What happens to your money if a real estate project in Peru falls through?

First: figure out who the failure is attributable to

When a real estate project doesn’t get built, the legal answer isn’t the same in every case. It depends on who’s responsible for that happening:

• The real estate provider (the company breached the contract, stopped building, or the sale simply wasn’t carried out through their fault).
• You, as the buyer (you stopped paying, you backed out).
• A third party or an external circumstance (the bank didn’t approve your loan, a subsidy wasn’t disbursed, a permit was denied).

This guide separates the three scenarios. If you haven’t yet checked what a developer must give you and what your contract must say before you buy, start with our general guide on buying a home in Peru.

If the fault is the developer’s: a full refund, no need to prove harm

This is the scenario with the clearest protection. If you bought from a real estate provider — a company that sells property habitually, whether pre-construction or already built — and the sale isn’t carried out for a reason attributable to that company, Indecopi’s official Guide establishes a direct right:

The provider must refund all advance payments made under any concept, just by the consumer’s request, if the sale isn’t carried out for reasons attributable to the provider.

This means two important things:

1. You don’t need to prove you suffered harm to demand your money back — just requesting it is enough.
2. The refund must be for the full amount paid, not a portion, and “under any concept” — meaning not just the reservation or the down payment, but everything you disbursed.

If you’re also seeking additional compensation (for example, for lost time or extra expenses you incurred), that does require proving the harm, and it’s only available through consumer arbitration — not through a simple complaint or the administrative complaint process.

If the fault is yours: the regime depends on what you signed

If you stopped paying or backed out of the purchase, the answer depends on what you actually signed:

• If you paid confirmatory arras and you fail to perform through your own fault, the other party can keep the arras (Civil Code, art. 1478).
• If you paid retraction arras and you’re the one who backs out, you lose it in favor of the other party (art. 1480).
• If the payment wasn’t technically arras (for example, a down payment within a direct-financing schedule, or a simple reservation fee without that legal character), the outcome depends on the penalty or cancellation clause you signed in your contract — not directly on the Civil Code.

For more detail on the difference between confirmatory and retraction arras, see our guide on how arras work when buying a home.

If the problem is a denied permit: it’s not automatically “force majeure”

A common scenario: the developer can’t finish the project because a municipality denied a license, or a title-regularization problem came up on the land. It’s tempting to think that frees the company from all responsibility toward you, as if it were an unforeseeable event outside their control.

That reading is, generally, incorrect. Obtaining the necessary permits and approvals before selling is part of what’s expected of a real estate provider. Indecopi’s Guide’s refund guarantee doesn’t carve out permit problems — the cause remains, in principle, attributable to the provider. This page doesn’t evaluate every specific case (some nuances can change the analysis), but it does warn that a simple “it couldn’t be done” from the developer isn’t, by itself, enough to deny you a refund.

If the problem is that your financing wasn’t approved or a subsidy wasn’t disbursed

This is the least uniform scenario, because it depends almost entirely on what you signed:

• If your reservation contract includes a financing condition (a clause making the purchase contingent on your loan being approved), the bank’s rejection shouldn’t be treated as a breach on your part.
• If your contract doesn’t include that condition, you run a real risk of being treated as if you backed out yourself, with the consequences that has for the money you already paid.
• If your purchase depends on a subsidy like the Bono Familiar Habitacional (Techo Propio) or the Bono del Buen Pagador (Mivivienda), this page does not cover what happens to the grant if the purchase falls through. What we do explain is how the two programs differ.

So before signing any reservation, check expressly whether a financing-condition clause exists — and keep it, because it can be the difference between getting your money back or losing it.

How to complain if the developer doesn’t refund your money on its own

1. The company’s Libro de Reclamaciones or Reclama Virtual — it has a maximum, non-extendable 15 business days to respond.
2. An administrative complaint with Indecopi — if the direct complaint doesn’t get resolved. You have 2 years from the event to file it.
3. Consumer arbitration — the only route that can also award you compensation, if the harm is proven.

For the full detail on each channel, including the Defensoría del Cliente Inmobiliario, see our general guide on buying a home in Peru.