Horizontal Property Regime in Nicaragua
It’s not a secret that in recent years in Nicaragua has been made important investments in the real estate sector, whether for housing, commerce or tourism purposes. Generally, these kind of edifications are subjected to a special property regime called “horizontal property”, “horizontal and vertical property”, “condominal regime”, “condominium property”, “co-ownership special regime”, among others.
In Nicaragua, this kind of property is regulated by the Decree N° 1909 “Law that rules the Horizontal Property Regime”, published in La Gaceta, Official Journal N° 215 from September 9th of 1971; as well as by the articles 73 paragraph 1, and article 88 of the Law 698 “Public Registers General Law”, published in La Gaceta, Official Journal N° 239 from December 17th of 2009.
It is clear that the social, economic and legal reality, the globalization of the goods and services market and the speed in which the transactions are done, today are considerably far from the reality of those years.
In our years of counseling in matters related to this regime, we have detected some situations or difficulties that have emerged from the application of the current legislation. In this opportunity we will limit to point out three of them:
- There is no regulation regarding if the condominium or the owners assembly has own legal personality, or if for management purposes are susceptible of contracting rights and assuming obligations without having to register these capacities in any Public Register.
- Lack of deadlines and procedure for the delivery of temporary administration of the developer or of the owners that constitute the regime.
- Owners Assembly, convocations, minimums and maximums for the decision making.
The need of a new legislation in condominium matters obeys mainly to the lack of clarity in some aspects, starting with if the regime as such is capable of contracting rights and obligations, or the lack of regulation in topics that nowadays are necessary, such as forms, deadlines and circumstances in which it must delivered the transitional administration once the units, houses or apartments have been sold, rights and obligations of the developer and/or initial owners, in case the regime had been constituted for sale, tax matters, among others.
Thus, it is needed of a new legislation in this matter, so that it can be regulated various topics, such as the legal nature of this special regime, tax treatment, deadlines and conditions for the transitional administration, rights and obligations of the ones who participate in the regime, whether is in their quality of developers, administrators, owners, among other aspects.
Diana Navarrete Chávez
Senior Associate
García & Bodán
Nicaragua