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

First of all, a "title search" must be performed prior to any transfer of real estate. This document is prepared by a title searcher and reflects the information that emerges from the Property Registry. It is essential to emphasize that the names that appear as the current owners are the only ones that can transfer the property.

The title search will show any encumbrances on the property, such as a mortgage or a lien. If the mortgage has been paid off, it is important that prior to the purchase and sale, the Mortgage Cancellation is carried out.

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. CRIM

Before a sale or purchase, it is essential to know the property tax statement. The agency in charge is the Municipal Revenue Collection Center (CRIM). For this, we as lawyers can obtain the following 2 essential certifications: (1) Certification of Value, and, (2) Certification of Debt.

The Certification of Value will indicate, when the property is used as a home, if it has a principal residence exemption. It is important to note that this exemption will be lost once the owner dies (unless his family continues to reside there), or if the property is moved or rented.

Once the sale is completed, the Change of Ownership must be reported to the CRIM, which we, as a lawyer, also take care of.

5. Homestead

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 Homestead.

Legal Costs

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.

Conclusion

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.