This article begins with a horror story. We could consider this story hearsay, except we later confirmed the circumstances of it through a reputable local real estate attorney. I also have a career background as a financial analyst working with mortgage-backed securities, so I am well aware of the many issues that can present themselves in real estate-related transactions.

Having met many new expat friends here in Ecuador, I recently connected with a woman whose friends had moved here two years ago and purchased their retirement dream home. For the two years following the purchase of the home, the wife had been suffering from physical ailments caused by the high altitude of Cuenca, Ecuador, which is at an 8,500-foot elevation.

No Clear Ownership Title

They sold the home and found a buyer. To their shock and dismay, they found out during the sale process that they did not hold a clear title to their property and could not sell it.

To make matters worse, they had entered Ecuador on an Investor’s Visa and the purchase of that property guaranteed their residency.

They were also at risk of losing their visa residency.

I was told they had been trying to get their matter resolved with the help of more than one attorney, but I do not know what the outcome was.

Better To Rent First

There are several lessons we can learn from this story.

• First, it is better to rent in any area settle-in abroad for at least six to twelve months. There are many reasons that you may find to make you think twice about living there permanently. You are in a foreign country.
• Second, the laws and ways of doing business vary tremendously from those in the States, especially regarding the purchase of real estate.
• Much of the land has been owned by one family for hundreds of years. They passed the land down through generations, often with little or no documentation. There is no public records system as we know it in the States. The couple above found out they included their property in a perpetual lease agreement, which the landowner established generations ago to keep the property in the family.
• The methods used to define the boundaries of the properties can be primitive (metes and bounds).
• Finally, it is probably a good idea to work with a real estate attorney, although you must keep in mind they are used to doing business according to the laws of this country.

Read the Documentation Carefully

Ask questions! Make sure all documentation is in English and Spanish and read it carefully.

The building codes appear to be evolving in Ecuador.

If purchasing a property is over 25 years old, it might be a good idea to order and pay for a structural or geological survey and to have the electrical system inspected.

Last but not least, make sure the transaction is legally completed and any and all transfers of funds are handled through a bank and are correctly documented.

Be proactive.

This is not how you would want your retirement dream to turn into a nightmare.

If you’ve purchased a property in Ecuador, we hope the process was a smooth one. Share your experience with others.

by: Cathy McKay