Buying a house in Puerto Rico: steps, the notary and who you need

Disclaimer: Informational content only. Not legal, tax, financial or investment advice. Always verify with a licensed professional in Puerto Rico. Data comes from each firm's public website and may change.

What is different from the mainland

Puerto Rico follows a civil-law tradition, and it shows at closing. In most states a notary public mainly witnesses signatures. Here the notary is, by law, "the legal professional who exercises a public function" and gives faith and authenticity to the transactions executed before them: the notary receives and interprets what the parties want, gives it legal form and drafts the deed (Notarial Act of Puerto Rico, Act 75-1987, art. 2). Only attorneys authorized by the Supreme Court of Puerto Rico can practice as notaries (art. 7).

The same law says the notary acts with impartiality (art. 3), and its statement of purpose is explicit: in that role the notary is not the lawyer of either party and represents the law for everyone. If you want someone advising only you, for example to review the purchase agreement or negotiate repairs, hire your own attorney. The notary on the deed and your attorney can be different people.

After signing, the deed is presented to the Property Registry (Registro de la Propiedad), an office of the Department of Justice that publicizes transactions involving real estate. It has 29 sections around the island; online filing through its Karibe system is available only to authorized notaries, and registry fees are set by law based on the value of the transaction.

Step by step

1. Budget and financing. If you need a mortgage, talk to a mortgage lender or a bank before you make offers. You can check a mortgage institution's license in the OCIF licensee search (Office of the Commissioner of Financial Institutions).
2. Choose a licensed broker. Brokers, salespeople and real estate companies are licensed by the Board of Real Estate Brokers, Salespersons and Companies at the Department of State, under Act 10-1994. Ask for the license number and check it with the board. Real estate brokers in our directory list their service areas.
3. Offer and purchase agreement. Offers usually become an option or purchase-promise contract (contrato de opción or promesa de compraventa) with a good-faith deposit. Act 10-1994 requires brokers to keep deposits received from clients in an escrow account (cuenta en plica) at a bank authorized in Puerto Rico until the deal closes or ends.
4. Due diligence. A title company studies the property's record at the Property Registry for mortgages, liens and other encumbrances and may issue title insurance. Your lender will order an appraisal; an independent inspection and a check of the flood map are up to you.
5. Insurance. Lenders ask for property (hazard) insurance. If the home is in a FEMA Special Flood Hazard Area and the loan comes from a federally regulated or insured lender, federal law requires flood insurance; lenders can ask for it elsewhere too. Insurance agents and brokers are licensed by the Office of the Commissioner of Insurance (OCS); see insurance agents.
6. Closing. Buyer, seller and, if there is a loan, the lender sign the deed of sale (and the mortgage deed) before the notary. The notary then presents the deed to the Property Registry and the registry fees are paid.
7. After closing. If the home is your main residence, request the CRIM residential exemption (form AS-38). Under the Municipal Code it covers the tax on the first $15,000 of the property's valuation, measured at 1957 replacement costs, for one main home per owner; it must be requested, either with CRIM or through your mortgage lender.

Who does what

• Real estate broker: finds and negotiates the property, holds the deposit in escrow.
• Notary (an attorney): drafts and authorizes the deed, impartially, and presents it to the Registry.
• Your own attorney (optional): advises only you on the agreement and any problems found.
• Title company: registry study, title insurance, often closing or escrow agent.
• Lender: appraisal, loan approval, mortgage deed.
• Insurance agent: property and, when needed, flood coverage.
• CPA: tax questions about the purchase, rental income or a move under Act 60.

Moving to the island at the same time? The Relocation Center puts the guides and checklists in order, and the San Juan real estate page covers that market specifically.