Real estate in Puerto Rico: Difference between revisions
m quick add |
m →Real estate mortgages: property |
||
| Line 85: | Line 85: | ||
==Real estate mortgages== |
==Real estate mortgages== |
||
In recent years, many economists have recognized that the lack of effective real estate laws can be a significant barrier to investment in many developing countries. In most societies, rich and poor, a significant fraction of the total wealth is in the form of land and buildings. In most advanced economies, the main source of capital used by individuals and small companies to purchase and improve land and buildings is [[mortgage loan]]s (or other instruments). These are loans for which the real property itself constitutes [[Collateral (finance)|collateral]]. Banks are willing to make such loans at favorable rates in large part because, if the borrower does not make payments, the lender can [[foreclosure|foreclose]] by filing a court action which allows them to take back the property and sell it to get their money back. For investors, profitability can be enhanced by using an [[off plan]] or pre-construction strategy to purchase at a lower price which is often the case in the pre-construction phase of development. But in many developing countries there is no effective means by which a lender could foreclose, so the mortgage loan industry, as such, either does not exist at all or is only available to members of privileged social classes.<ref name="New York Times">{{cite journal | author = Dash, Eric | url = http://www.nytimes.com/2010/04/30/business/30fdic.html?_r=1 | title = Puerto Rican Lenders Face Their Own Crisis| journal = [[New York Times]] | date = 2010-04-29 | accessdate = 2010-07-13 }}</ref> |
In recent years, many economists have recognized that the lack of effective real estate laws can be a significant barrier to investment in many developing countries. In most societies, rich and poor, a significant fraction of the total wealth is in the form of land and buildings. In most advanced economies, the main source of capital used by individuals and small companies to purchase and improve land and buildings is [[mortgage loan]]s (or other instruments). These are loans for which the real property itself constitutes [[Collateral (finance)|collateral]]. Banks are willing to make such loans at favorable rates in large part because, if the borrower does not make payments, the lender can [[foreclosure|foreclose]] by filing a court action which allows them to take back the property and sell it to get their money back. For investors, profitability can be enhanced by using an [[off plan]] or pre-construction strategy to purchase at a lower price which is often the case in the pre-construction phase of development. But in many developing countries there is no effective means by which a lender could foreclose, so the mortgage loan industry, as such, either does not exist at all or is only available to members of privileged social classes.<ref name="New York Times">{{cite journal | author = Dash, Eric | url = http://www.nytimes.com/2010/04/30/business/30fdic.html?_r=1 | title = Puerto Rican Lenders Face Their Own Crisis| journal = [[New York Times]] | date = 2010-04-29 | accessdate = 2010-07-13 }}</ref> |
||
[[File:Horizontal Law (1).jpg|thumb|right|'''Horizontal Law''' (Godreau)]] |
[[File:Horizontal Law (1).jpg|thumb|right|'''Horizontal Property Law''' (Godreau)]] |
||
==Regulations of 1997== |
==Regulations of 1997== |
||
''The four (4) [[dalet]] regulations'' of [[April 3]], [[1997]] established under the [[Pedro Rosselló|Roselló Administration]]: |
''The four (4) [[dalet]] regulations'' of [[April 3]], [[1997]] established under the [[Pedro Rosselló|Roselló Administration]]: |
||
Revision as of 09:28, 29 July 2010
| Property law |
|---|
 |
| Part of the common law series |
| Types |
| Acquisition |
| Estates in land |
| Conveyancing |
| Future use control |
| Nonpossessory interest |
| Related topics |
| Other common law areas |
|
Higher category: Law and Common law |
See also Immovable and Real property.
Puerto Rico's real estate industry trails behind the long-established aphorism of triple-Ls. The island’s name (rich port), describes its contemporary multicultural marketing mix (or documented endowment) established thirty-three (33) years after the conclusion of the American Civil War.
Preamble
In 1935, United States President Franklin D. Roosevelt launched the Puerto Rican Reconstruction Administration, which provided agricultural development, public works, and electrification of the island. In 1948, a series of projects established manufacturing as the main industry. Since the Great Depression there has been external investment in capital-intensive industry such as petrochemicals, pharmaceuticals, and technology. With the signing of the North American Free Trade Agreement and the Dominican Republic–Central America Free Trade Agreement, Puerto Rico lost a trade advantage over some Latin American countries as the right to duty-free imports to the U.S. market were expanded. Puerto Rico is also subject to the minimum wage laws of the United States, which gives lower-wage countries such as Mexico and the Dominican Republic an economic advantage in real estate.
- Post-Foraker Act of 1900
- see also Blanton Winship as benchmark
- see also William D. Leahy as benchmark
- see also Rexford Tugwell as benchmark
- Operation Bootstrap of 1948
- see also African immigration to Puerto Rico
- see also Jewish immigration to Puerto Rico
- see also Dominican immigration to Puerto Rico
- see also Corsican immigration to Puerto Rico
- see also Irish immigration to Puerto Rico
- see also German immigration to Puerto Rico
- see also French immigration to Puerto Rico
- September Attacks of 2001
- see also Puerto Rico 2011 as benchmark
Foraker Act of 1900
The Foraker Act, officially the Organic Act of 1900, is a United States federal law that established civilian (limited popular) government on the island of Puerto Rico, which had been newly acquired by the United States as a result of the Spanish–American War. Section VII of the Foraker Act also established Puerto Rican citizenship.[1] President William McKinley signed the act on April 12, 1900, two (2) years after the Treaty of Paris.[2][3]
Governmental grants
Subsidies (or subsidios) - a sum of capital granted by the government to assist an industry or business, such is the case of Real Estate in Puerto Rico, under Article II of the LAW 47 (Ley 47) of June 26, 1987.
Bankhead–Jones Farm Tenant Act of 1937
The Bankhead-Jones Farm Tenant Act of 1937 (P.L. 75-210) authorized acquisition by the federal government of damaged lands to rehabilitate and use them for various purposes. Both the Forest Service and the Bureau of Land Management manage some Bankhead-Jones lands. Some Forest Service Bankhead-Jones lands are National Grasslands.[4]
Consolidated Farm and Rural Development Act of 1961
The Consolidated Farm and Rural Development Act of 1961 (P.L. 87-128) authorized a major expansion of USDA lending activities, which at the time were administered by Farmers Home Administration (FmHA), but now through the Farm Service Agency. The legislation was originally enacted as the Consolidated Farmers Home Administration Act of 1961.
In 1972, this title was changed to the Consolidated Farm and Rural Development Act, and is often referred to as the Con Act. The Con Act, as amended, currently serves as the authorizing statute for USDA’s agricultural and rural development lending programs. Titles in the Act include current authority for the following three major FSA farm loan programs: farm ownership, farm operating and emergency disaster loans. Title III of the ConAct is the Rural Development Act of 1972 (P.L.92-419) authorizing rural development loans and grants.[5]
Consolidated Farm and Rural Development Act of 1972
The Consolidated Farm and Rural Development Act of 1972 or Con Act (P.L. 92-419) authorized a major expansion of USDA lending activities, which at the time were administered by Farmers Home Administration (FmHA). The legislation was originally enacted as the Consolidated Farmers Home Administration Act of 1961 (P.L. 87-128). In 1972, this title was changed to the Consolidated Farm and Rural Development Act, and is often referred to as the Con Act.[6]
The Con Act, as amended, currently serves as the authorizing statute for USDA’s agricultural and rural development lending programs. The Act includes current authority for the following three major Farm Service Agency (FSA) farm loan programs: farm ownership loans, farm operating loans, and emergency disaster loans. Also the Act authorizes rural development loans and grants. (7 U.S.C. 1921 et seq.).
Special Program of 1974
Section Eight (8) of the Housing Act or (Ley de Vivienda del 1937).
Urban Development Grants
Also known as UDAG as to Action, Urban Development Grants are managed by HUD also known as the United States Department of Housing and Urban Development.
In 2006, The Village Voice called HUD New York City's worst landlord and the #1 worst in the United States. The criticism is based upon decrepit conditions of buildings and questionable eviction practices. [7][8][7]CONDADO
Zoning
Zoning (also known as Zonificación in spanish speaking state republics) is the customary practice (or conventional strategic procedure) of dividing a city, district or municipality with the sole intention (or objective common goal) of project planning residential, commercial and industrial buildings, in reserved areas (or sectors) that float on the verge of social and multicultural transmutation. These reserved hotspots are predetermined for specified usage through systematical and schematic corporate policy for future political advantage and current economic benefit.
Rundown
U.S. government involvement
The United States of America (U.S.) Department of Justice Antitrust Division announced the launch of a new web site in October 2007 to educate consumers and policymakers about the potential benefits that competition can bring to consumers of real estate brokerage services and the barriers that inhibit that competition. Among other findings, they report that certain new sales models can reduce consumer home sales costs by thousands of dollars. For example, in states that allow open competition, some buyer's brokers rebate up to two-thirds of their commission to the customer, and some seller's brokers offer limited-service packages that let sellers list their homes on the local multiple listing service (MLS) for as little as a few hundred dollars."[9] The DOJ web site, Competition and Real Estate, includes a link to the real estate laws of each U.S. state and how they support or inhibit real estate brokerage competition.
Law 77 of 1964
Law 77 of 1964 (also known as Ley Número 77 del 25 de Junio de 1964) regulates the business of Real Estate for companies headquartered inside Puerto Rico.
Antithesis
"Se reglamenta las transacciones realizadas en la isla por compañias dedicadas a la venta de Bienes Raices localizadas fuera de Puerto Rico" (Law 45 of 1980)
Law 5 of 1973
Summary
HOME is a program established under (Title II) also known as HOME Investment Partnerships Program of the Cranston-Gonzalez Act of 1990 (or Ley de Vivienda del 1990).
Abstract
This program provides (1) liquid assets (fondos) in the form of cash (equivalent numbers); and (2) special guidelines in order for the government (gobiernos estatales y municipales) to design proprietary strategies that takes care of the necessities and problems lying in housing (problemas de vivienda) areas as defined on the Comprehensive Housing Affordability Strategies also known as (CHAS) approved by the Federal Department of Housing (Departamento de Vivienda Federal) in 1990.
Law 10 of 1994
Law 10 of 1994 (also known as Ley Número 10 del 26 de Abril de 1994) was established to regulate the business profession of Real Estate Specialists for the Real Estate Industry of Puerto Rico.
Summary
The law countermands Law 139 (also known as Ley Número 139 del 14 de Junio de 1980) and Law 145 (also known as Ley Número 145 del 18 de Junio de 1980)
Ley Num. 139
"Se reglamenta el ejercicio de la profesión de corredor de Bienes Raices en Puerto Rico y se crea la Junta Examinadora de Corredores de Bienes Raices"
Ley Num. 145
"Se reglamenta las transacciones realizadas en la isla por compañias dedicadas a la venta de Bienes Raices localizadas fuera de Puerto Rico"
Book of Ethics
Rule of Ethics (also known as Reglamento de Ética) is a regulation to implement Law 10 of April 26, 1994: "la ley para reglamentar el negocio de bienes raices y la profesión de corredor, vendedor y compañias de Bienes Raices en Puerto Rico."
Real estate mortgages
In recent years, many economists have recognized that the lack of effective real estate laws can be a significant barrier to investment in many developing countries. In most societies, rich and poor, a significant fraction of the total wealth is in the form of land and buildings. In most advanced economies, the main source of capital used by individuals and small companies to purchase and improve land and buildings is mortgage loans (or other instruments). These are loans for which the real property itself constitutes collateral. Banks are willing to make such loans at favorable rates in large part because, if the borrower does not make payments, the lender can foreclose by filing a court action which allows them to take back the property and sell it to get their money back. For investors, profitability can be enhanced by using an off plan or pre-construction strategy to purchase at a lower price which is often the case in the pre-construction phase of development. But in many developing countries there is no effective means by which a lender could foreclose, so the mortgage loan industry, as such, either does not exist at all or is only available to members of privileged social classes.[10]
.jpg)
Regulations of 1997
The four (4) dalet regulations of April 3, 1997 established under the Roselló Administration:
- NO 5568 - Reglamento de Cursos
- NO 5569 - Reglamento de Procedimiento Adjudicativo
- NO 5570 - Reglamento de Licencias
- NO 5571 - Reglamento de Ética
Horizontal Law of 2003
- Reglamento de Venta de Propiedades localizadas DENTRO y FUERA de Puerto Rico (6 de junio de 2003) - (escrow after thirty (30) days of license) - Michel J. Godreau
the Horizontal Law (also known as Ley de Propiedad Horizontal or Ley de Condominios) was approved on April 5, 2003 under Law Ley 103 to be established on the 4th of July of 2003.
Digital application of 2010
Urban Kibbutz (digital) is a driving force application for real estate in Puerto Rico.
Protocol
Urban Kibbutz is a sophisticated digital network composed of micro-channels and innovative virtual spaces that empowers other countries mirror Puerto Rico's new business protocol (for next new markets) by promoting inspiration, evolution, sustainability and responsibility to the artistry of building brands for the retail, hotel, restaurant and entertainment industries. The metaphysical moniker of a nonlinear kibbutz was conceived and formulated by Jules Florencio Cortázar during the process of writing Hopscotch between 1961 and 1963.[11] Urban Kibbutz[12] also connotes a social gathering (of profound cosmopolitan revival) influenced by public art exhibitions, alternative lifestyle events, experimental media paraphernalia, urban beach festivals and downtown music extravaganza.[13]
Year 10
Although the economy has been stagnant over the past three (3) years, it has not been as hard hit by the sub-prime mortgage crisis as in some parts of the United States. The hundred million St. Regis Bahia Beach Resort will be one of the few new resorts to open this year amid all the prepossessing financing from local institutions because Puerto Rico, unlike the U.S. government, subsidizes its hotel industry.[14] According to the Latin America Weekly Outlook of Scotiabank Group, the island's economy has experienced a dramatic turnaround after three (3) years of uninterrupted economic decline. This nascent recovery is being supported by an ambitious and aggressive fiscal plan implemented by Puerto Rico's government backed by the fiscal stabilization package established last year in the United States.[15]
Fortuño
Recent evidence developments continue to support the February 2010 estimation of a 2.5% economic expansion during FY2011, representing the first (1st) yearly expansion in five (5) years. According to the new Governor of Puerto Rico, Luis Fortuño, the island's republic estate will be a competitor in the world of high luxury with the construction of a six-star hotel after closing a $231 million construction-financing agreement that turns the Dorado Beach Resort into a Ritz-Carlton Reserve.[16] The hotel is expected to be completed by 2012.
Value
According to The Economist, "developed economies'" assets at the end of 2002 were the following:
- Residential property: $48 trillion;
- Commercial property: $14 trillion;
- Equities: $20 trillion;
- Government bonds: $20 trillion;
- Corporate bonds: $13 trillion;
- Total: $115 trillion.
That makes real estate assets 54% and financial assets 46% of total stocks, bonds, and real estate assets. Assets not counted here are bank deposits, insurance "reserve" assets, natural resources, and human assets. It is not clear if all debt and equity investments are counted in the categories equities and bond.
Resolution
The real estate businesses in Mexico and Central America are different from the way that they are conducted in the United States. Some similarities include a variety of legal formalities (with professionals such as real estate agents generally employed to assist the buyer); taxes need to be paid (but typically less than those in U.S.); legal paperwork will ensure title; and a neutral party such as a title company will handle documentation and money in order to make the smooth exchange between the parties. Increasingly, U.S. title companies are doing work for U.S. buyers in Mexico and Central America. Prices are often much cheaper than most areas of the U.S., but in many locations, prices of houses and lots are as expensive as the U.S., one example being Mexico City. U.S. banks have begun to give home loans for properties in Mexico, but, so far, not for other Latin American countries.
One important difference from the United States is that each country has rules regarding where foreigners can buy. For example, in Mexico, foreigners cannot buy land or homes within 50 km of the coast or 100 km from a border unless they hold title in a Mexican Corporation or a Fideicomiso (a Mexican trust).[17] In Honduras, however, they may buy beach front property directly in their name. There are different rules regarding certain types of property: ejidal land– communally held farm property– can only be sold after a lengthy entitlement process, but that does not prevent them from being offered for sale. In Costa Rica, real estate agents do not need a license to operate, but the transfer of property requires a lawyer.
Trivial lathe
Some people have claimed that the word real in this sense is descended (like French royal and Spanish real) from the Latin word for 'king'. In the feudal system (which has left many traces in the common law) the king was the owner of all land, and everyone who occupied land paid him rent directly or indirectly (through lords who in turn paid the king), in cash, goods or services (including military service). Property tax, paid to the state, can be seen as a relic of that system, as is the term fee simple. However, this derivation of real is a misconception.[18]
Organic law (to be amended on 2011)
Law Five (5) DACO (Ley Número 5 del 1973) also known as Ley Orgánica del Departamento de Asuntos del Consumidor (or the Organic Law) clearly states the strict prohibition of real estate false advertising in commercial spaces including but not limited to wallscapes, newspapers, magazines, digital media and visual promotional street marketing material: Articles 6A-6J-6K and 19.[19]
Further reading
References
- ^ Race Space and the Puerto Rican citizenship and it became known as the Foraker Act after its sponsor, Ohio Senator Joseph B. Foraker.
- ^ The World Almanac & Book of Facts 1901, p93
- ^ Halstead, Murat (1898), The Story of the Philippines and Our New Possessions, Including the Ladrones, Hawaii, Cuba and Porto Rico, pp. 176-178
- ^ Report for Congress: Agriculture: A Glossary of Terms, Programs, and Laws, 2005 Edition http://ncseonline.org/nle/crsreports/05jun/97-905.pdf Jasper Womach
- ^ Report for Congress: Agriculture: A Glossary of Terms, Programs, and Laws, 2005 Edition http://ncseonline.org/nle/crsreports/05jun/97-905.pdf Jasper Womach
- ^ Report for Congress: Agriculture: A Glossary of Terms, Programs, and Laws, 2005 Edition http://ncseonline.org/nle/crsreports/05jun/97-905.pdf Jasper Womach
- ^ a b "NYC's 10 Worst Landlords". The Village Voice. 2006-07-05.
{{cite web}}: Italic or bold markup not allowed in:|publisher=(help) - ^ "HUD: The Horror Movie". The Village Voice. 2001-01-10.
{{cite web}}: Italic or bold markup not allowed in:|publisher=(help) - ^ "Antitrust division launches web site on competition in the real estate brokerage industry". Retrieved 2007-10-17.
- ^ Dash, Eric (2010-04-29). "Puerto Rican Lenders Face Their Own Crisis". New York Times. Retrieved 2010-07-13.
- ^ "Cortázar, Julio - Introduction." Contemporary Literary Criticism. Ed. Brigham Narins. Vol. 92. Gale Cengage, 1996. 27 Jul, 2010 http://www.enotes.com/contemporary-literary-criticism/hopscotch-cortazar-julio
- ^ Friedman, Wendy Ilene. "Urban Kibbutz Real Estate". Daily News (New York). Retrieved 2009-3-13.
{{cite web}}: Check date values in:|accessdate=(help) - ^ Smith, Roberta. "Stretching Definitions Of Outdoor Sculpture". New York Times. Retrieved 2000-7-28.
{{cite web}}: Check date values in:|accessdate=(help) - ^ Webber Sadovi, Maura. "Resort Rises on Subsidies". The Wall Street Journal. Retrieved 2010-5-12.
{{cite web}}: Check date values in:|accessdate=(help) - ^ Murtas, Sandro. "Puerto Rico to close FY2010 with a blast as economy performs a dramatic turnaround". Scotiabank Group Latin America Weekly Outlook. Retrieved 2010-7-27.
{{cite web}}: Check date values in:|accessdate=(help) - ^ Rios, Jannette (2010-07-22). "Ritz-Carlton puts on the Ritz with $231 million pact". Puerto Rico Daily Sun. Retrieved 2010-07-28.
- ^ Mexico and Direct Foreign Ownership of Coastal Property, MexiData.info (April 12, 2010) http://www.mexidata.info/id2615.html
- ^ "Real" – The American Heritage Dictionary of the English Language, Fourth Edition. Houghton Mifflin Company, 2004. Dictionary.com Retrieved July 12, 2008
- ^ DACO (2009-07-15). "Departamento de Asuntos del Consumidor: Organic Law". Gobierno de Puerto Rico. Retrieved 2010-07-14.
.png){kind=link}