Ever since the Sandinistas were voted out of power in 1990, land redistribution has been a problem, with Nicaraguans fighting over ownership and compensation. Property buying laws are therefore difficult in Nicaragua, and as a foreigner it isn’t particularly advisable to purchase land or property but to rent a house long term.
If you are still convinced about buying for your own use or investment reasons you should read our tips to make it as hassle-free as possible.
Be cautious
Nicaraguan land ownership is a complicated and fear-inducing subject. Many foreigners in the past have been scammed, the most common reasons being multiple property deeds. When buying land in Nicaragua, be aware of the average buying price. If it seems too good to be true, it probably is. Make sure you consult two or three good and honest lawyers.
If you are buying land for appreciation, be careful. The infrastructure of Nicaragua's countryside is filled with empty overgrown lots, half-built resorts and abandoned houses. These are mostly the ghosts left behind by foreigners who looked to invest in a fast-growing market, expecting a spike in prices or a tourism boom, only to be left disappointed. Legal complications also exhausted some investors into giving up and returning to their domestic country.
Legal aspects
Make sure that the transaction is completely legal to avoid going to court. Foreigners do not enjoy the same privileges as Nicaraguans, and even if you do have the legal right to something there is a high probability that the police and government won't care.
Before starting the purchase process, the legal process must begin with your lawyer checking essential information on the house, such as mortgages, pending legal cases and the name of the real owner. The seller should provide:
- land registry certificate
- land registry survey
- power of attorney
- tax ID number
If all the information is correct the buying process will start. The buyer and seller must agree on the final price and a non refundable deposit of 5%-15% is paid to the seller and the closing date is scheduled. Your lawyer is now responsible to take the appropriate steps to have the property registered in your name. Once done you are the legal owner of the property.