Conveyance of real property in order to be recorded at Registry of Property may be done in public instrument or private document which must contain a true statement of consideration since tax on transfers is based on real consideration. In public instrument both grantor and grantee must sign and be present before a notary at the same time in person or by attorney-in-fact. Notary retains the original of document and delivers a certified copy to the interested parties which for all intents and purposes is the same as an original in courts of law. Transference of title can also be accomplished by documents drawn outside of Chile but must first be reviewed and authenticated by a Chilean consul or diplomatic agent. Documents in use are Mortgage Deeds and Bargain and Sale Deeds.
Against a title recorded in the registry of property the adverse possession period does not run except by virtue of another recorded title.
Title to personal property may be transferred either by public or private instrument. Conveyance of title after death can only be attained via written will or by court action. Adverse Possession exists after 10 years of continuous uncontested use.
The following must be recorded in the registry of properties: documents conveying or declaring the ownership of real estate and real rights; documents constituting, conveying, modifying or renouncing rights of usufruct, mortgage and certain other rights in real estate; and judgments declaring the ownership of real property. Until such documents are presented for record the tradition of the property is not deemed affected. Other documents relating to real property or rights therein, such as leases, attachments, etc., may be recorded so as to constitute notice to third parties.
The Registry of Properties was created by the real property regulations of June 24, 1857; fees decree 254 of May 20, 1931 as amended; C Com arts 20, 21; commercial registry regulations of August 1, 1866; Civil registry law 4808 of January 31, 1930 amended and its regulations D.F.L. 2128 of August 1, 1930. It mandates that all transactions having to do with real estate or real estate transactions must be recorded in the form of a public instrument. A public instrument is one written by a notary in his protocol book from which he issues certified copies. Contracts and deeds require authentication by a notary and are kept by in the office of the notary as official documents. Deeds executed in Chile must remain with the notary who executed the instrument. The Notary will then give a copy to the title holder. This copy will serve as a legal title in a court of law.
Titles are publicly registered at the national Registry of Property, which provides a chain of title abstracts and marketability of title.
A sale of real property and rights is not perfect until a public instrument is executed (See Sec. 8.8.). In private sales of real property, rescission may be asked within four years by the vendor if it is found that the price received is less than one-half the just value of the property, and by the buyer if the value is less than one-half the price paid. If a sale of real property is made at a certain price for a unit of area, the vendor must, if the area is found to be less than that stipulated, make up the difference or refund part of the price paid; if the area is found greater, the buyer must pay more; but in either cases if the difference exceeds 10% the sale may be annulled.
A sale is completed and binding when the vendor and vendee have agreed upon the thing sold and the price, and the price thereof. In the case of real property the sale is only completed when the property is registered.
Contracts for the sale of real property or for an interest in real property must be in writing. There are three essential elements of a contract in Chile. They are all parties to the contract must be legally competent, there must be mutual agreement or "a meeting of the minds."- a mutual willingness to enter into a contract, and the contract must be supported by consideration, i.e., something of value, be it money, a promise, property or services.
Real property listing and sales contracts must be drawn by an attorney or Notary. However, form contracts for leases can be used and notarized.
Property Taxes:
A single rate 20 per mil of assessed value of real property as overall national and municipal territorial taxes, including charges for public light, pavement of streets and certain municipal loan services was established in 1969. Value assessments are made every five years or more and at least once every ten years. General assessment as well as individual assessments may be made also.
Real estate taxes are payable in four installments due in April, June, September, and November, calculated on the valuation in force at the time of payment.
Law 17235 of November 10, 1969 as amended, established a single rate of 13.5 per mil of assessed value of real property as overall national and municipal territorial taxes. Value assessments are made every five years or more, and at least once every ten years. Property of less than the legal amount is usually exempted. Real estate in regard to agricultural activities is taxed at a rate of 4% to 10% according to approximate value while other real estate is taxed at flat rate of 7%. State tax on the transfer of title is based on the real consideration involved. The tax must be paid at the time the title is executed before the notary or, if executed outside of Chile, when it is authenticated in Chile. Value-added taxes are due on any real estate transaction.
The closing procedure is regulated by law and closing takes place typically 60 days after the contract of sale.
Land Use & Control:
There are controls on how a parcel of real estate may be used. Zoning is used to control growth and to separate land uses that are incompatible. In addition, public subdivision regulations exist to control how land can be converted into buildable lots. Covenants and deed restrictions do not exist in Chile.
Administaror