Tag: buy real estate in Nicaragua


Is it difficult to purchase real estate in Nicaragua?

Is it a difficult process to purchase real estate in Nicaragua?

Nicaragua IconThe simple answer to this often asked question is “No, it’s not a difficult process to purchase property in Nicaragua.” Foreign Investment Law 344 recognizes foreign investors’ rights to own property in Nicaragua and establish a business if they wish. Under Law 344 foreigners are permitted to own their property 100%, with equal rights to Nicaraguans.

Nicaragua offers incredible opportunities in real estate, from elegant colonial homes in Granada, the oldest European established city on the mainland of the Americas, to the beach front property the entire length of the Pacific coast.

Most of the real estate sold to foreigners are second homes sold to buyers from the USA and Canada. However, there are many North Americans and Europeans
relocating to Nicaragua to live permanently as retirees.

It is important to remember that real estate transactions and the supporting Nicaragua institutions are underdeveloped. Most purchases are cash transactions with the buyer and seller directly negotiating. There are real estate agents in Nicaragua, but legally they’re nothing more than middle men. The only person legally recognized to sell or lease a property is the registered owner. That said, it’s advisable to have a lawyer or individual knowledgeable in both Nicaragua laws and specific properties to consult with. I say this is because the titles of some properties have issues that can result in problems in transferring ownership.

Many properties in Nicaragua were confiscated illegally in the 1980s and ownership can or is being contested. Some properties were never properly registered in the first place, especially rural real estate. Thus determining who exactly is the rightful owner of a given property can be challenging. Even a comprehensive title search can fail to reveal ownership claims. Caveat Emptor, (Buyer Beware), is of tantamount importance when considering any real estate purchase in Nicaragua.

To be avoided completely if you are planning to purchase a property to build on are properties that have agrarian reform titles or supplemental titles issued by court order.

The Purchase Process

The process of purchasing a property starts with an offer being accepted by the buyer. A competent lawyer is needed to make sure there are no issues with the title or survey and, if there are, to resolve them BEFORE a formal promise of sale is agreed to. Once a promise of sale is created and agreed to, a NON-REFUNDABLE deposit of 5% to 20% is paid to the seller and a timetable for closing is set.

Once a purchase is completed, the process of registering a property takes approximately 65 days. The detailed steps to registering a property in Nicaragua are outlined here: The Steps Involved In Transferring Nicaragua Real Estate.

The transfer tax to be paid by the purchaser is incremental, meaning the more expensive the property, the great the percentage of the value is due as transfer
tax. The current tax schedule is…

  • Up to US$50,000 = 1% of the purchase price
  • US$50.000 – US$100,000 = 2% of the purchase price
  • US$00,000 – US$200,000 = 3% of the purchase price
  • Over US$200,000 = 4% of the purchase price

If you have any questions or wish to discuss the purchase or leasing of a property in Nicaragua, contact us.

One Man’s Loss Is Another Man’s Gain

Nica Investments LogoNica investments does not maintain “listings” of the same Nicaragua real estate offered for sale by every realty company or individual in the country. Nor does Nica Investments tack a sign on the wall of a house that already has one, two, three or even four other signs stating the obvious… this property is for sale and I want to be the person who sells it.

What Nica Investments does is locate well priced properties in ideal locations that our clients would do well purchasing. One such purchase opportunity is about to become available.

There are five adjoining lots in the initial phase of a subdivision that were previously considered sold. The term of the existing agreement to purchase is about to expire, and the seller has already moved on to phase two. They will be offered for sale at the end of this week.

The lots are on a paved road, are fully serviced, flat and ready to build on. The lots are about 58 meters deep and the approximate frontage of each is 30 meters.

The seller is asking US$34,900 per lot. However, he would be open to negotiating with a purchaser interested in buying all five lots. It is possible the seller would even consider a joint venture partnership with a developer willing and able to construct five homes. Assistance with marketing would be provided, and construction would have to begin within 60 days of an agreement being reached.

My personal recommendation to clients is to purchase all five lots at as good a price as can be negotiated, then resell them… with houses constructed on each. Why do I suggest this? Because this subdivision is not one of the pie in the sky developments that dot the Nicaragua landscape. All of the seller’s available lots in phase one are sold except for these five. Within the first phase there are already homes built and occupied, and others are under construction. These lots front a quality paved road, with water, electricity, and streetlights already in place… not promised and unfulfilled, as is so often the case in Nicaragua.

Soon the infrastructure for phase two will begin, and soon after the marketing of phase two lots will commence. It’s a sure bet that when prospective phase two purchasers start to drive past these few remaining phase one lots they’ll not last long.

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Buying Real Estate in Nicaragua

MombachoIf you’re planning to invest in real estate in Nicaragua it is important to use common sense. There is an old saying, “If it seems too good to be true, it probably is.” Caveat Emptor, “buyer beware”, applies in all real estate purchases the world over, but is especially applicable when buying property in Nicaragua.

Do your due diligence…

Nicaragua employs a civil law system. This differs from the common law system of the United States, Canada and European nations. Civil law is based solely on statutes, so there’s no facility to reach a compromise resolution should problems arise.

The official language for all real estate transactions in Nicaragua is Spanish. However, it is possible for an English contract to be legally binding. The English language contract is only legally binding though if it is presented to the court. The contract will have to be translated into Spanish, after which a judge will interpret the contract, and verify the signatures. The judge’s interpretation of the contract will be binding, even if that interpretation is not exactly how the buyer and/or seller understood the transaction it to be.

Hotel de Sonrisas, Granada, Nicaragua

Court proceeding in Nicaragua take time… months, sometimes years. So you do not want to have to depend on judicial arbitration to resolve any issues that arise while purchasing a property. Therefore it’s imperative to have all the i’s dotted and the t’s crossed. Half of the clients Nica Investments serves are purchasers who seek assistance in sorting out a real estate purchase that has gone bad.

Following are some tips to help with a purchaser’s due diligence and to avoid problems:

  • Hire An Attorney – Have your own attorney capable of speaking your language. Your lawyer will look out for your interests. Do not depend on an attorney hired by the seller or the seller’s agent.
  • Conduct A Thorough Title Search – Be sure to carefully review the chain of title to the land being purchased. The chain of title to be reviewed must trace back at least 30 years. If the property being purchased is located on any body of water, even a river, the full chain of title dating back to before 1917 is required.
  • Agreement To Purchase Terms – Be sure the agreement states the purchaser will receive a free and clear title without any encumbrances, including mortgages. There must also be a clause stating that the purchaser will be released from any purchase obligation if there is a serious issue with the title, and that any deposit will be returned.
  • Make Sure the Property is Properly Surveyed – Assure that the survey marks all the corners of the lot. Also, be sure the survey is an approved, official (cadastral) survey, which will bear the official stamp and a signature.
  • Escrow and Closing Process – In January 2011, the Nicaraguan National Assembly approved a new Trust Law. Unfortunately the regulations have not been issued yet. Local companies are already offering escrow services but it isn’t wise to use them until the regulations to the Trust Law are approved. If you do you may find you have lost your money. Nica Investments prefers to deal with US banks and take advantage of their escrow services. On rare occasions this insistence has resulted in a seller refusing to cooperate, but most legitimate sellers are happy to work with US banks provided the purchaser is covering any escrow fees and transfer costs.

Securing Your Interest In Nicaragua Real Estate…

It is recommended that all real estate transactions be registered in the Public Registry. This include a purchase, lease, mortgage, possession right or any other transactions. Nicaraguan law isn’t clear as to whether the Public Registry serves as a means to establish property rights or serves merely as a means of publishing an existing right, but it is advisable that any claim to a property be registered. That said, the Nicaraguan legal system does recognize the registration of a title as establishment of property rights, so title must be properly registered with the court.

Different government agencies involved in the registration process in Nicaragua constantly change, while existing agencies add new requirements. These changes to the registration process make the registration of a property title challenging, so it is recommended that purchasers employ the services of a competent lawyer or real estate acquisition consultant like Nica Investments.

Important Differences In Real Estate Transactions…

Worth noting is the fact that “real estate agents” in Nicaragua are not the same as their counterparts in the USA, Canada or Europe. There are no “real estate brokerages” in Nicaragua as foreigners would understand them to be. Nor are there trained, licensed and monitored “real estate agents”. In fact, there is no Nicaragua equivalent to “real estate boards”, nor is there anything like a “Multiple Listing Service” (MLS) that monitors and tracks real estate transactions. To find comparable property values one has to search titles. Unfortunately this can be a futile effort because often the selling price is reduced so the buyer will pay less transfer tax, or the price is inflated to secure more financing from an institutional lender.

Only owners of a property sell their real estate. Anyone presenting themselves as the seller’s agent is generally a middle man, with the exception of estate lawyers. In most cases the seller has demanded a net amount they want and these middle men will add on a profit margin for themselves. The additional amount is often significant, far more than the few percent USA, Canadian and European realtors could hope to receive. This is in part due to the need to have a negotiating cushion, but of course greed is a factor too.

There are rare occasions when an agent for the seller is granted an exclusive right to sell a property on behalf of the owner. If you’re told such an agreement exists, demand to see it. I’ve yet to be shown anything granting exclusivity other than by lawyers in possession of a Power of Attorney. However, I’m not saying that there may not be exclusive agreements a seller and an agent entered into… just that I have never seen one. If no exclusivity exists it’s possible the same property will be advertised by other agents for more or less money, so research is recommended.

All real estate transactions must be carried out through a Public Deed (known as an Escritura Pública), to be legally binding in Nicaragua. The Public Deed must be written in Spanish and it is the responsibility of the purchaser to retain a translator if he or she does not understand the language.

When purchasing a property the buyer must make sure that the public deed transfers possession and ownership, that the size of the property is verified with a surveyor’s map, and bounds are detailed in the title document, and it’s approved by the Cadastral Office. The purchaser must physically inspect the property to ensure that it’s in accordance with the topographers’ map and the property description on the Public Deed.

The purchaser is advised to insist on vacant tenancy. If anyone is living on land, domiciled inside a main or out building, or a tenant in a residential or commercial property, insist that the seller have them vacate. It can be a lengthy and costly undertaking to remove both legal tenants and squatters. No matter what relationship the seller says the occupant has, insist that the seller will provide vacant tenancy, and that includes the seller if it’s the seller’s home being offered for sale. I personally know of two cases where the seller was paid the full amount of the purchase then refused to vacate the property. These were not transactions I was involved in, but I know of the buyers’ trials and tribulations.

Special Laws, Rules And Regulations…

Depending on the type or origin of property being purchased or leased, special regulations may affect properties rights.

Coastal Law

The 2009 Coastal Law applies to property bordering beaches, rivers, lagoons or lakes, or any other body of water. The Coastal Law regulates private and public domain, coastal access, as well as the use and development of properties located in these areas.

According to the law, the open area between low and hide tide, plus 50 meters from the high tide mark is open to public use. Regulations established in this act may also affect ownership, use, construction, lease, and possession rights beyond the 50 meter boundary with such properties. Real estate transactions involving waterfront properties require a thorough due diligence that traces back the title to before 1917, or to when the title originated.

No Objection Letter (Carta de No Objeción)

The Attorney General’s Office requires a No Objection Letter to register real estate that historically belonged to the Nicaraguan state, or are coastal properties, properties previously owned by cooperatives, titles that are based on a Supplementary Title, and properties whose titles were obtained through Laws 85, 86 and 88.

Registration of titles of properties that fall under one of these categories is not possible without a No Objection Letter. Once you initiate the registration process of one of these properties, the Cadastral Office will request this letter. Once registration goes through the Cadastral Office, the Public Registry will also request the No Objection Letter.

The process to obtain a No Objection Letter can vary from time to time. It is recommended a purchaser visit the Attorney General’s webpage at www.pgr.gob.ni for the latest requirements. It is also recommended that the services of an attorney or competent real estate acquisition consultant be retained. Failure to obtain a No Objection Letter will result in a denial of the registration of a title. The best approach is to insist that the seller of a property falling under a category requiring a No Objection Letter provides it, or an official document stating a No Objection Letter is not required.

Border Law

The 2010 Border Law prohibits foreign ownership of some properties located along the border. It is necessary to confirm the status of any property within close proximity of any of Nicaragua’s land borders. A good rule of thumb is to assume all properties within ten (10) kilometers of a border fall within the 2010 Border Law restrictions.

Indigenous Community Properties

Properties that belong to indigenous communities fall under special regulations and ownership is not transferable. This is important to know because there are people actively trying to sell land belonging to indigenous communities. It is possible to acquire concessions or lease rights, but it is not recommended to do so because any disputes over rights that may arise are difficult to settle. Environmental use and development laws also apply to a vast majority of properties owned by indigenous communities. Many of these properties cannot be used to build on. Nica Investments policy is to avoid properties belonging to indigenous communities.


What has been shared here is current as far as the rules, regulations and laws pertaining to real estate purchases in Nicaragua as of January 1, 2017. The one constant in Nicaragua real estate investing though is that nothing is constant. Rules and regulations change, and occasionally new laws are passed or existing laws modified. It is strongly advised that anyone looking to invest in Nicaragua real estate engage Nica Investments as their acquisition consultant and/or retain the services of a reputable and competent Nicaraguan attorney. Doing so will assure your property buying experience goes smoothly and disappointment is avoided.

Joint Venture Development Opportunity In Nicaragua

Joint Ventures are not common in Nicaragua and those that do launch are usually through agreements between foreigners. That said, there are some clever local Nica landowners who see the financial advantages of working with developers. I know of a few such situations, but I recently came across a very exciting opportunity.

I was asked to view a property on Lake Nicaragua, on the Granada shore. It’s 2.8 Manzanas (4.844 acres), or for the metric folks like myself, 19,772.5 square meters. Lake frontage is approximately 40 meters. Depth is 200+ meters.

The only development on the property is an attractive stone and concrete jetty, sea wall, boat launch ramp, and a small building where outboard boat motors are serviced, maintained and repaired.

The title is clear, and the seller is the sole owner on title.

Granada Isletas

The Granada Isletas, Lake Nicaragua.

Most of the nearby properties are owned by foreigners. The attraction is the closeness to Granada, while being tucked away in a quite, forested bay looking out upon the Granada Isletas. The isletas are a collection of 365 small islands formed long ago when Mombacho volcano blew its top.

What makes this property most exciting though is the open mindedness of the seller. He’s willing to sell the property outright of course. However, he’ll also consider working with a developer to subdivide the land and construct individual homes, condominiums or rental units.

Personally, I would go for a joint venture development arrangement. The owner will want US$200,000 to compensate himself for waiting to receive his sales proceeds. My initial take would be to subdivide the land into eight large (2000+ square meter lots) and build individual homes on each. Of course the lots can be made smaller to increase the number of lots and potential profit. But my gut tells me buyers interested in property at this location are looking for a private, green sanctuary, and that will require a decent sized lot.

Hotel de Sonrisas, Granada, Nicaragua

Both construction and pre-approved, retail mortgage funding is available through local lending institutions.

It is a rare opportunity in Nicaragua, a cash society, to find a vendor willing to work with a purchaser to the financial benefit of both. For this reason alone this opportunity will not last long.

If you miss this property, there are other joint venture opportunities available throughout Nicaragua. Many are much larger though. This one is a nice size and allows for a decent profit to be made on both the sale of lots and/or the sale of completed homes.

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What Gives With The Nicaragua Real Estate Market?

I Love Nicaragua IconOver the past couple of months I’ve met a number of foreigners looking for property in Nicaragua who voiced their disappointment that the properties they looked at were not discounted much. Their assumption was that with Nicaragua’s real estate market not as robust as it once was, there would be bargains aplenty.

The market is down for sure, but prices don’t reflect this. Here’s why…

Most of the large tracts of land and many developed properties in Nicaragua are owned by wealthy Nicaraguans who are used to having to wait to sell a property. Potential sellers acknowledge that the market is down, but they’re unwilling to discount prices, choosing to wait out market downturns. That said, there are always owners who have to sell quickly and will sell at discounted prices. The trick is to find these motivated sellers.

Another factor contributing to making the Nicaragua real estate market appear overpriced is that what’s advertised for sale is not necessarily for sale. Often owners will offer their property for sale at a price that’s too high to be taken seriously by anyone knowledgeable. I assume these sellers are hoping a sucker will come along and overpay. Unfortunately it happens often enough for property owners to keep putting overpriced real estate on the market.

Hotel de Sonrisas, Granada, Nicaragua

Peculiarities of the Nicaraguan real estate market.

Those properties that are reasonably price are not necessarily going to be sold by the seller for the price suggested. Sellers will ask for a reasonable amount but then refuse to accept it if someone actually wants to buy their property. I’ve experienced this myself and it’s annoying. The assumption on the part of these “sellers” is that if someone is willing to pay the price they are asking, then they’re not asking enough. These “sellers” are a waste of time.

The solution to time wasters is to have the word spread that there are buyers if a property can be purchased at a reasonable price. Nica Investments does just that and we’re constantly offered properties someone wants to sell.

Caveat Emptor (Buyer Beware)

A good 25% of reasonably priced properties are either outright fraud attempts or the properties can not be sold because the titles are too muddy. Once a con artist actually offered me a parcel of land to pitch to clients that included five fairways of a neighboring golf course within the boundaries of the offered parcel. It was news to the owner of the golf course that someone was offering a portion of it for sale.

Another 50+% are priced ridiculously high and nothing but a waste of time to even talk about. I handle these as diplomatically as possible while I show the “seller” the door.

Twenty to twenty-five percent of properties offered for sale are well priced. Unfortunately, half of these have title issues or some other negative factor that makes them impossible to take ownership of. The remaining properties that are well priced, with owners motivated to sell, and clear titles are excellent opportunities. These properties I immediately try to match up with existing clients’ desires. These properties usually sell within a matter of days, sometimes a week or two, so time is of the essence.

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Be Sure You Are Viewing The Real NicaInvestments.com

Warning SignElvis Presley once said, “Impersonation is the most sincere form of flattery.” Maybe so, but we at Nica Investments want our existing and prospective clients to know that www.nicainvestments.org has no affiliation whatsoever with Nica investments based in Granada, Nicaragua. Our website domain is www.NicaInvestments.com.

During a DNS problem that had our website offline, clients brought to our attention the existence of a website domain with a very similar name. This is totally coincidental and was not done to confused our clients or mislead anyone. However, it did have that affect.

So, to be clear… Nica Investments based in Granada, Nicaragua, has no affiliation with anyone based in Managua or anywhere else. Nor do we have any affiliation with Nicaraguan real estate or vacation rental agents anywhere in the country. We are a consultancy and focus on advising clients and/or acting on the behalf of clients during business and real property acquisitions, development management and management or real estate.

This situation does bring up a good point that needs to be shared… Nicaragua is one of the safest countries in the Americas, meaning North, Central and South America. On a per capita basis Canada is safest, but I believe Nicaragua is next. However, this refers to personal safety and loss of personal property through pick-pocketing, robbery, breaking and entering, purse snatching, and so on. Nicaragua, being a poor country, does have a problem with fraud and crimes of opportunity.

Crimes of opportunity are when someone forgets their phone, sun glasses, purse, backpack, etc. somewhere or leaves their wallet unguarded on a counter while paying for something. A dirt poor person seeing an opportunity to provide for his or her family by taking advantage of a situation they’re presented with will likely do so. The experience can ruin a vacation and cause stories to be told that are not flattering to Nicaragua. In all fairness though, I have been stabbed while being mugged only once in my life and that was in Vancouver, BC, Canada, the city I lived in at the time. I knew at the time I was where I shouldn’t be at an hour of the night I knew was risky, and the inevitable happened. My point being, you do not have to go abroad to find trouble. You just have to let your guard down or act foolishly. Stay aware of your surroundings as you should anywhere, and don’t make it easy for someone to steal from you and you’ll be OK.

Fraud in Nicaragua is a problem, but only if the potential victim allows the fraudster to fleece them. Again, the same as anywhere in the world. A rule of thumb to keep your money safe while doing a transaction in Nicaragua is to use a USA based bank’s escrow service. Alternatively, place any money to be transferred to the seller in trust with a reputable attorney within Nicaragua. I recommend this for a couple of reasons…

First, unbeknownst to many people investing in Nicaragua, deposits are not always refundable. Secondly, a deposit is supposed to prove intent. If a seller is not happy with the deposit or the entire purchase price being placed in escrow run… run fast, and run far.

Legitimate sellers will be satisfied with a deposit being held by a third party, as long as it is clear under what circumstances the funds are to be released and to whom. Some sellers may want funds to be held in Nicaragua, which is understandable. It is an expensive process to transfer in large sums of cash and a seller may not want to deal with the cost or formalities, especially when the funds are to be used in Nicaragua. On the other hand, there are sellers who embrace an offshore escrow arrangement because they can then have the proceeds of the sale transferred wherever they choose.

The Latin phrase, Caveat Emptor, or Buyer Beware, is applicable everywhere. However, it is more relevant in Nicaragua. The reason for this is only partially to protect against fraud. Ownership of some real estate is murky. It is required that a property be searched back to before the Sandinista revolution, and that every person named on the title consents to the property being transferred to another owner. This can become complicated in the case of  inheritances, or properties that were once seized from relative or cronies of the dictatorial Somoza family dynasty. Most of the issues surrounding seized properties have been resolved. However, generations of inheritances have resulted in some titles being held by the estates of persons long dead, or relatives that left the country decades before and are unaware they have claim to a property. Assistance with the due diligence aspect of a property purchase, as with all aspects relating to sourcing and purchasing real estate in Nicaragua is what Nica Investments does. Feel free to contact us for a free consultation.