Blog by Patricia Houlihan - Personal Real Estate Corporation

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So if I want to buy outside of Vancouver, how do I minimize the risks?

Well it depends on where you are buying-in most developed countries, we would connect you to a reputable agent there to assist you.  If you are looking at Nicaragua-well it's the wild west of real estate so I think you need to be more aware and do your own due diligence.  As I have told a few of my friends who bought down in Nicaragua with me, they cannot rely on me for any comfort as the risk level of buying there and that any information I pass on to them is what I have been told but there are no guarantees.  Since they are all lawyers, in this case we hired a lawyer from what is reputed to be the best law firm not only in Nicaragua but in all of Central America....well I can tell you that when the "legal opinion" we received quoted the Miami Herald, we  became very skeptical of the reliability of any advice we were receiving.  Fortunately we had also received advice from another lawyer there (the sellers lawyer) and had spoken to some other Canadians who had all been told similar things by their Nicaraguan lawyers so we decided to take the risk, pay up and pray!

 

You can do a few things to minimize the risks-there are long lists on the internet but 2 key points in my opinion are:

-see if the project has title insurance; if you are getting title insurance, that should give you a better level of protection (having said that, we bought without it but with assurances that it is on the way).  Title is very complicated in Nicaragua due to confiscations of land that occurred during the civil strife 20+ years ago.  Many of these issues have been resolved; others remain outstanding.

-if more than 5 units/properties are being sold and the project is being marketed in British Columbia, see if the developer has filed a Disclosure Statement and if so, make sure you receive a copy (ok-yes we did buy without this but only because they had filed and had it rejected so it is being resubmitted)

-a new requirement for title transfer is the receipt of a Letter of no Objection....check to see if this document has been obtained for the project (again, our properties do not yet have this but an application has been made to receive it)

-if you are buying on the Coastline, check the status of the proposed Coastal law: this draft law was not passed during this sitting of the Nicaraguan legislature; however it is expected to be reintroduced either in the fall of 2008 or the spring of 2009.  This law will affect ownership and buildability on coastal properties.

And of course, talk to people who know the country better than you do; hire a lawyer (although don't assume that will protect you to the same extent it will here) and don't spend more than you can afford on foreign investment!  Other than that, enjoy!

 

Patricia 

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