FEATURED ROATAN REAL ESTATE
Roatan Buyers Guide
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Tugliani & Tugliani
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- Public Notary
- Real State
- Environmental Affairs
- Government Requests & more
- Honduras- Legislation Overview
- Real State in General
- Real State involving Individuals
- Real State involving Corporation
- Closing Documents Checklist
- Closings – Step by Step
Legislation Overview – Prohibitions
Constitutional Article #107:
State, Municipal or Private Properties situated along
neighboring countries or coastlines of both seas in an extension
of 40 km towards the interior of the country, including islands,
cays, reefs, rocks and sand banks, may only be acquired, possessed
or held at any title by Hondurans by birth, corporations formed
entirely by Hondurans, and, government institutions, under penalty
of nullity of the act or contract.
The acquisition of urban properties located in the limits
indicated in the above paragraph shall be subject of a special legislation.
(Congress Decree 90-90)
Property registrars are forbidden to record documents that contravene
Legislation Overview – Permissibles
Congress Decree # 90-1990
- 3,000 m/2 for Residential Purposes in a Foreigner’s Name
(approx 0.72 acres)
- Improvements (Residency) to be made in 3 years from purchase.
- Larger areas for tourism projects with authorization from the
Honduran Institute of Tourism
Firm’s Interpretation and Notes:
- 2 individuals may Not buy more land jointly;
- Improvements Building condition is not regulated (yet);
- For larger areas, even if for tourism projects, we recommend
the use of a corporate structure.
From Constitutional Article # 107 we’ve learned
that any of the following 3 elements are required to acquire land
in excess of what allowed by congress Decree # 90-90 (3,000 m/2):
- To be a Honduran by Birth;
- A Corporation formed entirely by Honduras;
- Government Institution.
# ‘s 1&3 are Not options, therefore, we’ll
Honduran Civil Code
Article # 50:
The Corporations, Foundations and Associations recognized by the
Law and which are domiciled in Honduras shall have Honduran Citizenship
if they have the concept of a juridical person as per the dispositions
stated in this code.
Article #56 :
Juridical Persons are :
- Associations of particular interest ; civil, mercantile or
industrial to which the law their own personality, irrelevant
to the one of its associates.
any corporation formed in Honduras, regardless of the Nationality
of its shareholders, HAS HONDURAN CITIZENSHIP.
ABC Holding Company, S.A
Is a corporation chartered and domiciled in Honduras,
therefore, has Honduran Citizenship. Can it own land according to
Constitutional Article # 107?
Anwer =No !!!
Because it is not formed entirely by Hondurans.
comply with the element “formed entirely by Hondurans”
we must take another step…
“Juan Perez” shall be a Honduran National
who will aid in the chartering process of the corporation since
a minimum of 2 shareholders are required for the purpose.
His/Her stock certificate shall be transferred by simple,
blank endorsement as allowed by commerce Code Articles # 126, 480,
482, 483, 484, 487, 489, 490, 491, & 492.
Real Estate in General.
1st. Feel comfortable with:
a) The property you intend to purchase;
b) Your real estate agent;
c) Your attorney.
2nd… Pay special attention to the terms and conditions you
agree to when signing the agreement to purchase property.
In your Real Estate experiences you will find
- From Individuals to Individuals;
- From Individuals to Corporations;
- From Corporations to Individuals;
- From Corporations to Corporations;
- Purchase of a Corporation with its Assets.
Closing Documents Checklist
- Agreement to Purchase Property stating all terms, conditions
- Property Title of the land, vested in the name of the Seller;
and, if applicable, property Title of parcel providing access.
- Dully recorded Power (S) of Attorney in the event seller (s)
or easement grantor shall not be present.
- Survey of the land with Polygonal description and area, signed
and stamped by a Honduran Civil Engineer or Architect.
- Cadastral Certificate of the Property subject of the Contract
(desirable but not mandatory)
- Passports, Residency Cards or other forms or ID of all parties
involved in the contract.
- Suggested name for Corporation (when applicable). Also desired
stock distribution and administration.
- Final payment of the Land and Closing Costs should already
be in escrow by the time of closing.
It is very important that the Closing Attorney you choose
checks the current Property Title, as well as the antecedents going
back at least 20 years.
*Ordinary Statute of limitation = 10 years (Involves
Fair Title and Good Faith)
*Extraordinary Statute of limitation =20 years (No Title and No
- Fauls and actions against the Government are NOT interrupted
by Statute of limitation; ever.
Accessories to Closing
- First American Title Insurance Company
- Stewart Title
- Easements of any sort
- Pedestrian or Vehicle Access
- Public Utilities
- Transfers Tax = 1.5% of Purchase value
- Cadastral Certificate = 1% or 2% (Depending on the Municipality
the property is Located. Applicable only to the Bay Islands.)
- Registry Fees = US$1.00 per every Thousand.
- Bar Association Stamps, Miscellaneous Expenses, Notary’s
Fees, Corporations, etc..
- Closing Costs, in average, are equivalent to approx. 5% of
the transaction’s value.
- All Real Estate Transactions involve an Attorney (Notary).
Transactions documented in Private documents do NOT have any legal
effect before third parties.
- All closing documents MUST be recorded at the Registry House.
Average time, currently, approx. 3-4 months.
- Closing Costs are customarily payable by the Purchaser.
Pre & Post Closing Procedure
- Spotting the Right Property for you
- Signing of Agreement to Purchase Property
- Deposit of 10% Earnest Money
- Establishing Terms, Conditions and Contingencies
- Setting a Closing Date Signing of Agreement to Purchase Property
- Closing- Transfer of Ownership (Signing of Public Instrument)
and Disbursement of Payments, Commissions and Closing Costs.
- Payment by Attorney of Transfers Tax, Registry Fees, Bar Association
Stamps, etc. (72 hours)
- Release of Authorized First Copy by the Notary
- Issuance of Cadastral Certificate by the Local Municipality
- Submission of the Deed to the Registry.
- Registration of Deed
Purchasing a Corporation along with its asset (s) involves
a slightly different procedure than Real Estate Closings.
- No Transfer Tax Payment Since there’s no transfer of
ownership involved. Property remains in the name of the Corporation.
- Instead, a change of Administrator’s) or Board of Directors
takes place through a Public Instrument as well.
- All Property Documents and Corporate Documents, including BLANK
ENDORSED Stock Certificates as allowed by the Honduran Commerce
- Same Closing Documents Checklist For Real Estate is Applicable
plus ALL Corporate Documents.
Sense of Security –Convention Between the USA
Congress Decree No. 207-98, published in the Official
Gazette November 28, 2000 (vol. 29,339)- Bilateral Treaty (USA-Honduras)
relative to Reciprocal Sponsorship and Protection of Investments.
- No Expropriations; unless for Public Interest which is followed
by the corresponding indemnification.
Tugliani & Tugliani
This presentation is a General Overview of Real Estate
transactions in General.
All Transactions have their own level of customization
to them, therefore, if you feel you need to ask a specific question,
please contact us…
Italo, Gio & Alex Tugliani
Roatan: Tel/Fax (504) 445-3130 & 445-3028
Tegucigalpa: Tel/Fax (504) 231-0722