Necessary documents in order to evaluate the viability of a property in Nicaragua prior to the signing of a contract.

Posted by: Norma Jaen Hernandez | Intern at Alvarado y Asociados

Even though in our country there is a complete and clear legal framework regarding Real State, as a result of the events occurred in Nicaragua in the second half of the 20th century and the bad habits that people have of not registering the transfers of their properties, sometimes there are inconveniences or new challenges that makes the contracting on certain goods more difficult..

For that reason and in order to avoid any kind of complications, is necessary to know which are the documents that we should analyze prior to the signature of an Immovable Property Contract. In order to undertake our analysis, we have to divide them in Key Documents and Additional Documents. Whitin the first we have the following:

  1. Title of Domain.
  2. Certificate related to the precedents of the Property.
  3. Updated certificate related to any encumbrance that could falls on the property.
  4. Municipal Solvency.

Regarding to the Domain Title, we can say that it has to be a Testimony of a Public Deed authorized by a Nicaraguan notary in which state that the person with whom we are going to contract is the legal owner of the property and it has to include the official seal and registration data of the Public Registry of the Immovable and Commercial Property of the Department in which the real estate is located.

 

In relation to Certificate related to the precedents of the property, as its name indicates, it is an official document issued by the Public Registry in which the successive tract of the property is recorded, that is to say who has been the owners of it and how the domain of the good has been transferred. This document helps us to verify the way in which the property came into the hands of the person with whom we wish to contract and if those transfers have been made in accordance with the Nicaraguan law. Is advisable to request this Certificate for the last thirty years because this is the term of the Extraordinary Acquisitive Prescription.

As a third essential document, is necessary to review an Updated certificate related to any encumbrance that could fall on the property, it is also an official document and allows us to know if any encumbrance falls on the property, such as the constitution of a mortgage or usufruct in favor of a third party.

Finally we have the Municipal Solvency, which is an official document issued by the Municipality in which the property object of the contract is located; with this document we can verify if the owner of the property has fulfilled its obligation to pay the taxes that fall on the property and at the same time allows us to corroborate that the registered owner is the same person who is registered as such in the municipality.

Once we analyzed the fundamental documents, it is necessary to review certain "Additional Documents" such as:

  1. Cadastral Certificate.
  2. Approved Topographic Map.
  3. Certificate of Non Objection issued by the General Attorney Office of Nicaragua.
  4. Cadastral Technical Report.

Regarding to the Cadastral Certificate, it comes to be an essential requirement when we are facing a domain transfer agreement, such as a Purchase-Sale Contract, Donation Contract or any other act of compulsory registration. This is established in article 41, subsection C of the Decree Number 13-2013 Regulation to Law Number 698, General Law of Public Registries:

 The documents or titles of acts or contracts that must be registered, will express at least, all the circumstances that, under pain of nullity have to contain the inscription and are related to the person of the grantors, to the property and the rights inscribed, expressing the next:

  1. A reference to the cadastral data of the real estate, according to the Cadastral Certificate.

So we can say that this document must be noted because at the time of the contract signature, it must be included as an indispensable requirement, otherwise the registration of our legal business could be denied or suspended and also it allow us to identify if the area and owner of the property coincide with the registration data.

As the second additional document to be reviewed, we have the topographic map that also constitutes a conditional requirement in order to carry out the delivery of the aforementioned Cadastral Certificate. It must be related in the document with which we intended to record the transfer, sale or modification of the property (article number 38 of the National Cadastre Law and article number 104 of the Regulation to the Cadastre Law) and allows us to confirm the identity of the property, that is to say if the property on which the topographic survey was carried out is the same one that is registered in the Cadastre and in the Public Registry in favor of the person with whom we are going to contract.

The Certificate of No Objection issued by the Attorney General's Office, at first, is not an indispensable requirement but it becomes necessary in the following cases:

  1. When the property to be transferred is located in coastal zones, border areas or natural reserve areas.
  2. Properties originated in Supplementary Titles or acquisitive prescriptions that do not have registration records after 2008.
  3. Properties whose immediate antecedent comes from extinct Banks.
  4. The transactions whose antecedent comes from Agrarian Reform Titles as is established in Law No. 14, Law of Agrarian Reform and Law No. 278, Law of Urban and Agrarian Reformed Property until the second registry seat.

This Certificate of No Objection has the purpose of speeding up the registration process, which could present certain obstacles in the aforementioned cases and also avoid the illicit traffic of properties.

As a last additional document we have the Technical Cadastral Report that is made and issued at the request of the owners of the property when there is any doubt about the identity or area of ​​the property (Article 25, General Law of National Cadastre) in order to clarify the doubts or inconsistencies that could occur when we comparing the reflected in the topographic map (area, boundaries, etc.), with the registry information.

We can say that these documents constitute an indispensable set of resources to be used to assess the suitability of a property prior to contracting on it. With regard to additional documents, their need of use is subject to the particular conditions of the property and for the specialty of the area and institutions is essential to have an appropriate legal advice, so before carrying out the signature of the contract is very important to have a legal opinion in which the aptitude of the good is valued.

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