On August 30, 2024, the General Directorate of Public Registries (DGRP) issued a key provision, Technical Registry Provision No. 06/2024, which marks a milestone in the protection of the rights of real estate buyers and developers in Paraguay. This provision enables a “Special Registry of Annotation of Purchase and Sale Tickets of Units” subject to the Horizontal Property regime, which will be dependent on the Horizontal Property Section of the General Property Registry.
This new registry is specifically designed to record the purchase and sale agreements for units built, under construction, or future functional or complementary units, providing increased legal security for both buyers and owners and developers. This regulatory effort is based on Law No. 677/60, which regulates ownership by floors and apartments, as well as its Regulatory Decree No. 2216/68.
The enabling of this registry is based on various national regulations, starting with Law No. 677/60 “On ownership by floors and apartments”, which regulates horizontal property in Paraguay. This law is complemented by Regulatory Decree No. 2216/68, which establishes the procedures and requirements for the registration and management of properties under this regime. In addition, the Technical Registry Provision takes into account Agreement No. 1033/2015, approved by the Supreme Court of Justice, which establishes the General Technical Registry Regulation of the DGRP.
Previously, regulations had already been established for the registration of sales contracts in subdivisions through Technical Registry Provision No. 7/2023, which was based on Law No. 3966/2010 and its amendments. However, the regulations applicable to sales contracts for units under the horizontal property regime required a more specific extension and regulation, which has been satisfied with this new provision.
Pursuant to Law No. 677/60, the sales contracts that are registered in this new registry must comply with a series of requirements detailed in the regulations. These requirements include: the complete identification of the contracting parties, the detailed description of the unit, the surface area, the sale price, the form of payment, the liens affecting the property, the conditions for the delivery of possession, and the conditions for the granting of the deed of transfer of ownership. This level of detail guarantees greater legal security for both buyers and developers.
A key part of this process is that registrations must be made exclusively by a public notary, which ensures legality and transparency in transactions. Once the bill of sale is filed with the Registry, the registration process can take approximately 20 to 30 business days, depending on the workload and other factors related to document review. This processing time offers an appropriate balance so that the parties can comply with all legal requirements and avoid future complications.
The main objective of this registry is to provide a higher level of legal protection to buyers of units in horizontal property, who will be able to have the assurance that their purchase and sale agreements are duly recorded and protected against possible legal or financial conflicts. This system will also facilitate access to financing for real estate developers, by providing a clear and reliable regulatory framework that encourages continued investment in the sector.
One of the most important aspects of this provision is that, once the purchase agreement has been registered in the new registry, the owner of the property will not be able to transfer or encumber the property without the express consent of at least 75% of the buyers. This is especially important in cases where the property is subject to sale in installments or when the developer needs to finance the construction through mortgages on parts of the project that have not yet been transferred.
Buyers will also have the right to demand the deed of transfer of ownership of the units acquired, even if the seller is in a situation of bankruptcy or civil insolvency. The provision provides exceptions in specific cases, such as prior embargoes or fiscal, municipal, or service-related or contribution liens on the property.
This mechanism is seen as an important step forward, as it reinforces buyers' confidence that their rights will be protected in the event of any eventuality affecting the developer or the original owner of the property. In addition, this new registry will be a key tool to avoid situations of fraud or legal conflicts related to the property and the rights of buyers.
Technical Registry Provision No. 06/2024 establishes that for the correct registration of sales tickets in the new registry, they must comply with a series of formal requirements, which include:
Complete identification of the contracting parties : Names, surnames, nationality, identity document number, marital status, and address of the contracting parties.
Detailed description of the property and the unit : Both the general identification of the property and the specific description of the unit must be specified, including its surface area and floor number within the building.
Sales price and payment method : The ticket must include the agreed sales price and the payment terms, whether in cash, in installments, or under some other financial arrangement agreed between the parties.
Liens on the property : It is mandatory to specify any liens on the property, accompanied by the corresponding official reports.
Conditions of possession and deed : The document must detail the conditions under which possession of the property will be delivered and the circumstances under which the final deed will be granted.
These requirements ensure strict control over the purchase and sale of units in condominiums, avoiding any ambiguity in contracts and protecting both buyers and sellers.
The real estate sector in Paraguay has experienced significant growth in recent years, driven by the demand for housing and commercial developments under the horizontal property regime. The creation of this new registry will allow real estate projects to continue expanding in an orderly and safe manner, providing guarantees to investors and promoting transparency in real estate transactions.
This provision seeks to encourage investment in apartment and flat building projects, providing buyers with greater security over their property rights. This, in turn, will encourage the continued development of real estate projects and help consolidate Paraguay as an attractive destination for both local and international investors.
The General Directorate of Public Registries has begun the implementation of this provision, notifying all real estate registry offices in the country, as well as other entities involved in the process, such as the College of Notaries and Lawyers of Paraguay. Likewise, the provision will be published on the institutional intranet of the DGRP and will be submitted ad referendum to the Superintendence Council of the Supreme Court of Justice for final ratification.
With this measure, Paraguay takes another step towards the modernization of its registry system and the consolidation of a safe and transparent real estate market. The implementation of the Special Registry of Notes on Purchase and Sale Agreements for Horizontal Property Units represents an important guarantee for the real estate sector and a sign of the country's commitment to economic growth and orderly urban development.
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