Uniform Guidelines for Records of Real Estate and Commercial Property

Aug 29, 2022 | English Blog


Posted by: Jazmín García | Associate at Alvarado y Asociados.

Surely on some occasion it will have happened to you to find that in some public registries of real estate and commercial property in the departments, outside of Managua, the requirements for registration, or denial thereof, work differently, and colloquially it is said that each registry functions as an independent republic, since the requirements or requests to be met in the Managua registry may vary, for example, in the Granada registry or another department, so that it is impossible for the user to know with certainty what documents or requirements must be filled out or what omissions could be corrected, a situation that often causes inconveniences or delays for users.

Due to the foregoing, the National Registry Office of the Supreme Court of Justice, which governs the National Registry System throughout the country, issued Agreement DNR 01-300720, in an effort to harmonize practices in the public registries of real estate and commercial property in order to make it less cumbersome for the user to go to these dependencies of the judiciary.

The aforementioned agreement is based on Law 691 “Law for the Simplification of Procedures and Services in the Public Administration” and Law 698 “General Law of Public Registries”. In the agreement, the National Registries Directorate (DNR) approved the qualification criteria applicable in the commercial registry, and contains guidelines for both, notaries, that will simplify the exercise of the profession, and the registry personnel at the national level, facilitating the work of registrars and analysts.

In this way we find that aspects such as grounds for suspension, what content of the notarial instruments can be corrected, what definitely is not, that it is possible to clarify, modify or rectify, have been taken into account so that the attention to the user is done more expeditious.

We are going to mention the most relevant content of the agreement, since it would be too extensive to consider all its content.

It is important to indicate to notaries that:

Public instruments will not be suspended in the following cases:
   a. When the parties or the notary are in a municipality other than their domicile, and they do not state that they are in transit.
   b. When in the case of Nicaraguan appearing parties living abroad, they are identified either with their passport or with their identity card.

Regarding clarifications and rectifications:
   a. The notary may personally and before himself, clarify errors or omissions in form and substance that do not affect the successive tract and rights of third parties.
   b. Form errors may be clarified and/or rectified before any notary.                                                                                                                             c. Public documents with errors or omissions that can be verified through registration information sources, will be registered, and said circumstance will be recorded in the observations field.

In general, registry will not suspend:

   a. The judicial sentences in which errors of form are evidenced, as long as they are verifiable in the Nicarao system or in the source of information of the registry.
   b. Those deeds in which the general information of the parties, the notary did not express whether the appearing parties are of legal age, their marital status, their profession or occupation, as long as they are identified by name, surname and identity card number.
   c. Insertions that present an error as long as the information can be verified with the documents presented and attached.

Regarding registrable documents:
   1. Constitutions of legal persons in associations, consortiums and any type of companies, by means of an agreement, power of attorney or enabling document,
   2. Rectifications, additions and extensions to the constitutive agreement by means of a notary public without going to court, provided that it is not about the name or the share capital.
   3. Minutes that express that the formation of the quorum, whether face-to-face or virtual .
   4. Additions, clarifications, rectifications, ratifications and revocations, which will be linked to the seat of the registered powers.

In relation to companies, it is indicated that:

   a. The abbreviation of a denomination or company name may be totally or partially detached from it.
   b. It will not be suspended when the abbreviations do not contain “SA”.
   c. Any provision of the General ShareholdersMeeting may be registered as it is the highest authority.
   d. Reforms to the articles of incorporation by judicial means must be processed in the competent court of the domicile where the company is registered.
   e. A partner who is a member of the board of directors may in turn be appointed security guard, if the statutes allow it.
   f. An instrument will be registered if the minutes where the agreements were made are attached or inserted.
   g. The ratification or new election of the Board of Directors will not be suspended when its registration is requested before its expiration date.
   h. The minutes must express those cases in which the partners are represented in the session, indicating that the enabling means (power of attorney, letter, electronic mail, fax or other) was in view.
   i. One or two positions on the Board of Directors may fall to the same member.
   j. Unelected positions contemplated in the articles of incorporation or bylaws may be elected later.
   k. It is not cause for suspension when the functions of the positions of the Board of Directors are not expressed in the agreement and the statutes.                                                                                                                                                     

   l. The Opening of a Branch of a foreign company will be registered, even if it does not bear the words “Nicaragua Branch”.
   m. It is not a cause for suspension if the place and time of the celebration are not stated in the inserted minutes.
   n. It is not grounds for suspension when a sentence amending the Articles of Incorporation does not fully contain the minutes of the General Shareholders’ Meeting, it will suffice to attach a certified copy of the same.
   o. Transfers of shares can be presented in a public deed of sale, assignment and donation.
   p. A company may be constituted with fractional shares.
   q. A share can be owned by two or more people without this being understood as being divided.
   r. The shares may be sold at market price.
   s. The new term of duration can be registered when it is not the same stipulated in the constitutive agreement.
   t. Transformations from corporations to Limited Liability Collective Companies or vice versa may be carried out by means of a public deed.
   u. The Dissolution and Liquidation of the Company may be registered in the same act.
   v. When the company has not carried out operations, the registration of the dissolution will suffice, inserting the closing balance authorized by a CPA.
   w. For publicity purposes, the certifications of minutes containing the agreements reached at General Shareholders’ Meetings, Partners’ Meetings or the Board of Directors issued by the secretary or the authorized person are registrable.
   x. The formal registration of the power of attorney must complete the formalities of the Law of Notaries.

As for the Powers, will be registered without further formalities those:
   a. Powers granted by Associations, Cooperatives, Foundations, Confederations and between individuals.
   b. Powers of attorney granted abroad as long as they meet the apostilled requirement in the signatory countries of the apostille agreement or the authentication chain in those that do not.
   c. Powers of attorney granted to more than one representative in the same document, which will generate a single entry and one registration record.
   d. Revocations presented that refer to an record where “n” number of agents have been registered, in which the record will be partially canceled as regards the revoked agent, leaving active the other agents whose power of attorney is not revoked.
   e. Powers of attorney when the person designated to appear before a Notary Public is the same person that the competent body granted the power of attorney.
   f. Powers granted between individuals when:
     i. The power of attorney is not more than five years old.                                                                                                                                                 ii. If it has been granted for more than five years, you must present a public deed of ratification of power by the principal.
     iii. It was verified if the deed of power was reported by the notary in the index of his Protocol to the Supreme Court of Justice.
     iv. It was verified with the Registry of Civil Status of Persons that the death of the principal or agent has not been reported.

As for Merchants: 

The registration or modification of the merchants may be carried out through an application or public deed, even if the notary has not been in office for ten years. Incorporated.

It will not be suspended when the commercial name of the company expressed in the agreement is different. 

The trade name may or may not be the same as the name of the company and the registration of a company will not be suspended when it contains more than one trade name.

The sealing of two books of Minutes may be authorized: one for the agreements of the General Meeting of Shareholders and another for the Board of Directors, which must be authorized by the General Meeting of Shareholders, Board of Directors or by express designation, if it is by loss or deterioration indicating the number of reason for sealing books.

Apart from the above, the registry will have other powers related to clean-up, clarifications, rectifications, replacement, corrections, cancellation, consolidation of entries that we recommend knowing, to try to work together with the registry staff and avoid delays for all those involved in the registration process.

While not a recent agreement, many of these provisions are unknown to some registries or users, slowing down registry traffic. Unfortunately, more than once it is the user who makes the indications as to what the registration staff should require when qualifying a document for registration, a situation that we hope can be overcome with this agreement.