262
[BUYING & SELLING REAL ESTATE IN URUGUAY]
262
ESTABLISHING A BUSINESS ENTITY IN URUGUAY Please find below a quick summary about acquiring real estate in Uruguay. This Memorandum has three main chapters: 1) Steps for buying real estate property; and 2) Other issues to keep in mind when acquiring real
customary fine for the non-fulfilment of the terms and conditions established is the 10% of the real estate asset’s price). It is not necessary to register this document at the National Registry. At this stage, the purchaser should not pay a part of the price, but should make a 10% money deposit (this amount can vary) in his Notary’s hands, while the seller should deposit the original deeds for the property, being both guaranties of their respective obligations. The aforementioned 10% will be credited to the total price of the operation at the moment of executing the contract of sale. 1.3. Second Stage: Execution of the Contract of Sale. After signing the “Boleto”, Purchaser´s Notary will perform a Due Diligence of the last 30 years of ownership of the real estate asset as well as a review of the deeds and plans of the same, in order to confirm that both the asset and its owner are not affected by encumbrances. If the due diligence is approved and all conditions set in the Boleto de Reserva are achieved, then the final deed can be signed, the whole price is paid, and the property is transferred to the Purchaser. Only a Uruguayan Notary can authorize this transaction. When not all the price is to be paid, there is a possibility of signing a Promise of Sale (“Compromiso de Compraventa”) in which part of the price (i.e. 50%) is paid (sometimes de land is transferred at such moment). The registration of this contract does protect the future owner from eventual encumbrance.
estate property in Uruguay. 1. Steps for the acquisition. 1.1. Compliance.
Following Uruguayan legal requirements, all buyers must go through a compliance procedure which includes informing the source of the funds to be used for the acquisition. All documents provided for such purpose, will be held by the Notary in charge of the issue. However, local authorities could request such documents. In addition, Notaries are obliged to report any suspicious activity to a special office of the Uruguayan Central Bank. 1.2. First stage: Signing of a private document called “Boleto de Reserva”. Firstly, it is most common that a “Boleto de Reserva” is signed by the two parties (purchaser- seller). In this preliminary agreement, the most important terms and conditions of the deal are established (characteristics of the real estate asset, price, deadline for signing the contract of sale, fines in case of non-fulfilment). After signing this document, the Notary appointed by the purchaser can start the due diligence process that will determine if the land can be bought without any encumbrances or liens. The signing of this private document is not compulsory but recommended to allow the parties to have certain obligations (the
ILN Real Estate Group – Buying and Selling Real Estate Series
Made with FlippingBook Online newsletter