[BUYING AND SELLING REAL ESTATE IN CHILE]
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KEY FACTS OF REAL ESTATE ACQUISITIONS UNDER CHILEAN LAW I. STANDARD FORMS OF AGREEMENTS 1. Offer to Purchase: Offer to Purchase sets forth Buyer's offer of price, date for closing, contingencies for inspections,
Seller’s obligation to pay is entirely fulfilled at the moment of the deed signing. Occasionally, the Buyer will pay a portion of the price with a loan granted by a bank or financial institution. The Seller will usually state that the Buyer's failure to obtain credit will not be considered a condition for declaring the agreement void and/or a breach of the Promise to Purchase. The parties will often agree that the purchase price will be paid through one or more bank instruments left in escrow before the notary public that authorizes the deed of sale, with instructions to deliver said documents to the Seller once the property is registered under the Buyer’s name in the competent Real Estate Registrar, with no encumbrances (except known previous encumbrances, such as Co- ownership Regulations or easements) and those warranties granted by the Buyer to guarantee payment of credits taken for the purchase (i.e., mortgages and prohibitions to sell). If the parties agree that the purchase price will be paid in installments, the Seller will usually not waive its action to terminate the contract and will not grant the Buyer settlement. Once payment is done in full, Seller will often be obliged to both waive its action to terminate and grant settlement to the Buyer’s obligation to pay. C. Form of sale and delivery: This is usually done ad corpus , which means, “in its current state .” The Buyer declares to acknowledge this situation, and that the property is free of any encumbrances and, in general, any limitation to ownership. However, for large plots, mainly rural real estate, the parties usually agree to review the property's exact surface through a
financing, etc., and date for entering into a formal purchase and sale agreement. Seller may accept, reject or counteroffer, based on the original offer. 2. Promise to Purchase: The most usual form of agreement to sell and purchase real estate is through a Promise to Purchase. The Promise to Purchase must detail the terms and conditions of a Definite purchase as thoroughly as possible, and, consequently, the Definite Purchase and Sale Agreement shall contain the same terms set forth in the Promise to Purchase. The key condition contained in the Promise to Purchase to enter into the Definite Purchase and Sale Agreement is that the titles of the property must comply and be according to law. 3. If no Promise to Purchase is entered into and/or or the titles of the property were not properly reviewed, the Buyer may agree to accept the property's titles without actually reviewing them. In this case, the parties often agree on a clause having the Buyer acknowledging this situation and waiving its action to rescind the sale. 4. The most used terms of the Promise to Purchase are: A. Description of the property: It includes the address / location, boundaries, land tax identification number, and registration number under the competent Real Estate Register. B. Price and payment form: Buyer and Seller would declare that payment is made in full by the Seller, declaring that the
ILN Real Estate Group – Buying and Selling Real Estate Series
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