Some Chilean professionals have a lot of power – too much power in fact. Architects fall into that group.
You might ask, “In what sense does an architect have power?” Well, he has a lot if you hire him to build a home for you or for your construction company. He gets to make calls that affect your business and life, whether you like it or not. And it is almost impossible, or at least very time- and cost-prohibitive to do so.
Architects in Chile are more like applied artists with a tinge of desk jockey mentality. They do very little math—indeed math and engineering are hardly required in their university studies—compared to the calculistas (civil engineers) that Chilean architects hire to do certain jobs at your site. Those specialists usually do a good job, as do most architects. Chile has the most earthquake-proof buildings in the world, after all.
They also manage the proyectistas de especialidades, people that specialize in water, sewer, gas, and electrical hookups. They do end up having to manage their own in-house draftsmen, secretaries and errand runners, along with the many subcontractors they hire out for services at jobsites. They also should keep up on new materials and products.
Americans in Chile will detect a lot more general contractor in the job than architect, and that is about right. Remember, cultures are different, and so are their practices. In the United States, architects are highly-trained civil engineers with an art flair; In Chile, they are art and public administration double majors with a wannabe squirt of physics and math added for good measure.
The reason that Architects are so powerful is that they control the entire building process, including the almighty government approvals. The local municipality will not allow just anyone to submit plans and deal with bureaucratic regulation. Architects must do it. And at times architects can turn into outright extortionists.
In the beginning, meetings with your new architect will be pleasant, cordial, professional and sane. Contracts will be signed and everyone will be happy. But time might erode those good feelings as everyone goes through the ups and downs of the building process, which can often take eighteen to thirty months in Chile.
Just before you finish the project and you are ready for your architect to ask for inspection and the recepción municipal, the final bureaucratic hurdle, the architect can demand more money. If you do not pay him then you will not get your building or home approved and your beautiful new property will remain considered as a vacant lot under Chilean legislation. Of course, his actions will not look like a total shaft or shakedown. He will make up some reason why you still owe him for legitimate expenses, costs or professional fees that were not in the contract or were ambiguous.
Of course, you will be mad about these doleful circumstances, wrought because the Chilean government grants too much power to professionals in general, and architects in particular. You will scour the contract you signed two years ago, and find that you have paid your architect in full—or at least all that you are required to pay at that point. You will find that the architect might have even left some contractually promised services undone, and has no intention of doing them. Hence, you will call a lawyer and have a serious chat with him. The lawyer will review the contract and payments made and tell you that you are probably right and would even win most points in a lawsuit. But he advises you to pay up anyway, just like you would pay off a crooked bureaucrat as a matter of “just being part of the way business is done.”
Why would you succumb to the extortion? Because the architect knows that up to certain amounts, say US$5,000 or US$10,000, it is not worth fighting him in court. The architect will go to court “all day” since he has already received 90% of his pay. He will lose some reputation points by being sued, and you will never hire him again, but so what? That course is the way that the majority of Chileans act, playing what economists term a “one shot game” (like the auto mechanic does that rips off tourists he will never see again when their car breaks down).
You on the other hand, stand to lose your entire investment if you cannot sell it given that, legally, all you have is a vacant lot. It will take years in the courts to win a judgment and might cost just as much as the “bribe.” Plus, you will lose sales revenue and tie up your capital by sticking with your unsaleable property. You can still live in the place you build—even if it is not “received” by the municipality. But you cannot sell it. So, your lawyer advises you to just pay. You call it extortion. The architect calls it good business. The lawyer calls it sad, but logical and efficient given the “rules of the game” set up by the government.
Not all Chilean architects are extortionists (i.e., those that practice chantaje). However, you cannot know for certain from the outset that your architect will be honest and honorable. The best strategy you can take is (1) use a lawyer to draw up the contract with the architect (worth the cost) and (2) set aside US$10,000 (in a savings account) and plan on having to pay it out to the architect–above and beyond the US$15,000 to US$30,000 or more that you will have to pay him. That way, by planning to pay it out some day, losing it will be a lesser shock and not hurt or irritate you as much.
One strategy you can try in order to avoid being extorted is to contractually hold back 25% or 30% of his fee until after he delivers the municipal approval to you. Since doing so will cut his extortionist feet out from under him, he will not likely agree to it. I also recommend that you hire an architect that has money, even if he costs more. If you go with the cheaper professional, there will be nothing to get from him in terms of damages should you end up suing him.
Another possible strategy is to hire two architects and pay the second one to piggyback on the first one, so that he can step in if the first one fails or starts extorting you. However, the cost of the piggyback architect’s services might be as much as the payoff required, so you might gain little other than the pleasure of smashing the extortionist.
Think about it. You are “not in Kansas anymore.” Beware of local practices and how to deal with them.
Dr. Cobin’s updated and enlarged 2016 book, Life in Chile: A Former American’s Guide for Newcomers, is the most comprehensive treatise on Chilean life ever written, designed to help newcomers get settled in Chile. He covers almost every topic imaginable for immigrants. This knowledge is applied in his valet consulting service–Chile Consulting–where he guides expatriates through the process of finding a place to live and settle in Chile, helping them glide over the speed bumps that they would otherwise face in getting their visas, setting up businesses, buying real estate, investing in Chilean stocks or gold coins, etc. The cost is $149.
For a brief introduction consider Dr. Cobin’s abridged book (56 pages): Chile: A Primer for Expats ($19), offering highlights found in the two larger books. Buy Dr. Cobin’s Public Policy books at Amazon.com: