Honduras: Cadastral due diligence, what nobody tells you before to purchase your dream property

Written by: Paola Cantarero


Many are the doubts that concern a Human being that is looking for his dream house or a Company which is interested to purchase a land to make an important investment, everybody knows the importance to make a deep research at the Land Institute through out the deeds that make up the history of a property, in order to look up for a pending lawsuit, a seizure, a mortgage, or anything in the historical deeds that make us feel the doubt that property´s owner could be sued. Once all the registral due diligence is finished, normally we go for the next step, which is to make a cadastral due diligence at The Municipality, what it is very usual to research is about to know, if the cadastral property number is registered under the property´s owner who we are making the deal with?, if the cadastral property number has its tax clearance certificate?, and with all that clear normally we procedure to sign the deed of purchase, but, Can we do something more with the cadastral property number?, Have you ever being told, that the lack of a deep and exhausted cadastral due diligence, may you loose your investment? Let us tell you more:


You have made a deep research through out the property´s deeds and all its history, and what you have found make you feel comfortable with the results, cause apparently you have found your dreamt property, exactly what you have waiting for, that property where you can do the investment that it was on your mind for so many time, as the next step, you ask for the cadastral property number, What´s the next step with that number? This fact is very very important within the transaction? It is not what could be obvious, which is to verify the cadastral property number has its tax clearance certificate, or to check if the surface area of a property registered at the municipality is the same with the deeds you have been researching for, in fact it is, that is the fist thing you have to look up, but What about to go further?, By our experience as Bank´s and many important building developments attorneys around the country, we have noticed that there is a kind of research which it is not common by many of the lawyers when they area making a Property due diligence, and this is a non-hypothetic or exaggerated fact, it is because we have already found this kind of situation in some of our due diligences that we are interested to make you conscience about its importance; we are talking about to look up for the aerial pictures of the city that are in the cadastral department of the municipality, but what are we talking about? By our experience we have found that when you are researching about a specifically property by reading the deeds and the cadastral information given by The Municipality the property is located in some point of the city, and by papers it looks like everything is perfect, but when we have ask the authority about to be shown the cadastral property number location at the aerial pictures of the city, what a surprise!! The cadastral property number location does not match the deeds and the cadastral information given by paper with the aerial location, we are talking about the municipality has made a mistake to the moment when the cadastral property number was created, by given its location maybe by mistake to the neighboring property, or more suspicious, located so far where it is supposed to be, and when you look up for the correct property, the one that it is offered to you, in the aerial location has assigned another cadastral number and it is registered to another person, so, you have the follow scenario, you have a property with a deed perfectly registered at the Land Institute, a cadastral property number registered to the person you are making a deal with, and all the real property data match perfectly  but this cadastral property number is physically not located where it is supposed to be, so the cadastral property number is like a ghost withing the due diligence what it is definitely a red flag, cause, it turns your dreamt property into a litigious property by its cadastral property location, what means that if you buy it, you wont be able to have your permissions to develop you project cause the municipality will notice you that your property does not owe the cadastral number and that you will have to start an administrative procedure to make a research about who is the real owner of the cadastral property number and what type of documents does that other owner has; and what about if you find that the another owner has a deed perfectly registered at the land institute with the same description as your dreamt property but registered with a number and volume different than yours, better said that has purchase the property from another seller “apparently” with all the historic property correct, at that scenario you not will only have to star an administrative procedure, you will have to start a formal sued at the court, procedures for sure will last so many years and money, time during you won´t be able to make anything to the property, and by the time you will have a resolution, your investment probably will be collapsed, that’s why you have to be very careful about this type of researches, cause if the first one or the second scenario come out, it will be so detrimental to you.


We are totally sure this information will be so helpful to you and we hope you to implement it on your next property due diligence, for sure it will be worry-free to you.

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