Explaining Chiles Land Title System

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Explaining Chiles Land Title System
A Real Estate Title search in Chile goes way beyond just tracking the ownership history of a property. Many more issues need to be checked in the numerous public records available in the Chilean legal system. Many other title issues come from common sense experience of the problems in particular regions.
Beyond just knowing what documents to request and their significance for a title search in Chile, knowing the local problems and history is essential. For example, what are considered problems in urban areas are not even recorded in rural areas, and vice versa. What is true in the North of Chile and the South of Chile is not an issue in the Central Regions of Chile. Let us start by emphasizing that a complete title search should be done by an attorney, not a real estate agent or someone else.
Some of the problems you or your attorney in Chile must consider on a region-by-regional base are the delicate status of the water rights, colonization laws, the effects of past agricultural policies of the Government, poorly conducted surveys, zoning and zoning and building permits, to name a few. What to look for is mainly determined by the region’s history of local development patterns.
Knowing where to look for problems with any particular property is not easy, and finding the right strategy for a complete title search takes time. The best advice is to take that time and do not rush into a purchase or allow anyone to rush you into a purchase in Chile until the title search is complete; however, a thorough title search along with a solid contract based on that title search will help you eliminate almost all the risk associated with buying real estate in Chile.
Documents Needed for a Title Search in Chile
To start a title search, you must have the registration information for the latest title on the property. The most important information is the county where it was registered, the number and page of the registration, and the year when the registration took place. The public record for each year will have the same serial numbers and pages, so knowing the year is essential. If you have this information at the County Registry, you can request the Certificate of Valid Ownership ( Certificado de Dominio con Vigencia ). With just this information, a qualified attorney in Chile will be able to start the title search processes that lead to all the other documents for the property.
You must remember that a comprehensive title search will examine all registrations for 10 years. This time frame it is based on the maximum statute of limitations established by law for bringing legal claims against property in Chile. Many problems, or potential problems, can be detected based only on the information collected by the title registration. For example, potential legal claims based on inheritance, pending contract obligations, etc.
Each county (or group of counties in the less populated areas of Chile) has its own regional Registry. For purchases of property in southern Chile, handling a title search from Santiago will imply dealing with the regional authorities, local municipalities, and the registries in the city where you are purchasing the property. Often in remote towns, you will have to deal with the public offices in the provincial capital and regional authorities to collect all of the needed documents. For example, suppose you are purchasing property near Futaleufu. This will mean dealing with the Municipality in Futaleufu, the Registry in Chaiten, and the regional authorities such as the IRS office in Puerto Montt. All of these are hundreds of miles apart, and each has its own office politics and culture.
Usually, across Chile, requesting the documents needed for the title search does not take very long, except for Santiago and some other major cities. You must wait at least two weeks to receive a certificate in those cities.
The Santiago Registry has a website where documents and certificates can be ordered online. They have a very automated system, and they take online payments.
Property Title Registries in Chile
The National Registry System in Chile is based on the work of three public officials considered part of the Chilean Legal System and supervised by the corresponding Appeals Court based on territory. These officials are the Notary, Registry and Archiver.
The title registry maintains the following public records:
- Property
- Mortgage
- Prohibitions and Legal Capacity
- Commerce
- Water Rights
- Mineral Rights
- Industrial Lean
- Agricultural Lean
- Special Lean Law 4,702
Certificado de Dominio Vigente (Certificate of Outstanding Ownership) The registry will certify that the ownership of a certain person is still valid. Price: CLP$ 4900.00
Certificado de Gravámenes y Prohibiciones (Certificate of Mortgage and other limitations to ownership and Prohibitions) With this document, the Registry certifies the current limitations to ownership such as a mortgage, easements, rights of use affecting the property, or alternatively the fact that there are no such limitations. Prohibitions on a particular property in Chile might be either conventional or by a court order. For example, a prohibition against selling the property in the first 5 years after the owner purchased it or a court order forbidding the sale of the property while a legal claim is pending. Courts might order provisional measures such as the auction of the property upon default of a debt or just prohibit the owner from entering into contracts to sell while a dispute is pending. (Embargo and Prohibicion de celebrar actos y contratos)
Price: CLP$ 6600.00
Certificado de Litigios (Certificate of Legal Claims)
Record of legal claims pending regarding the property or the fact that it does not have any legal claims pending registered at the time of the request. Additional steps must be taken to check this thoroughly. There can be a time gap between a legal claim filed with the court and the time the registry is notified.
Price: CLP$ 9900.00
Certificado de Bien Raíz Familiar (Certificate of Family Status of the Property)
According to Chilean Law, a property can be given the status of Family Property. This usually affects the first home in cases where divorce or alimony payments are pending. This law is intended to protect the home of the family.
Price: CLP$ 12200.00
Water rights
In Chile, the system of water rights is separated from the owner’s right to the property. To get water rights, a particular procedure must be followed at the regional water authority (Direccion Regional de Aguas). The Registry has a special public record for those water rights called “Registro de Aguas”. Copies of those rights must be requested when studying a title. This is especially important in areas where the property would be essentially worthless without proper water rights. This registry also covers well on the property or anything affecting the water table in an area.
Price: Ch$ 4900.00
The Registry also has public records of all corporations in Chile. This is known as the “Registro de Comercio”. You can get copies of those registrations if a certain person does have the authority to act on behalf of the corporation for buying or selling a property. There are no valid corporations in Chile that have not been registered in this public record.
Beyond checking the documents, the registry issues, and relating that information to the other public records and databases in Chile, there are a few additional issues that might be worth considering when purchasing a property:
Zoning Laws in ChileGetting information about building or restoration requirements for the property you wish to buy, or if you are allowed to have a commercial operation in a certain neighbourhood, must be done at the Municipal level. Zoning is dealt with on county by county basis. Each Municipality has its own set of rules for the requesting and type of certificates you might need based on their Municipal Urban Planning Statute. In most cases, buying property for residential purposes will not be an issue unless you are planning to build a second floor or make changes that might affect the sidewalk, such as fences and access. The certificates issued by the Municipality are usually called “Certificado Municipal de Zonificación” or “Certificado de informaciones Previas”. In these, you will find the particular details about the conditions applicable for the use of the land and construction requirements. As a general trend, the bigger the city, the more requirements regarding urban planning. Some cities, though, do not have their own Urban planning Statute or office.
Construction Permits in ChileI n order to build a house, the Municipality must approve the architectural project and the construction itself. It is good to ask for construction permits before buying a building. In many areas, primarily rural, the projects get approved, but the final certification is still pending. (i.e. a process called Recepcion Definitiva de las Obras where the county authorized the use of construction for either residential or commercial purposes). Typically, getting all the documents needed for that approval will take time. Rarely will the problem be more than bureaucracy and time, but there might be a possibility that something more serious is occurring.
Business Permits and Land Use in Chile
It is good to have in mind when buying property for commercial purposes in Chile to check if establishing a business is possible in the areas where you are buying and if the commercial use has been properly authorized by the local Municipality. If the property is registered as residential, you can ask for a change of use at the Municipality.
This has nothing to do with your business license in Chile. You must apply with several local authorities and follow their procedures. This reference is just regarding the use of your property.
In conclusion, you can see that conducting a title search in Chile is not a trivial thing. We do not recommend that you attempt a title search on your own. We recommend seeking competent legal help to conduct a title search. Still, in this article, we hope to give you a reference point for the sorts of documents you should expect to receive in a complete title report when considering buying real estate in Chile.
Information source: Zandra Valenzuela. She is a practising Chilean attorney and a professor of International Public Law at several universities in Chile.
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