For Immediate Release, March 19, 2009
Contact: Peter Galvin, (707) 986-2600, firstname.lastname@example.org
Hidden Threats and Greenwashing Abound for
Investors in Foreign Real Estate
SAN FRANCISCO— Purchasing property in Latin America is nothing new to American investors, but with the recent economic downturn and uncertain U.S. market, U.S. homebuyers and retirees may be more tempted than ever to invest in ostensibly attractive real estate deals in Latin America. Unfortunately, even the most savvy investors may face multiple challenges, including unfamiliar legal systems, unreported or underreported environmental impacts, substandard construction, and unprincipled developers who evade accountability in U.S. courts. The recent allegations of fraud and misrepresentation against real estate tycoon Donald Trump and a Baja California, Mexico resort is just one example of how seemingly good investments can go wrong.
Recognizing the urgency of the situation, the Center for Biological Diversity’s conservation director, Peter Galvin, is issuing an open letter to American investors and a formal plea to attorneys general and secretaries of state to issue specific consumer-safety guidelines warning investors of the dangers of investing abroad.
Galvin stated, “Americans need to be very wary when looking at investing in real estate abroad. While prices may seem low and promises of environmental sustainability sound very attractive, the on-the-ground reality is often very different from developers’ flowery promises and slick sales brochures. Some investors have lost their life savings due to faulty or disputed land titles; many others have purchased homes or property they were led to believe was part of an environmentally sensitive development plan, only to find out later about the severe environmental destruction caused to create and maintain these false or ‘greenwashed’ development projects.”
The Center recently published a policy analysis on the risks faced by American baby-boomers — a generation with an estimated value of $15.5 trillion over the next 20 years — when purchasing “green” real estate in Latin America. The analysis highlights two developments in Latin America that have, by many peoples’ standards, failed to live up to their promise to be green. It looks at how federal law, and the laws of California, Texas, Arizona, and New York — states with high numbers of retirees — can protect investors.
The findings of the policy analysis are disturbing: While investors have some recourse in U.S. courts or abroad when developers’ promises turn out to be false, investors who’ve specifically bought into “green” developments that turn out not to live up to their environmental promises currently have very little legal recourse when things go bad. The Center is sending its policy analysis and open letter to the attorneys general and secretaries of state of all 50 states with the hope that the appropriate regulatory agencies will alert their constituents about the perils of investing in real estate abroad, in particular projects marketed as “green.”
Read Greenwashing Risks to Baby-boomers Abroad.
The Center for Biological Diversity is a national nonprofit conservation organization with nearly 200,000 members and online activists dedicated to the protection of endangered species and wild places.