Real estate expert Sergio Gutiérrez warned buyers converting commercial property into housing to secure written town council approval before signing purchase agreements. Transforming commercial spaces into residences has become one of the most popular strategies for real estate investors, but failing to obtain written municipal confirmation can cause severe financial losses.
Gutiérrez said first-time investors frequently make a costly mistake when purchasing commercial venues. In a common scenario, a buyer identifies a well-located property, verifies that it meets basic requirements, calculates prospective returns, and asks the local town council about changing its use. When municipal officials indicate verbally that the change appears viable, the buyer negotiates the price and closes the transaction believing they found a great opportunity.
According to Gutiérrez, the worst novice mistake occurs after acquiring the building, when the new owner formally applies for the license and the town council denies it. The buyer is then left with what Gutiérrez described as a nice commercial property that cannot be converted into a home. Owners also lose money on purchase taxes and transaction fees if they decide to sell the property again.
Conditional contracts for buyer protection
To avoid this outcome, Gutiérrez advised buyers not to rush and to use available legal tools before completing a transaction. He recommended conditioning the reservation agreement or deposit contract on receiving written confirmation from the town council that the site can legally become a residence. He said buyers should not be afraid to demand written guarantees from municipal authorities.
Gutiérrez acknowledged that sellers will logically reject this request at first because they do not want to lose a sale. However, he encouraged buyers to insist, saying sellers often accept the condition in the end. He added that conditional clauses become the best protection against future problems, emphasizing that legal documents exist to provide transaction security and buyers should use them to their advantage.
