What are the main steps in buying a property in Nicaragua?
When purchasing a property in Nicaragua you will need the services of a qualified attorney. The steps that will be taken by your attorney during the purchasing process are set out below.
Step 1: Legal due diligence
Once the agreement to buy has been made and you have signed a contract of sale, the
process of legal due diligence will begin and your attorney will check the following:
- Escritura (or Title Deed). This document should be in the name of the current owner
of the property and be duly registered. Any irregularities with this document can point
up areas for the lawyer to check in more depth;
- Libertad de Gravaman (or Free of Lien). This document shows if the property has any
issues that might prevent or affect a legal sale of the property (such as previous
promises of sale, mortgages, pending legal cases etc.);
- Solvencia Municipal. This document shows the state of taxes on the property and
lets the lawyer know whether all taxes have been paid up to date;
- Property History - This will be checked in order to determine if there are issues in the history of the property that need further investigation. This is to be sure that there are no previous or current legal or title issues with the property that might affect your ownership (such as rights of access granted, property donation issues etc);
- Property Survey - Your attorney should request a current survey to confirm the size and boundaries of the property;
- Any additional terms and conditions of the contract of sale including Codes Covenants and Restrictions (CC&Rs) and Horizontal Property Regimes (HPR) for applicable properties.
Step 2: Closing
Once your attorney has checked these papers and assuming that the property has been
cleared for sale a number of further steps will be taken:
- A new Escritura (or Title Deed) will be drawn up by your lawyer showing you as
the new owner.
- The seller of the property and the buyer of the property (or person with power of
attorney for either party) will sign the new Escritura, witnessed by your lawyer.
- At the same time the funds for the purchase of the property will be transferred
from the buyer to the seller.
Step 3: Post closing
Following the closing your attorney will take the necessary steps to have the property
registered in your name. The Cadastral Office (which holds the land plans) will evaluate
the property to come up with the 'assessed value'. The assessed value forms the basis against which taxes are paid. Click here for more information on typical closing costs.
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