Condo owners could lose their investment as government decides which earthquake-damaged buildings to demolish

Hundreds of condo owners, including many foreigners, could be in for a shock as Ecuador’s Ministry of Housing decides which buildings damaged in the April 16 earthquake must be torn down.

Damaged condos will be demolished. (El Comercio)

Owners in at least five condominium projects in Bahia de Caraquez have discovered that their building administrators had failed to make property insurance payments or, in two cases, had never taken out insurance policies at all.

“We had a meeting of the some of the owners last week and were devastated to find out that our administrator had stopped making insurance payments almost a year ago,” says Rita Hansson, who divides are time between the U.S. and Ecuador. “He never told the board of directors and now he’s disappeared,” she said.

Hansson asked that the name of her project not be named as owners prepare legal action against the administrator and his company. “We are in touch with the attorney general’s office and our own attorney, but so are owners of other condominiums,” she says. “Unfortunately, and sadly for most of us, the process of will take years to litigate and we could still end up losing everything,” she added.

A building in Bahia slated for demolition.

According to the director of local planning in Bahia de Caraquez, near the epicenter of the earthquake, 31 buildings five-floors are higher are being evaluated by the Ministry of Housing and may have to be demolished. “We already know that many of these buildings cannot be saved due to structural damage,” says Javier Tellado. “They show large cracks on exterior walls, especially on upper floors, and some have cave-ins of interior and exterior walls. These will need to be torn down as soon as possible.” Of the 31 buildings, all of which are currently condemned, about half are condominiums built within the last 15 years, Tellado says.

The situation is similar down the coast in Manta, Tellado says. “I understand that they have about the same number of buildings that are currently condemned.”

Like others focusing on the safety of buildings, Tellado says he is aware of lack of property insurance on many of the buildings. “There are many tragedies in this earthquake and it will take years for us to recover,” he says. “The legal issues will probably continue for many years after we have rebuilt.”