Coming out of the dark

Emily and I returned from our trip to the Esmeraldas province on Friday, November 15th.  We were checking properties further north than we had looked before, and I've got a ton of information that I'll be sharing.  Today is not that day, however.

On Saturday morning, the 16th, we heard a loud "BANG!" and the power immediately went out.  Emily and I (along with the property owners) looked around for the cause of the failure and it appeared to be on the main line running along the highway.  The owners put in a call to the power utility requesting service, but no one was available.

The utility offices are closed on Sunday, so the calls started again on Monday.  With the assistance of our housekeeper (it's best if an Ecuadorian makes these types of calls), we were told that someone would be out to look at the problem.  When?  They didn't know.

At 10:30p, a pickup pulled up next to the utility pole that feeds service to this property.  One of the guys climbed up a ladder (about 25 feet) and found a faulty switch/insulator device.  They had it replaced within an hour, but that didn't solve the problem.  They blamed it on the transformer on the spur line that feeds the houses.  After some discussions and skepticism, it was decided to replace the transformer.

(Why did they wait until Monday night to come out?  One of the line workers told us that Gringos are low on the priority list when it comes to getting service.  If it had been an Ecuadorian house, the utility company likely would have been here on Saturday.)

We were told that the new transformer would arrive on Friday, the 22nd.  In the meantime, Emily and I would load up our computers and phones once each day and head to a local restaurant to recharge and use the WiFi.  A special thanks to Jaibel at Patacon Pisao in Puerto Lopez and the Hotel Montanita (in Montanita, of course) for providing services.

We also adapted to living without electricity.  The stove and oven are gas, so cooking was no problem.  Candles and a kerosene hurricane lamp worked for lights:

The property is on city water, so no pumps are necessary for getting water or using the toilet.  The only drawback: the shower.  Since it's a suicide shower with the electric shower head, we had no hot water for showering.  No fun!  We did get caught up on our Kindle reading, however:

(To be fair, the property owner did have a generator and offered run an extension cord over to our cottage.  I thought it would be good practice to go without, however; infrastructure in Ecuador is still developing in most areas, and we likely won't have power available when we start building our place.)

Thursday night at 9:00p, four guys showed up in a pickup with the new transformer!

Here comes the interesting part: installation.  First, the old one had to be removed.  One of the guys climbed up a ladder (about 30 feet), hooked up a block and tackle pulley and unbolted the old one:

(Sorry about the water spots on the camera lens.)  Once it was down, they hooked up the new one to the same system:

This transformer is filled with oil and weighs about 450 pounds, way to heavy to lift by hand.  Once it was tied up to the pulley, the other end of the rope was tied to the truck through a lateral pulley:

Watch your toes, dude!

A friend of mine was commenting once on his zip-lining adventure.  Being a critical thinker, he looked at the setup and thought, "I wonder how many single points of failure there are in this system".  The same thought occurred to me here: old pulley, a single rope for lifting, knot failure, welded hooks on the transformer, no secondary/safety line, etc.  No problem - that's Ecuador!

Once it was halfway up, the rope was untied so that the pickup could back up and the rope could be reattached:

The guy on the ladder bolted the new unit in place, made the connections and, at 11:00p, the lights came back on!  Thanks guys - drive home safely!

No more excuses for me.  It's time to finish organizing the pictures and notes from our Atacames trip and find our new home!

House Hunters: Episode Two

Back to business.  The last few posts have been fun, but I want to remind everyone of our number one purpose: finding a place of our own in Ecuador.  We have been renting a very nice cottage for the past six weeks, but it's not our final destination.

I need to lay out some of the ground rules for buying property in Ecuador.  Unlike the States, there is no centralized or regulated process.  There is no MLS system for listing properties, and there are no exclusive buyer/broker or seller/broker relationships.  Brokers are not even required; property can be purchased directly from an owner with only a lawyer to ensure that all of the documentation is filed properly.

But it gets even more interesting from there.  First, the Manglaralto White House from my previous post:

 This property falls under a shared-ownership obstacle.  In this case, the property is owned by seven siblings.  One of them is still in Ecuador, but the other six are not here anymore; they live in the US, Norway, South Africa and other locations.  To sell the property, all seven must agree on the terms in writing; not an easy thing to do with this house.

Another obstacle can be an inheritance property.  When one of the original property owners dies (usually the husband - women live much longer here), the rights to the property are split 50/50: half to the surviving spouse and the other half distributed among any children.  To sell a property, all of the owners must agree to the terms.  Trying to buy a property in this situation can be tied up in the courts for years.

An aside: I know a woman who bought a property like this, vacant, and built a house on it.  One of the property owners showed up after all of the improvements had been made and reclaimed it.  She lost her entire six-figure investment.  She had been shown a false deed to the property and had accepted it without doing the necessary background work.

To purchase property, good lawyers are absolutely necessary.  They will not only ensure that the escritura (title) is free and clear, they will also check the previous six owners for any liens against the property.

Speaking of liens, anyone who purchases a property assumes any financial obligations tied to it.  Here are two such instances:

• One owner left Ecuador and moved to the States after the government placed liens on his business.  Since he was no longer in the country, the liens fell to his property instead.
• Many residents in Quito and Guayaquil owned property on the coast and used the electric service free of charge.  The electric company had failed to install meters on the property; the juice was coming in free from the electric lines that ran along the highway.  Once the electric company began cracking down and installing meters, the property owners abandoned the lots rather than pay their bill.  Many of these properties are currently for sale, but the back utility costs fall on the new property owners.  (Much different from the States where that cost would be incurred by the individual.)

Perhaps the most tangled web of debts comes from purchasing a previous business.  This is a property that Emily and I call the "Rio Chico Compound":

This lot is in a great location: Rio Chico is just south of Manglaralto and has great fish and vegetable markets.  It also has over 200' of beach front, almost unheard of in the area.  The buildings need some rehab, of course, but this place could become a Pacific front oasis for renovation costs under $30,000.  (Labor costs in Ecuador run about $15/day per worker and materials are relatively cheap.  New facades could be created for very low cost, and even teardown/rebuild prices are low.)

Unfortunately, there is a caveat.  (Of course there is!)  In the second picture, the brown building on the right is a hostel, and the people who run the hostel also live on the property.  (The also operate the little tienda at the front, right side of the property).

If we were to buy this, we would have three options with regards to the employees:

• We could buy the property and fire the workers.  We would then be responsible for 25% of all income that they had ever earned on the job as severance pay, but we would then own the property free and and clear.  That wouldn't be too popular with the locals and might result in broken windows in the middle of the night.
• We could require that the current owner fire the employees and incur the severance fee cost before we buy.  Since the owner is currently under financial hardship, this isn't likely to happen.
• We could buy the property and keep the employess on board to run the hostel.  Do we really want to run a business on our property from the get-go?  Probably not.  They would probably expect continued housing to be included as well.

Another interesting note about this property and how it relates to the realty process.  We had two different brokers show us the property, and here's what they presented:

• Hector, a broker we know and trust, told us the asking price.  He also mentioned that the workers on the property hadn't been paid in months and the price was very negotiable.
• A second broker, a slick-talking local who runs a real estate business in Montanita offered the property with a $50,000 increase in price and made no mention of the current obligations that the property held.  He also said that the price was firm and that it would likely sell for much over the asking price.
• Additionally, we've also recently seen this property for sale on a local website where the asking price is $110,000 over what Hector told us.

I do know people living on the coast here that have successfully purchased property and are very happy with what they have, but many of them have done so without understanding the full legal implications and trust their lawyers to handle all of the paperwork.  Emily and I want to know the property purchase process in as much detail as possible (like with our visa application) so that we don't get caught with any surprises.

Spoiler alert for those you that watch House Hunters, International.  It is an entertaining show to watch, but it's usually packaged together after a sale has been completed.  I've met a couple of the people that have been featured on the show, and they did not have the purchasing experience as it was presented on the show.  Again, it makes for good theater, but it's not that easy!