Investment in Nicaragua real estate has grown exponentially over the past several years. U.S. investors looking for the best returns on their investment have been looking to countries classified as developing countries. Nicaragua is one such country that is experiencing a vibrant economy, thanks to a stable government with a pro-business agenda. As an enticement to attract investors with hard currency, many Central American countries are providing a whole host of economic incentives. In Nicaragua, investors and pensioners who meet a minimum age and income requirement are permitted to ship household goods, including a vehicle, as well as start up business supplies into the country, duty-free.
Over the last decade, many foreign investors, including several European hotel developers, have purchased large tracts of land in Nicaragua, which has prompted smaller investors to follow suit.
For the average investor, buying land in Nicaragua is a complicated and trying process. Prior to the establishment of the current government, most of the privately owned lands were seized and redistributed. Fortunately, the democratically elected government has begun returning the land to their legitimate owners. While most of the land issues have been resolved, there are still pockets of properties that continue to be contested.
It is important that investors deal only with local, reputable real estate professionals and lawyers, who are familiar with the specifics of property ownership. While the documents themselves are not dissimilar from land ownership related documents used in the U.S., the process of obtaining, and verifying them is time consuming, as most of the fact checking is done in person.
The primary document certifying land ownership is the escratura, which must be certified by an expert, who will examine it for forgery and tampering, and assurance that the seal is intact, indicating that the document has been properly registered. A second document is the plano, or a geographical plat of the property, the dimensions of which should be confirmed by a surveyor; this should also have been properly registered. The final document is the Libertad de Graveman, which is obtained from the Registro Publico and which affirms whether or not there are any liens, judgments debts or taxes owed on the property.
While buying real estate in any developing country is risky, an investor can minimize those risks through due diligence. The U.S. Embassy in Managua advises investors to exercise caution when buying property in Nicaragua, and to be aware that property disputes fall under the jurisdiction of Nicaraguan courts.
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