Due diligence prior to closing on a property is crucial and the most important thing to do is to hire your own independent attorney to conduct a thorough due diligence and represent you in the purchase process.
In several of the planned developments, the attorney for the closing is already selected by the developer and associated fees have been negotiated. Despite the apparent ease in using the developers lawyer, we strongly advise buyers to hire an independent attorney.
You should choose an attorney who is familiar with the real estate concepts that you are trying to achieve. Many investors do not realize that Nicaragua operates within a civil law system, where s most of the United States and Canada operate under common law systems. The two legal systems are very different and the real estate concepts and legal rights of property owners vary between the two systems.
The most common mistake is the assumption that partners enjoy the rights of ‘joint tenancy’ when putting both of their names on the title deed at the time of closing. (Joint tenancy is the right of survivorship in which interest held by each tenant will pass to the other in the event of death.) When in reality, in Nicaragua if both owners names are on the title deed, the interest of each individual will pass to their heirs in the event of death.
Although it is possible to achieve the ownership rights associated with ‘joint tenancy’ in Nicaragua, additional legal work will be required and your attorney will need to be familiar with the foreign legal concept and your personal goals.
Also note that the documents you will be signing when you buy a property in Nicaragua will be written in Spanish, so a bilingual attorney is a must if you are not fluent. An attorney who can communicate with you by email is also an advantage.
Contact us if you would like an introduction to an attorney in San Juan del Sur.