PUERTO RICO Law and Practice Contributed by: Antonio J Santos and Donald E Hull, Pietrantoni Mendez & Alvarez LLC
tenant files for bankruptcy may be limited by the United States Bankruptcy Code. 6.20 Registration Requirements In Puerto Rico there are no execution formalities for leases. A lease of real property for a term of six years or more is, by exception, recordable in the Registry of the Property of Puerto Rico as an encumbrance affecting title to the real property. A lease of real property for a term of less than six years may also be recorded in the Registry of the Property of Puerto Rico by mutual agree - ment of the parties. In order to have access to the Registry of the Property, a lease agreement must either be: • executed directly in deed form before a notary public in Puerto Rico; or • set forth in a private document that may be: (a) executed in Puerto Rico and thereafter ratified and elevated to deed form before a notary public in Puerto Rico; or (b) executed by the parties before a notary public outside of Puerto Rico and there - after protocolised by a notary public in Puerto Rico. In each of the above-mentioned three meth - ods described, the public deed is prepared by a Puerto Rico notary public in accordance with the form requirements of the PR Notarial Act. Lease Recordation Costs Stamp taxes The PR Notarial Act requires that internal reve - nue stamps be cancelled on the original and the certified copy of the aforementioned deeds. The Internal Revenue stamp taxes for the original are calculated based on the transaction amount at the rate of USD2 for the first USD1,000 (or fractions thereof) and USD for every USD1,000
thereafter. The Internal Revenue stamp taxes for the certified copy are calculated at the rate of USD1 for the first USD1,000 (or fractions there - of) and USD0.50 per USD1,000 thereafter. The transaction amount used to calculate the Inter - nal Revenue stamps for a lease agreement is based on the aggregate rent to be paid during the entire term of the lease, including any exten - sion options. Recording fees The fees for recording a deed in the Registry are calculated at the rate of USD2 per USD1,000 (or fractions thereof) for the first USD25,000 and USD4 per USD1,000 for amounts in excess of USD25,000, plus a filing fee of USD25.50. The amount used to calculate the recording fees for a lease agreement is based on the aggregate rent for only the first 15 years of the lease. Notarial tariff In addition, the Notarial Law mandates payment of a notarial tariff to be calculated on the basis of the stated amount of the transaction (eg, the pur - chase price or the amount of the mortgage). For transactions with stated amounts not exceed - ing USD10,000, the applicable notarial tariff is USD150. With regard to transactions with stated amounts between USD10,000 and USD5 million, the parties may negotiate the notarial tariff, but in no event may the tariff be greater than 1% of the transaction amount or less than 0.5% of the transaction amount. For transactions with stated amounts of more than USD5 million, the par - ties are free to negotiate the notarial tariff but the tariff in those cases will never be less than USD25,000. 6.21 Forced Eviction Under Puerto Rico law, a tenant may be evicted pursuant to a summary judicial proceeding if an event of default has occurred under the lease
736 CHAMBERS.COM
Powered by FlippingBook