Almost a year after the entry into force of Law No. 1129, Real Estate Brokerage Law, published in La Gaceta Diario Oficial No. 169, of September 8, 2022 and its Regulations contained in Presidential Decree No. 21-2022 Regulations of Law No. 1129, Real Estate Brokerage Law of Nicaragua, published in La Gaceta Diario Oficial No. 169, of September 8, 2022 and its Regulations contained in Presidential Decree No. 21-2022 Regulations of Law No. 1129, Real Estate Brokerage Law of Nicaragua. 1129, Real Estate Brokerage Law of Nicaragua, published in La Gaceta No. 212 of November 11, 2022, at Consortium Legal Nicaragua we want to provide you with some general aspects that you should take into consideration when selling your properties through brokerage companies in the country.
In accordance with Law No. 1129, the “contracting party” is the natural or juridical person, who subscribes a brokerage contract with the real estate broker, with the purpose of entering a legal real estate business, for example, administration and/or sale of properties.
In this sense, Law No. 1129 establishes that the contracting party must pay the real estate broker the economic retribution (commission) for the brokerage activities. These commissions, established in Law No. 1129, are in accordance with the nature of the legal business that is the object of the brokerage contract. In the case of contracts of sale, exchange, administration and/or any other exercise of real law contemplated in the legislation, the commission will be the amount that was agreed between the parties.
This is not the case of leasing contracts since the maximum commission will be the equivalent of one month of the rental fee, if the contract is signed for a term of one year or more. If the term of the contract is less than one year, the commission will be the amount of one month’s rent, divided by the number of months of the contract. Now, in the event that the real estate broker has reached an agreement with a third party for the perfection of the legal business established in the brokerage contract and this is not carried out due to a cause attributable to the owner or agent of the real estate, the real estate broker will not be entitled to a commission. However, he shall be entitled to the payment of the administrative, advertising, and promotional expenses incurred to date.
In the event of non-payment of the commission agreed between the contracting party and the real estate broker, the latter may enforce the payment of the commission through the corresponding judicial channels, using the brokerage contract signed.
During the sale process, it is usual that the potential buyer requires credits to local banks of his preference for the financing of the acquisition of the property and during the review of the credit committee may arise some problems with the property such as identification of differences in areas, outdated boundaries, among others, so we recommend that if you plan to sell your property, check the status of the same in Registry, Cadastre and Mayor’s Office. If you want to know a little bit more about this verification, we recommend you to access our podcast on “Concordance of the registry and cadastral information of properties in Nicaragua”. Accompany your sale process of a comprehensive legal advice with the appropriate advice for the subscription of your Brokerage Contracts. Contact us.