PUERTO RICO Law and Practice Contributed by: Antonio Santos, Donald Hull and Paola Canino, Pietrantoni Mendez & Alvarez LLC
Pietrantoni Mendez & Alvarez LLC 208 Ponce de León Avenue 19th Floor Popular Center San Juan
Puerto Rico 00918 Tel: +787 274 4917 Fax: +787 274 1470 Email: asantos@pmalaw.com Web: www.pmalaw.com
1. General 1.1 Main Sources of Law The main sources of real estate law in Puerto Rico are: • the Civil Code; • the Real Property Registry Act; • the Notarial Law; and • Supreme Court of Puerto Rico jurisprudence. 1.2 Main Market Trends and Deals The real estate market in Puerto Rico during the past year was not immune to the economic uncertainty seen around the globe. As a result, investors were cautious and financing sources were conservative in applying underwriting standards. This led to a slowdown in new invest - ment in real estate, with certain notable excep - tions. The demand for luxury residential properties showed continued growth, stimulated in part by Puerto Rico’s tax incentives legislation aimed at motivating affluent investors to relocate to the Island. Also of note is the development of new and rehabilitated short-term vacation rental properties, the demand for which has increased with the resurgence of the tourism sector after the COVID-19 pandemic.
The development of new affordable housing was, and continues to be, a priority for the local government. Community Development Block Grant (CDBG) funds allocated to Puerto Rico by the US federal government, as well as fed - eral tax credit allocations and other federal pro - grammes, incentivised local banks to participate in the financing of a number of these real estate projects during the past year despite their low tolerance for risk in this particular sector. Although there are several ambitious hospitality projects in the pipeline on the Island, it remains to be seen whether they will come to fruition giv - en the continued economic uncertainty at both
the local and federal levels. 1.3 Proposals for Reform
There are currently no legislative proposals that would have a significant impact on the real estate market in Puerto Rico.
2. Sale and Purchase 2.1 Categories of Property Rights
The fee simple estate, leasehold estate and mortgage rights are the principal categories of property rights that can be acquired under Puerto Rican law. Other real property rights are
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