Title Insurance in Nicaragua
Is Title Insurance Reliable in Nicaragua?
One member recently asked in the discussion about real estate in Nicaragua and Costa Rica
What are your thoughts about...??
a) The true viability of tittle insurance in these parts.
It's hard for me to comment on a specific policy without seeing it and knowing the details. I can, however, give you my general impression. I think it would be foolish to rely on a foreign title insurance company in Nicaragua for anything - not for correctly analyzing a title, and not for defending what you think you are buying if later there are problems.
If you have money to lose, Nicaragua is an interesting place to lose it. If you keep your eyes open, you'll learn a lesson as you lose your shirt so it won't be a complete loss. But keep it a hobby.
If you don't have money to lose, Nicaragua would be a very poor choice to try to make it with your last fifty thousand, and a terrible place to make an "investment." Better to go blow 100 dollars at the showboat casino and learn your lesson, than to blow 50 times that "investing" in Nicaragua.
Let me give you a few examples of how title insurance can't help you. Suppose you buy a property of 20 manzanas. Suppose you get a survey done and the map and report verify that it is 20 manzanas. Great, right? But little did you know, that three of the property owners of neighboring properties have maps that overlap yours (all the best parts belong to two people, according to the papers). I am giving you this example because it is very common and I have personal experience with it. Now what is the title insurance company going to do? Send a letter to the police stating that the police have the obligation to throw the neighbors out when you find out the fence was moved? What's the police going to do? They'll tell you, "You've got to get yourself some fierce dogs and some guns." They'll laugh to each other as they're telling you, because they know that unless you have someone posted on that fenceline, that your neighbors will time and again steal your fence and move the posts. If you were Nica, they would try it, and if you properly fought back in a very serious way, they might stop. But for a foreigner, expect them to keep making inroads. Now what's the title insurance company going to do? They've verified: you're the true owner of 20 manzanas. Are they going to hire a hit crew to deal with your neighbors? Hardly. It's a shame that your fence was robbed 12 times, but why didn't you defend it better?
This is just one of the many types of problems that a title insurance policy will not help you to solve. There are many more, but this one is enough.
It may also help you to understand a little more about the Nicaraguan culture, in order to see the context for the land issues. Here's an extract from a recent article from La Prensa
"El nicaragüense se llega a preguntar si vale la pena vivir una vida digna de respeto y ejemplar si en esta sociedad, la reputación y credibilidad de uno es lo más fácil de atacar. La verdad es que la comuna nicaragüense es una con mucho afán y atracción hacia reportajes escandalosos con características amarillistas, suele creer cada chisme simple y sencillamente porque es un chisme, y descartan la necesidad de pruebas al contrario........... El problema es que en este país, las leyes pueden estar escritas, pero no nos apegamos a ellas, ni los ciudadanos, ni las autoridades"
for the original article -- http://www.laprensa.com.ni/blog/2008/12/05/eticanicaraguense.html
If you can't read the Spanish here you go:
"The Nicaraguan asks himself whether it is worthwhile to live a life worthy of respect when in this Nicaraguan society, the reputation and credibility of one is so easy to attack. The truth is that the Nicaraguan tends to believe outrageous stories and simple absurdities about someone, even in the face of evidence to the contrary ........... The problem is that in this country, we have laws, but we are not attached to them, not the citizens nor the authorities "
Until you verify this on your own, until you understand it and have a tested strategy to deal with it, you probably are not going to be able to make wise judgments in Nicaragua.
Just as a final note, it appears that in many cases the foreigners who work in real estate have incorporated the dishonest aspect of Nicaraguan culture.