Nicaragua Real Estate Transactions (1 of 3)

Due Dilligence Before you Buy

Documents to Review

Nicaragua property law has had its ups and downs....and is very different from modern registration systems in place in the US and Canada. Its likely that you will be unfamiliar with the process when you start looking for property but that does not automatically mean it is dangerous.
There have been changes in the past, and people have gotten burned....but you don't have to. You can make you purchase easy on everyone involved by following some simple guidelines. In this series, we will discuss what to look for, what to request from the seller, and things to steer clear of entirely.
There is always a paper trail. Make sure that you know everything about the property you are buying. A good attorney or agent will help you locate all the necessary documents to ensure a successful transfer. Here is a list of the documents you should be focused on and what to look for:
Request from the seller:

1. Title of property, make sure it is properly registered; previous titles if possible.
2. Freedom of encumbrance's certification (current).
3. Property map properly authorized by the CADASTRAL office, especially when a subdivision of property is being done.
4. Municipal property taxes solvency with the property location, declaring if the property is up to date with its tax obligations.
5. Carte de no Objecciones - allowing you to resell the property once it is yours

If the property falls under the Agrarian Reform act of 1979, buyers should request the following documents before the sale takes place:

1. Document from the Rural Office stating that the reform took place legally.
2. Document from the Compensation Office declaring if the previous owners have been compensated for the property.
3. If the property is located in an urban area, a certification from the Office for Urban Title Certification must be obtained.

** If the previous owner was compensated, then the purchase can be carried with less risk of incurring in legal conflicts due to any past expropriation that took place.
Once these items are obtained, you will need to have your lawyer review the documents and inspect them for any other issues that may arise.
In the next installment, we will look document review.