Ownership records can be determined from the Office of Registry of Property. Recording is made in the Office of Registry of Property which covers immovable property (real estate) affected; and, if covered by more than one office, in all offices covering immovable property. Place of residence of the parties does not affect place of recording. Each immovable property is individually identified with a number.
Information is available on immovable property through a Multiple Listing Service.
Coldwell Banker (809) 720-5033
Isla Del Coqui
San Juan, Puerto Rico
Tiri Realty (809) 722-6363
San Juan, Puerto Rico
When any person is absent from or resides outside of Puerto Rico, without leaving attorney-in-fact or administrator for his property, appropriate Part of Court of First Instance may appoint an administrator to represent him and to administer his property, preferring a spouse or presumed heirs. Immovable property so held may only be administered and may not be sold or encumbered. If spouse does not insist on continuance of conjugal partnership, presumed heirs may obtain provisional possession of such property upon expiration of five years from disappearance if absentee left no representative, and upon expiration of seven years if representative was left. These terms may be shortened if evidence offered from which presumption can be drawn that absentee is deceased. Presumed heirs with such provisional possession may not sell or encumber such property, but Court of First Instance may, for cause authorize sale of movable property or undivided interests in immovable property. Absence for 15 years from commencement of provisional possession, or 90 years from birth date of absentee is sufficient to support declaration of presumed death.
Upon showing to Court of First Instance of absence for ten years and nonexistence of heirs in Puerto Rico, a court may order sale of absentee’s property and delivery of proceeds to Secretary of Treasure of Commonwealth.
Easements may not be acquired by lapse of time except easements, which are both continuous and apparent, which may be acquired by an adverse user for 20 years. Continuous easements are those in which use is or may be uninterrupted, without intervention of human act, and apparent easements are those continually indicated by external signs revealing use and benefit thereof.
The estate of a decedent who leaves no heirs escheats to the government.
Real property is a term unknown in Puerto Rico law except as inaccurate translation of Spanish "immueble" (immovable). Dominion title (dominio) roughly equivalent to fee simple, which is the maximum possible estate or right of ownership of real property, continuing forever. Only part of the decedent’s estate may be disposed of freely by will; a certain portion goes to the heirs by operation of law (forced heirs - "herederos forzosos"), the amount of such portion depending upon the degree of relationship between the decedent and the heirs. The portions pertaining to such forced heirs are called "legal portions" ("legitimas") Forced heirs are children and descendants, including natural children and illegitimate children, or if there are none, parents and ascendants, also surviving spouse. Legal portion pertaining to children is two-thirds of estate, in one of these thirds they have equal shares, other may be distributed among them as testator desires. One third of the estate not pertaining to children may be disposed of freely by testator. If there are no children, legal portion of surviving parents is one-half of estate. Surviving spouse has, in addition, to one half of all marriage partnership property, a life interest in a portion of estate which varies according to whether there are one or more children or no children. In case there is more than one child, life estate comprises a portion equivalent to the smallest portion which any of their children could inherit. If there are neither legitimate descendants nor ascendants, the surviving spouse is entitled to one-half of estate in usufruct. Leases may be in any form, written or verbal, and are binding between parties. In lease of urban property where the term is not fixed, it is understood for years, when annual rent is stipulated; for months when rent is monthly; and for days when it is daily. Tenancy subject to Reasonable Rents Act (17-181) may be terminated by lessor except upon grounds set forth in statute or added by case law. Otherwise, termination permitted upon expiration of contract: default in payment of rent; breach of lease contract; misuse of premises. Real estate leases are governed by Civil Code.
Rules applicable to property acquired by descent and distribution and property held in common are essentially the same. No one is obliged to remain as an owner in common and contracts stipulating for a maintenance of co-ownership are valid for not longer than ten years, without prejudice to a right to extend same for like period. Statutes contemplate, where possible, division by mutual agreement without judicial intervention, except so far as necessary to protect interest of minors or pursuant to special provisions of law relating to liquidation of property passing by descent and distribution. Jurisdiction is in the Court of First Instance.
Partnership:
In general the term "partnership" is misleading, translation of Spanish word "sociedad". Civil Law "sociedad" is a juridical entity separate from partners forming same. Assumption that common law partnership is the same as civil law "sociedad" misleading. There are no special formalities for the formation of a partnership, except when an agreement is to be recorded or a partnership owns or will own immovable property, formation must be by public deed. Registration is not required, but mercantile partnerships and limited partners, do not, as to third persons, enjoy protection of partnership contract unless same recorded in Mercantile Registry.
Foreign partnerships:
Foreign partnerships may engage in business in Puerto Rico without formal registration, but persons dealing therewith are not bound by limitations in a partnership contract unless same is filed in the Mercantile Registry.
Joint Tenancy is an unknown term in Puerto Rico.
Tenancy by Entirety is an unknown term in Puerto Rico.
Title & Contracts in Puerto Rico
Puerto Rico’s practice as to deeds differs sharply from common law practice. The notarial system used in Puerto Rico is similar to that in other Latin American jurisdictions.
Title to immovable property may be acquired through public, peaceful, and uninterrupted possession in capacity of an owner. The prescriptive period as to persons present is ten years and as to absent persons is 20 years, with good faith and proper title, and 30 years without title or good faith and without distinction between present and absent persons.
The Torrens Act is not in effect in Puerto Rico
There is one Central Registry composed of 27 sections, each section covering territorial demarcation. Under the jurisdiction of the Secretary of Justice. Records related to realty are recorded in the Registry of Property. Only essential details of documents are transcribed into Registry records. Each immovable property is individually identified with number. Unrecorded immovable property may be recorded by special proceedings.
Recordable Instruments are those which meet the following six requirements: (1) Constitute, convey, declare or extinguish rights over immovable property or with effect over immovable property, including those which modify rights of domain or inherent to rights over immovable property; (2) adjudicate rights over immovable property; (3) lease and sublease, when lease is for term of six years or longer or, if for shorter term, where parties expressly agree to recordation; (4) grant option to purchase immovable property, for period not exceeding five years, except in leases with option to purchase where option is recordable for term of lease; (5) grant right to repurchase realty at same price; and (6) involving hereditary rights, judgments declaring legal incapacity or other conditions affecting legal capacity with regard to disposition or administration of immovable property, attachments of immovable property and judgments and court orders with respect to filing of judicial action affecting immovable property or rights over immovable property. Chattel mortgages, factor’s liens and assignments or accounts receivable are also recordable in Registry of Property.
Place of Recording:
Filing in correct Registry Section is essential.
Upon filing, Registry officials review documents for legal form, statutory requirements and legal capacity of parties. Registrar’s objections to record are notified. A 20 - day period is allowed to request reconsideration. Administrative appeal lies to Supreme Court. If no appeal is taken, a 60 day period is allowed to cure defects. If defects are not timely cured, registration will be denied, priority is lost and $50 in registry fees canceled. Only owner of record may consent to recordation affecting immovable property.
Registrars are quasi-judicial officers. Appointed by the Governor with consent of the Senate. A registrar must be an attorney with five years experience. The Administrative Director is selected among Registrars and appointed by the Secretary of Justice.
Effect of Record:
Documents filed in Registry constitute notice to third parties from date of filing.
The partition and division of decedent’s estate is made according to will and/or the laws of succession,and the court order containing all requisites necessary for recordation is filed in the Registry of Property, if immovable property involved.
Contracts of sale, whether of real or personal property, are subject to general provisions of law relating to contracts and public instruments, and to special rules provided in civil and commercial codes. By acontract of purchase and sale one party agrees to deliver a specified thing and the other to pay a specified price in money or otherwise. Sale is perfected and binding on vendor and vendee if they have agreed upon things sold and upon price thereof, though neither has been delivered. Determination of price cannot be left to the judgment of one of the parties. If a sale is made by notarial instrument, expense of execution of instrument is for account of vendor, and cost of first copy and other expenses subsequent to sale are chargeable to vendee, unless agreed otherwise. Sales of real property must be recorded for validity against third parties.
Concept of "consideration" is covered by concept of "cause", which means giving or promising to give a valuable thing. When a contract of purchase and sale is accompanied by earnest money, either party may rescind; vendee on forfeiture of earnest money, and vendor on payment to vendee of double amount of earnest money. Offers may be withdrawn at any time before acceptance. Acceptance by letter is not binding on offeror until it comes to his knowledge. The following sales of real estate with provision of reversion are deemed mortgages; (1) when the vendee fails to take possession of the property sold, (2) when the vendor pays the vendee interest on the selling price, though such interest be called rental, (3) when a grossly inadequate sum appears as the price of sale.
Unless there is stipulation to the contrary, vendor warrants to vendee: (a) legal and peaceful possession of thing sold, provided that vendee notifies him promptly of institution of suit against vendee, and (b) that there are no hidden defects therein.
Property Taxes:
All property not expressly exempted is subject to annual ad valorem tax, that is a tax levied according to value, generally used to refer to real estate tax. Some notable real property tax exemptions include: homestead, land that is owned and occupied as the family home, provided total property of claimant is not assessed at more than $3,500; property of U. S. and property exempt from taxation by laws of U. S.; property of Commonwealth of Puerto Rico or of any municipal district thereof, and property of Conservation Trust of Puerto Rico. Additionally, each homeowner is entitled to exemption of the first $15,000 of value of the house used as his residence and exemptions are available for land devoted to agricultural use.
Assessment of real property is made as of its status and condition on January 1, of each year. Tax on real property is assessed by the appropriate Assessment and collection district. Assessment, once made, remains in effect until revised by a committee of Administrative Review.
Property is taxed both by Commonwealth and by municipality in which the property is located. Municipality rates vary and, as a result, total combined rate ranges from $4.04 to $8.33 per $100 of reported value of personal property and from $6.04 to $8.33 of assessed value on real property. Taxes on real property are due semiannually, in advance, on July 1 and January 1, each year.
Mortgage on immovable property is lien thereon. Mortgage with no recourse to mortgagor available. May be constituted to secure direct obligation or mortgage note payable to mortgagee or to bearer. If constituted to secure direct obligation or mortgage note payable to mortgagee, formal acceptance of lien by mortgagee and recordation of acceptance is essential. Title to mortgaged property remains with mortgagor.
Mortgages are executed by deed and recorded. Priority of liens is determined by hour and date of filing, subject to party claiming priority being third party. Third party defined as acting in good faith, for value, and without notice. Release of lien where lien is over one single property, partial release only by segregation and with consent of mortgagee. Where lien is over two or more properties, lien responsibility for each property must be stated in mortgage and mortgagor is entitled to release of one or more properties when amount equal to a lien responsibility has been satisfied. Upon satisfaction, deed of cancellation is required. If a lien constituted to secure mortgage note, holder discharges duty by endorsement and delivery of mortgage note to mortgagor. If constituted to secure direct obligations, mortgagee must execute deed of cancellation.
Summary proceedings are available, essentially ex parte. Court decisions under prior law declaring summary proceedings are void for minor errors and defects and have resulted in abandonment of summary proceedings. Foreclosure is generally made by ordinary proceedings, similar to foreclosure in equity. Foreclosure sales by public auction, with statutory and judicial notice requirements. Mortgagee may bid in foreclosure sales. There are no statutory rights for redemption.
Deficiency judgments are allowed, usual and enforceable for balance of principal and interest, except for non-recourse mortgage. There is no Commonwealth law on moratorium, U. S. Bankruptcy Law is applicable.
There are both primary and secondary mortgage markets. In the primary mortgage market, loans are originated and consist of lenders such as commercial banks, savings and loan associations and mutual savings banks. A secondary mortgage market for the purchase and sale of existing mortgages, designed to provide greater liquidity for mortgages. Various types of loans are available including, mortgage, commercial, and personal loans.
Administaror