Acquisition costs |
The costs of the instrument of sale and other accessories thereof are for account of the vendee.
Transfer tax: 2.0%
Agents Fees : 5% (slpit 50/50)
Legal Fees: By agreement (split 50/50) |
Property and ownership information |
Bolivia
encourages foreign investment. The 1990 Investment Law and other
legislation establish guarantees of equal treatment of foreign
companies, repatriation of profits, currency convertibility, and the
right to international arbitration. A new hydrocarbons law sharply
increases taxes on oil and gas companies and abrogates current
operating contracts. The legislation follows growing hostility to
foreign investment by radical elements who have organized repeated
strikes urging increased state control of the economy. Rights in real
property are based on civil code which originated in Roman law.
Ownership rights are guaranteed by the National Constitution. Foreign
nationals are not allowed to own property within 50 kilometers of the
national boundary except in cases of special permission by the
government. Foreign corporations and individuals doing business in
Bolivia will be subject to Bolivian Commercial Code. Provisional
possession of an absent persons property after two years of
disappearance of absentee if absentee’s heirs give a bond.
There is a national Real Property Registry. In general, all
documents transferring, creating, declaring or limiting right in real
property, including leases of five years or greater, must be recorded
in the public registry, also documents declaring bankruptcy or the
incapacity of a person, and those limiting rights to dispose of
property. Other documents may also be recorded, even if they do not
pertain to real estate.
Registrars are semi-judicial officers who, upon receiving public
instruments, may record them, ask for any corrections to be made, or
refuse them outright. After a registrars decision the only course of
appeal lies in the courts. Registrars are bonded and are appointed by
the President. |
Transaction information |
Open listings for agents are: N/A.
Exclusive listings for agents are: N/A.
Transactions are recorded in the public registry (see section
recordation and transfer of title). The transaction must be signed by
both parties and witnessed in the presence of a notary who will then
enter the transaction into the public record. |
Real estate trade association |
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License requirements |
Agency may be express or tacit if express is conferred by private instrument, a private writing or orally. |
Land description meters and bounds survey system |
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Rights and interests in land |
The
right to ownership of property on Bolivia is solidified by the transfer
of title and registration in the public record. Property may be secured
through promissory sales contract, exchange, grant, inheritance, grant
on will, and acquisitive prescription. Statutory estates are in place
in the form of either a will or intestacy statute. Rental contracts are
governed by the civil code. Government retains the right to escheat
under intestacy in the absence of heirs. State holds underlying rights
to all minerals regardless of surface title and may grant rights.
Foreign nationals may not hold mineral rights within 50 kilometers of
national border except with permission of the state.
Local rather than national real estate tax is levied by districts
to provide for such things as water and sewer and can reach .8% of
assessed value. Urban real estate is subject to taxation ranging from
.35% to 3% of assessed value.
Expropriation may be effected for reasons of public benefit or in
cases where private property does not fulfill its social purpose. All
actions of eminent domain must be authorized by law and the owner of
the property must be justly compensated. Nevertheless, legal protection
of private property in Bolivia is weak. The U.S. Department of Commerce
warns that "Property and contractual rights may be enforced in Bolivian
courts, but the legal process is time-consuming at best and at worst
subject to political influences and pervasive corruption. For that
reason, the National Chamber of Commerce—with assistance from USAID—has
established a local Arbitration Tribunal. The Investment Law provides
that investors may submit their differences to arbitration in
accordance with the constitution and international norms." |
Forms of ownership |
Foreign
ownership of property within 50 kilometers of national boundaries, is
not allowed except in the case of pre-approval due to national
interest. Community property is created upon marriage, except in the
case of property owned before the marriage of that received by
succession, legacy or donation. Expropriation (Eminent Domain) may be
effected for reasons of public benefit or if private property does not
fulfill its social purposes. Expropriation must be authorized by law
and must provide for payment of just compensation of the owner. Rights
are exercised by prescription when they are not exercised during the
period of time established by law. Prescriptive period begins at the
time right can be enforced or at the time exercise thereof has ceased.
Prescriptive period in which rights can be enforced varies according to
the nature of the obligation. Property purchased after marriage is
considered Community Property. Both spouses administer community
property. Community Property is dissolved after death of one spouse,
divorce, separation and judicial separation of property. |
Transfer of title |
Title
to property and property rights may be transferred either by public or
private instrument. The American system of acknowledgments is not
followed. Transfers of title to property must be a public instrument.
It must contain a true statement of considerations, be recorded in the
registry of property, and be signed by both the grantor and grantee
(attorney in fact will suffice) in the presence of a notary. Formal
documents must be executed before a notary who intervenes in the
contract and retains the original certifying copy.
Transfers of title to real estate can be by public or private
instrument and must contain a statement of true consideration. They
must be recorded in registries of property. Both grantor and grantee
must sign the deed and therefore must both be present before the notary
at the same time. If one is absent, he must be represented by attorney
in fact. In Bolivia, original deeds stay in the files of the Bolivian
notary who witnessed the signatures. Notary gives the interested
parties certified copies which are the same as originals in a court.
After death, property is passed via a testamentary document (will),
or by operation of law. Operation of law in Bolivia states that when a
person dies intestate, property passes in the following order: to
descendants, ascendants, spouse, collateral kinsmen, and state.
"Proprietary Equity" is lost if the right to enforce it is not exercised within five years. |
Recordation and transfer of title |
The
Registries of Property was created by law November, 15 1887; Decree 5,
1888. In general, all documents transferring, creating, declaring or
limiting rights in real property, including leases for over five years
must be recorded in the public registry. Registrars are semi-judicial
officers who transcribe the essential details of the transfer. Records
contained in the registry are considered legally binding on future
transactions. Defects found within a period of one year are allowed to
be cured. Redress for the decisions of registrars is had via the
courts.
Sales of real property must be recorded. The cost of recordation is
the responsibility of the buyer. If, after sale of the property and
within two years, it is discovered that the buyer paid less than half
of the market value for the property, the seller may move for
rescission of the transaction, making the original transaction void. In
such cases, the buyer may elect to pay the difference in price to avoid
rescission. |
Contracts |
Nature,
form, objects and obligations concerning contracts are generally
governed by Civil Code. Civil Code defines a contract as an agreement
by which one or more persons bind themselves to another person or
persons to give, to do, or not to do, something. Essential elements are
the consent of the parties to contract, an object, cause, and
satisfaction of formalities which may be required. Only those persons
with legal capacity may enter into contracts. Civil Code specifies
which contracts must be formalized. (i.e., marriages, gifts mortgages,
and company formation). Under Bolivian Commercial Code, contracts are
designated as either commercial or non-commercial . A commercial
contract is defined as any contract that is between merchants. In the
sales of real estate, rescission may be asked by the vendor within two
years if it is found that the price received is less that one half of
the value of the property. However, buyer can avoid rescission by
paying the difference in price. |
Mortgages |
Mortgages
may be legal, judicial, or voluntary. They can affect any private real
property, regardless of what is affixed thereto including moveable
assets. Mortgage must state clearly the object and amount it secures.
Property located in Bolivia can be mortgaged outside of the country. A
lien may be established based upon the unpaid purchase price of any
real property.
Judgments constitute a lien on real property after they have been
recorded in the public registry. Once an order of execution has been
issued on real property, the court designates a day for foreclosure
sale. The sale is made on the basis of the appraised value of the
property and bids cannot be accepted for less than three-fourths of
that value. If no bidders express interest at the time of sale, the
appraised value is reduced by 10% and a new call for bids is issued.
After three reductions in value, the creditor may purchase the property
at 80% of its final value or hold the property in pledge subject to
further bidding or until a buyer offers 80% of the final reduced value.
There is no right of redemption. |
Financing and lending practices |
Legal
rate of interest is 6% but parties may agree on any rate. Additionally,
various rates are prescribed for various lending institutions and
specialized banks. Interests on bank loans or discounts may not exceed
15% per year, commission on additional services not being permissible. |
Property taxes |
Real Estate and Vehicle Tax:
All artificial or natural persons and undivided successions, owners
of real estate and registered vehicles, yachts and aircrafts.
The taxable base on real estate, is determined by the fiscal evaluation carried out in each municipal jurisdiction.
The taxable base on vehicles, is determined by the post-customs
value of the vehicle as determined by the State and its yearly
devaluation.
Local rather than national taxes are levied varying with the
region. These include sewage, water and other rates tax can reach 8 per
mil of assessed value.
All urban real property is subject to tax ranging from .35% to 1.5 % of fiscal value . |
Closing and escrows |
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Appraisal |
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Insurance |
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Land use control |
Expropriation
is applicable if land is not being used for greatest public value. The
government owns all mineral interests but may assign them. Foreign
nationals are not allowed to own land within 50 km of the border
without special permission of the government. |
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