San José, Costa Rica, since 1956

Suspension of Property Inscriptions Befuddles Market

An effort by the Sandinista government to sort out Nicaragua’s messy property title situation – a legacy of their first government in the 1980s – has led to a suspension on property inscriptions that legal analysts say is both illegal and potentially confiscatory.

In a memorandum sent to Granada’s Property Registrar’s Office last November, Attorney General Hernan Estrada ordered a suspension of all property inscriptions in the protected areas of Mombacho Volcano Nature Reserve and the ZapateraArchipelagoNational Park. Two months later, on Jan. 15, Estrada ordered a similar suspension on the inscription of all coastal properties within 800 meters of any body of water.

All property inscriptions in those areas are now to be handled on a case-by-case basis by the Attorney General’s Office.

The result of the two inscription freezes, which have just come to public light, has led to a confusing situation in which some 70 percent of the properties in Granada are now problematic, even if they’ve always had clear title, according to renowned Granada lawyer Ernesto Zambrana.

Instead of fixing the property situation, Zambrana said, the government has made it much worse.

“This is a case of the medicine doing more damage to the patient than the illness,” said Zambrana, a legal adviser to the Granada Mayor Office. “This is crazy. It’s confiscatory.”

According to fellow Granada lawyer Douglas Malespín, the order to suspend all inscriptions of coastal properties, as defined by the 1917 Agrarian Law, means that even the high-end homes halfway up Granada’s La Calzada, to about 30 meters east of Zoom Bar, would now be considered state property. “Even the Guadalupe Church would be included, because it is within 800 meters of the lake,”Malespín said. “It has created a situation where even if you were given a house in that area, it would cost you too much because it would mean getting you involved in problems.”

Zambrana said similar memorandums have been issued in other departments, meaning that now all of OmetepeIsland is considered state property, as are all development projects within 800 meters of the ocean and virtually all of San Juan del Sur.

The government memo is so crazy, he said, that it even questions the very agrarian reform titles that the first Sandinista government issued to cooperatives in the 1980s – all of which are now subject to review by the regional Attorney General’s Office.

“This clashes with the constitutional righ to private property,” the lawyer said. “This is putting the breaks on investment.”

The lawyer said the problem is not that the government is trying to take possession of private property, but that it’s not allowing new owners to register coastal property in their names. So properties that fall within nature reserves or 800 meters from the water can still be purchased legally, just not inscribed in the new owner’s name, which opens a whole Pandora’s Box of potential future problems.

“The original property owner could resell the same property to 10 different buyers because they wouldn’t be able to register it in their name,”Malespín said.

Properties outside of the restricted areas, such as in downtown Granada or coastal properties beyond 800 meters, are not affected by the measure.

Zambrana said the order from Attorney General Estrada is not legal, because the attorney general does not have the authority to issue such decrees. The problem, he noted, is that the chain of command is so rigid within the Sandinista government that anyone who disobeys the “memorandum” knows they’d be fired for doing so.

Still, he said, Estrada’s argument is not legally sound, because a law passed in 1996 set a new distance of 30 meters of stateowned property from bodies of water. That law, he said, replaced the old law that spoke of 800 meters of state-owned land.

The lawyers’ concern comes at the same time as the Foreign Investors and Developers Association has started to express serious  reservations about the future of the CoastalLaw, which was supposed to have sorted out all the overlapping legislation by clearly setting the limit at 30 meters and regulating coastal development, while at the same time ensuring the right to private property. The Coastal Law, which has been stuck in the National Assembly for years, could be voted on in the coming weeks (NT, May 9).

Ortega has ordered his Sandinista lawmakers to approve the law as soon as possible.

Lori Estrada, president of the foreign investors association, is now expressing serious concerns about the Sandinistas’ latest tinkering with the bill.

“Things are not going that well,” she said in an e-mail to association members last week. “(The Sandinistas) presented a different set of motions that do not reflect at all the position of the private sector.”

Namely, she said, they’re trying to change the state property limit from 30 meters of the high-tide mark to 300 meters – a difference that would affect most beachfront projects.


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