Purchasing Real Estate in Nicaragua
Nicaragua has become a new destination that is why there are many people interested in this country. People are coming both, to spend their holidays and to live as a retiree or to run a business and make a living in Nicaragua. In any case, people purchase properties for several purposes. It can be: a beach house, a city house, a lot, a farm, a hotel, and so on. The purpose of this article is to provide a general guide and share some information regarding Real Estates transactions in Nicaragua in order to help anybody interested in the process of buying properties.
First and foremost it is imperative, to understand how the system works in Nicaragua, especially because laws and rules here are different from other countries, in Nicaragua the law is based on a Civil Code. Before buying a property everybody should know that all property contracts (Sale and Purchase or Promise of Sale) have to be duly notarized in Nicaragua. Attorneys at Law are at the same time, Lawyers and Notaries. A Notary has to draft a contract - Deed – which has to be signed in front of a Notary on a special legal paper following a specific order, all according to the law. Any purchase can be done by anyone through a Power of Attorney (POA) granted by the buyer or seller, if the POA is issued abroad it has to be legalized, Apostilled or Authenticated depending on the country of origin.
Countries that are members of The Hague Convention for Public Documents, use stamps and seals called Apostille in the United States. Countries that are not members of the Convention, such as Canada, have to authenticate every single document in order for it to be valid in Nicaragua. Individuals and corporations are able to buy properties in Nicaragua. However, foreign corporations must be registered first in the country before buying a property. Regarding Due Diligence, a public office maintains a file of every property transaction (Real Estate Properties), and there is one office in every main city in the country, this office is called: The Public Registry of the Property and it´s in the dependency of The Supreme Court of Nicaragua.
It is always absolutely necessary to check the history of the property, especially since 1979 to confirm if the property was or not confiscated during the 80’s; also the seller has to provide a History and a No Liens Certificate, of which both have to be obtained at the Public Registry of the Property in the province where the property is located. Additionally, a Municipal Solvency Certificate from the municipality, for proof that the property taxes have been paid, as well as a map from a topographer, approved by the Cadastral department to confirm the exact location of the property, will also be needed.
Before making the decision of buying a property it is imperative to be sure of its legality.
The second point to take in consideration, is the registration process, namely, transferring the title of ownership of the property from the previous owner to the new owner, which includes three steps:
Obtaining a Cadastral Certificate which confirms the location of the property.
Obtaining the valuation of the property, in order to determine the transfer tax of the property.
Registering at The Public Registry of the Property in the province where the property is located. This process will take several months depending on several factors, it is important to be aware of that from the beginning.
Finally, it is important to take into consideration that in Nicaragua “Joint Tenancy with Right of Survivorship” doesn’t exist, therefore, a Will & Testament is the best option to transfer a property in the event of the demise of one of the owners the owner dies.