One buying and selling is a transaction in which one person sells and another person buys. When it is a "real estate property" such as a house, building, apartment or farm, it is mandatory to prepare a deed. The deed is a document made by a lawyer commissioned as notary which includes all the clauses required by law. It is more complete than just an affidavit.
1. Title Study
Firstly, prior to any transfer of real estate, a title search must be carried out. This document is prepared by a title searcher and reflects information from the Property Registry. It is essential to emphasise that only the names shown as the current owners can transfer the property.
The title search will show any liens on the property, such as a mortgage. If the mortgage has been paid off, it is important that a Mortgage Cancellation is made prior to the sale.
If one of the owners has died, then the property must first have been transferred in the name of the heirs. This is essential and must be done prior to the sale. An inheritance can take several months. For more information, go to our summary on Transfer of Inheritance.
In case you need to pre-check who the property belongs to, you can go to our link on Property Search.
2. Treasury Department
It is important to note that if the seller is a non-resident of Puerto Rico, the Treasury Department will withhold fifteen percent (15%) of the purchase price. However, this withholding may be removed, through a process, if it is shown that there was a loss on the sales price.
On the other hand, after granting the deed of sale, the notary must submit to the Treasury Department an Form Informative on Transfer of Real Estate.
3. Property Registry
It is essential that all transfers of real estate are filed with the Property Registry. This is normally done by the lawyer and involves the payment of fees which are calculated according to a formula based on the value of the transaction.
4. Transfer to CRIM
The last step is to report the change of ownership to the Municipal Revenue Collection Centre (CRIM). This is the agency in charge of property taxes.
5. Safe Home
If the purchaser wishes to live in the property as his or her primary residence, he or she can take advantage of and designate it with the protection of Safe Home.
The cost of the deed of sale will depend on the steps to be taken, as detailed above, and the sale price. Incidentally, unless otherwise agreed, the legal fees are supposed to be paid by the seller, as he is the one who receives the money. selleras he is the one who receives the money. The buyer, on the other hand, will have to pay the costs of registration in the Property Registry.
Finally, if you or the other party cannot be present in Puerto Rico, it is possible to prepare a Power of Attorney so that someone here can represent you.
The transfer of a real estate property is a matter that can be tedious because of the importance involved. However, at Abogado Notario Online we take care of the whole process in the most comfortable and easy way possible.