Real Estate Title Search
- Category: Real Estate
Conducting a title search is the first step when considering buying any property for sale in Chile. A full title search in Chile goes far beyond just tracking the ownership history of a property on paper. There are many more issues that need to be checked among the numerous public records available in the Chilean legal system related to real estate, and there are many other title issues that come from just common sense experience of the problems in particular regions and communities in Chile.
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.
You should receive full copies of all official documents related to the title search, along with written explanation of there significance, and your attorney should be able to answer any questions you have about the documents. It is unfortunately a common practice of some attorneys in Chile to simply say they conducted a title search, and then tell you the property is fine without presenting any more details. If needed, ask your attorney to translate the documents to English or your native language. When done, you should have it clear in your mind what you are buying and what the risks are to buying any particular property, before you commit any significant amounts of money to a purchase.
Just some of the problems you or your attorney in Chile must consider on a region by region bases are the delicate status of the water rights, colonization laws, the effects of past agricultural policies of the Government, poorly conducted surveys, zoning and building permits, and more. What to look for is mostly determined by the history of local development patterns of the region.
Knowing where to look for the problems with any particular property is not an easy task, and finding the right strategy for a comprehensive title search takes time. The best advise is take that time and do not rush into a purchase, or allow anyone to rush you in to a purchase in Chile until the title search is complete. Complete 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. Even when problems are found, most problems with a property title in Chile can be fixed.
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 seller or the seller's agent, should be able to provide this information. The most important information is the county were 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 the year is essential. With this information your attorney can request at the County Registry a 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, and request all related documents for the property you are considering buying.
You must keep in mind that for a full comprehensive title search, your attorney will include an examination of all registrations for at least 10 years. This time frame it is based on the maximum statute of limitations established by law for bringing legal claims against a 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, and so on.
Each county (or group of counties in the less populated areas of the Chile), have their 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, if you are purchasing property near Futaleufu in the Patagonia, 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. The offices will be spread over a large geographical area.
Usually across Chile, requesting the documents needed for the title search does not take very long, with the exception of Santiago and some other major cities. In those cities you must wait at least two weeks to receive a certificate, and sometimes longer.
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 regional 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
Each document has its own special legal implications and effect on the value of a property in Chile. On the next page, we will look at costs of some of the more important documents and what they legally mean for your property.
Each document has its own special legal implications and effect on the value of a property in Chile. On the next page, we will look at costs of some of the more important documents and what they legally mean for your property.
As reference of costs, these are a list of typical documents you need for any title search, and the prices according to the national Conservadores. Please be aware there may be variations in the prices by register, and changes.
Certificado de Dominio Vigente (Certificate of Outstanding Ownership)
The Registry certifies that the ownership of 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 mortgage, easements, rights of use affecting the property, or alternatively the fact that there are no such limitations. Prohibitions on a certain property in Chile might be either conventional or by a court order. For example, a prohibition to sell the property in the first 5 years after the owner purchased 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 in to 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 throughly. There can be a time gaps between a legal claim being 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 it is separated from the owner's right to the property. In order to obtain water rights a special 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 without proper water rights, the property would be essentially worthless. This registry also covers wells on the property, or anything effecting the water table in an area.
Price: Ch$ 4900.00
Corporate Certificates
Corporate Certificates
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 and if a certain person does have the authority to act on behalf of the corporation for buying or selling a property. There is no such thing as a valid corporation in Chile that has not been registered in this public record.
Beyond checking the documents with registry for issues, and relating that information to the other public records and data bases in Chile, there are a few additional issues that are often worth investigating during a title search:
Surveys and boundaries in Chile: The title description, the plot registered, and the boundaries description (Minuta de deslindes)
In Chile when purchasing urban properties, boundaries are usually clearly determined and fully described on the title as registered at the Property Registry. Common problems in urban areas are typically related to ownership, inheritance, and pending legal claims; but, rarely with the property lines or boundaries.
The situation in the case of agricultural or rural land can be very different. We have detected many serious flaws in the system of registration and the national survey system recorded with the Bienes Nacionales (the Chilean department of the interior ) and their national data base. Thus, resurveys and title corrections are often required before purchase. Sometimes it is simply to update the original property line descriptions to modern practices of surveying. For example, in the case of agricultural land, subdivisions must be approved by the Agricultural Authority and registered in the Bienes Nacionales Office (National authority for public property). For that reason the engineer or surveyor in charge of that subdivision must present the project to those authorities for approval in Chile. The authorities should check if the survey is correct, and in accordance with the previous documents and that all boundaries are consistent. Being an act of authority, they are presume to be correct; but, in practice we have encountered serious errors with plots. In terms of legal consequences, a mistake of this sort will end in Court proceedings, independently of the legal responsibility of the official that approved such a plot with the errors. Double checking that the plot presented to the authorities has been done without errors is essential.
Thus, as standard practice we recommend to all of our clients that properties be independently resurveyed before purchase. When preliminary information in the title search indicates the possibility of a problem, we insist that the property be resurveyed ( e.g. the property is on a river, or descriptions from one title to the next does not match ).
The situation in the case of agricultural or rural land can be very different. We have detected many serious flaws in the system of registration and the national survey system recorded with the Bienes Nacionales (the Chilean department of the interior ) and their national data base. Thus, resurveys and title corrections are often required before purchase. Sometimes it is simply to update the original property line descriptions to modern practices of surveying. For example, in the case of agricultural land, subdivisions must be approved by the Agricultural Authority and registered in the Bienes Nacionales Office (National authority for public property). For that reason the engineer or surveyor in charge of that subdivision must present the project to those authorities for approval in Chile. The authorities should check if the survey is correct, and in accordance with the previous documents and that all boundaries are consistent. Being an act of authority, they are presume to be correct; but, in practice we have encountered serious errors with plots. In terms of legal consequences, a mistake of this sort will end in Court proceedings, independently of the legal responsibility of the official that approved such a plot with the errors. Double checking that the plot presented to the authorities has been done without errors is essential.
Thus, as standard practice we recommend to all of our clients that properties be independently resurveyed before purchase. When preliminary information in the title search indicates the possibility of a problem, we insist that the property be resurveyed ( e.g. the property is on a river, or descriptions from one title to the next does not match ).
Using the subdivision or plot maps, we check the registered title description against the plot map. Generally, when subdivisions of the property have taken place, the limits are not only described on the title, but detailed on a separate document attached to the Registry (protocolizado) called "Minuta de Deslindes". In many cases the old boundaries will be described on the title vaguely, and usually describe the border in reference to the ownership of the neighboring properties that might itself have changed or had errors in the title.
In rural areas, it is common to find titles vaguely describing the limit such as in the following:
In rural areas, it is common to find titles vaguely describing the limit such as in the following:
North: Property of Carlos Matamala, separated by a fence.
South: River Claro in 5 meters of the highest waters.
East: Property of Carrera Family, separated by a fence.
West: Property of Carlos Matamala, separated by a fence.
As can be seen in this case, there might not be even reference to how many meters each line has or if it is a straight line or skewed. As the property gets split, descriptions are often better and the plots registered have GPS references. For these reasons it is crucial to check the description on the "minuta de deslindes" and plot itself. Also, it might be necessary to check the titles of the neighboring properties and their plots in a sort legal and surveyor forensics operation to determine the real property lines for dependencies between the legal description and the physical property .
When properties have not been subdivided, checking the old plots in the field is very important. Most of the references on the old plots are to either natural marks (e.g. rivers, old rotting logs)- that might have changed - or owners that might have changed. Sometimes tracking down problems with a title can be made easier by talking to the community, as the situation in conflict might be of public knowledge. This is where getting out and getting to know the neighbors, the ranch hand that works down the road, and the local city officials becomes a critical tool to detecting title problems in rural areas. Local knowledge and experience is essential.
In the case of rural property in Chile, boundaries are sometimes not easy to determined based on titles and legal documents alone. They do represent the basis for a safe purchase, but many steps should be taken to verify they are correct. Resurveying the property, establishing GPS coordinates, and including a reference on the Sale and Purchase agreement contracts, are just a few of the many steps that might be taken in order to avoid legal crusades in the future when purchasing a property in Chile.
Expropriation of Private Land in Chile by the Goverment of Chile
The Chilean legal System established that nobody can be deprived of their property or any of the rights of ownership if it is not by a general or particular law authorizing expropriation based on the common good or national interest. The legality of that expropriation act can be disputed in court, and always the expropriation gives the right to a full compensation based on the market price of the property. The amount of the compensation can also be disputed if it does not correspond to the market value of the property. Foreigners and Chileans owning property in Chile have the exact same rights and responsibilities in regards to owning property in Chile. Usually for major public projects such as roads, the Government will tend to pay higher than market prices to avoid any possible legal conflicts or delays in the project.
In order to check if a property is being considered for expropriation there are 2 basic documents:
Certificado de no Afectacion Municipal (Expropriation at the county level)
Certificado de no Expropiacion (Expropriation at the National Level)
The national level must be requested usually at the regional office of the Ministry of Housing and Urban Planing. The municipalities of each county issue the other certificate and set the requirements of time and information needed in order to get it. Both certificates will declare clearly if the property is being considered for expropriation. It allows property owners and the public to plan accordingly, and / or exercise their rights as a property owner.
Finally, the Zoning laws, property use, building permits, and building restrictions for a property should be checked. Please see our article on property and real estate zoning laws in Chile.
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. You must have competent legal council to conduct a complete title search. This article is intended only to give foreigners purchasing real estate in Chile a general reference for the sorts of documents you should expect to receive in a complete title report. Again, many if not most issues with a title can be fixed in Chile, if they are found early.
