

Some will try to argue that anything under a roof is considered in the total area. That isn't necessarily the case although IMSS will fight you over it.

Rolly / Moderator

Sep 1, 2009, 11:49 AM

Post #12 of 16 (10139 views)

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Re: [Tio Copas] SEGURIDAD SOCIAL FINAL SIGNOFF

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Tio, thanks for sharing your experience.

I guess it's not the same everywhere with IMSS because they do come out and measure where I live, and Judy got measured in Aguascalientes.

"Your fiscal responsibilities end with the finiquito. Legally you are free and clear."

Maybe. Months after my job was closed out, IMSS came saying we had missed a payment, and they wanted their money. We had the receipt to prove them wrong. A neighbor got nailed by IMSS two years after his job was officially closed. His contractor had missed a couple of payments. Interest and penalties wiped him out.

IMSS may play by different rules in different places, not uncommon in México. The thing to remember is when they have you in a choke hold, it's hard to wiggle loose.

Rolly Pirate

jl1

Sep 1, 2009, 1:39 PM

Post #13 of 16 (10122 views)

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Re: [Tio Copas] SEGURIDAD SOCIAL FINAL SIGNOFF

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Thanks Tio--Most of my living areas are obvious and not subject to debate. The areas I am concerned about are bodega, mechanical equipment areas and, in my case, some sizeable "voids", due to the fact that we built high and are on a sloping lot. I'm also concerned about the labor estimate. Close to one third of my project was retaining walls, buttresses and voids. Thanks again....JL

Manuel Dexterity

Sep 1, 2009, 1:53 PM

Post #14 of 16 (10119 views)

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Re: [Rolly] SEGURIDAD SOCIAL FINAL SIGNOFF

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With all due respect there is no "maybe". Not to argue or belittle your experience. But it was one job. And in your case their exists a possible "lost in translation" scenario. The finiquito is issued by IMSS. It means they accept as fact that all money due was collected. If they issued your finiquito and later they feel you hadn't paid enough that is too bad. You had paid the amount agreed upon at the time they issue the finiquito. They cannot renege.

Besides, you don't make specific payments per se. You pay monthly according to the amount of workers you have on the payroll and this amount can vary greatly from month to month as you add or subtract from your workforce. All money paid to IMSS is subtracted from the final amount owed when you apply for the finiquito. If someone doesn't pay in each month then they owe more at the end. It works similar to withholding taxes in the USA. When you file for the year you are credited for the amount withheld.

Your neighbor may have recieved a finiquito del contrato from the contractor which is different from the finiquito de obra del IMSS. Again, once a finiquito de obra is issued by IMSS they cannot come back against you. And regardless of what some people have experienced (and most around here have very limited experience) many times you can negotiate in these cases.

I am not talking anecdotal evidence here. I am speaking from years of experience. The law is the law. IMSS has to observe the law.

Manuel Dexterity

Sep 1, 2009, 2:09 PM

Post #15 of 16 (10115 views)

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Re: [jl1] SEGURIDAD SOCIAL FINAL SIGNOFF

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Those are also subject to IMSS quotas. IMSS wants contributions for all new construction or remodels. Homes, walls, bodegas, swimming pools etc. Technically even demolition of existing structures, partial or complete. They all require labor. What some of these items will do for you is put you into a higher category, i. e. lujo instead of interes medio.

And FYI, in any municipio where I have worked, permits are also required for any of the above. Even if you have lived in a home for 20 years and build a bodega, replace the roof or remodel etc. technically you need to get a permit and technically workers are supposed to be covered by IMSS. A lot of these small jobs fly under the radar but that doesn't mean the rules don't apply. Here is where some people get busted down the road and pay through the nose. In my experience if you deal with IMSS in good faith, they are reasonable, if you try to screw with them you may only wind up screwing yourself.

jl1

Sep 1, 2009, 2:24 PM

Post #16 of 16 (10109 views)

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Re: [Tio Copas] SEGURIDAD SOCIAL FINAL SIGNOFF

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Thanks again, Tio...we are dealing in good faith. We took over the project from the architect/builder, who did pay monthly up until Feb. of this year. When we had 18 or so guys working, he was making the payments and we have the receipts. In recent months we only had a few guys working. My accountant is examining all the records before approaching SS. I'm sorry to hear about the pool, bodega, etc requiring payment. The better news is that all the plumbing, electrical and painting were subcontracted out, and we have those contracts. We are expecting the worst but will be okay. As I said earlier, this is not a spec house, but one that will be in my family for generations to come.....thanks again.