Derechos y Acciones (Rights and Shares):

Buying Property in Ecuador - addendum

Be aware if you are purchasing a property which the seller inherited, instead of purchasing directly themselves. If you buy such property, instead of receiving "clear title" directly in your name, you will get "100% of the rights and shares" in the property - known as Derechos y Acciones. 

In principle, this is similar to owning 100% of the shares in a corporation that owns the property.  In addition to owning "100% of the shares" you also have "100% of the rights" to the property - exactly the same as if you had the title directly in your name. Legally, this is still a very secure method of property ownership.

There is always some risk, however, that unknown heirs will come forth and put a claim on the property, and will ask for some portion of the share of ownership.

There a few things to consider in this situation:

• Your lawyer will ensure that the current owners are the legal heirs to the property.  The sellers will then sign a legal affidavit which states that they guarantee that there are no other heirs, and they will be responsible for defending the title from unknown parties who come forward claiming to be an heir.
• Title Insurance can be purchased, which will defend the title in case the sellers are not able to.
• If the original owner left a will which outlines all the heirs, that adds additional security to the transaction; it would be much harder for someone to claim to be a descendent of the original owner.
• There is a time period of 15 years after the death of the original owner for claims to be filed. After the 15 years have passed, the title can be converted back to clear title directly in the current owners name. (in the meantime, if you've sold your shares in the property to someone else, the subsequent owners can do this as well - whomever is the owner at the time). There is really no legal reason to convert the title, it is perfectly fine to continue to hold 100% of the rights and shares instead of direct title.

Fortunately, the initial title search will disclose if the current owners are the "original" owners that bought the property, or if they inherited it.  The transaction can be terminated immediately, if you desire, or you can proceed with the transaction - just make sure that your lawyer is comfortable that the sellers are the legitimate heirs, and make sure you get the affidavit from them stating that they will defend the title against claims.

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