Hello to everyone:
Currently I’m becoming active investing in foreclosures in Puerto Rico. I understand that in the States the preferred way to hold and convey real estate in through irrevocable land trust, however, when I met with a local lawyer specializing in land trust in PR he told me the structure used by most investors in US was not allowed here and that land trust were irrevocable in Puerto Rico. Furthermore, he mentioned to me that if was able to present to him the structure used of those investor (their contracts and procedures) he might find a similar way to overcome this problem.
The way I learned was useful to obtain ownership of real estate “subject to” was that the person will be the grantor of the house, you the investor will put your corporation as trustee, and finally the seller will be the beneficiary. However, when setting the trust you will ask the seller to fill out another contract that will assign that beneficial interest to you (the investor). I would like to know if this procedure is correct and if anyone could provide me electronic samples to analyze an alternative way to deal with this legal entity in PR. I will appreciate your help since I have the urgency of completing these deals. Thanks to everyone and please let me know.
Regards,
Abraham Santiago
Abraham,
Your understanding is not correct. A land trust MUST always be revocable, not irrevocable. I will check this week to see how the landtrusts apply in Puerto Rico, or if they are even useful there.
The way it usually works is that the seller places the property into a land trust and he is 100% beneficiary. Once it is established and title is held in his trustee’s name, the property is now personal property. He then assigns you a beneficiary interest. By converting the beneficiary interest in a trust estate from real to personal property, such interest may be transferred by a simple written assignment, form, without public notice and without the expense and delay of procuring title policies.
Good luck.
Da Wiz
Da Wiz:
Thanks a lot for taking your time in answering my questions, your feedback is greatly appreciated. Wiz, do you personally use the structure you mentioned to me when buying “Subject to”. Also, if this lawyer is right and there is no irrevocable land trust in PR, what would you recommend me? I would like to know if it is possible to have communication with you through email or either phone is you are available someday this week. If not, I still appreciate your feedback.
Regards,
Abraham
Abraham,
I found out that Puerto Rico is under Spanish law and have nothing resembling land trusts in that country. So . . . I posted your question on the NARS board and here’s what I got for you.
Hi Abraham,
The EHT wouldn’t work in PR due to a old and not investor friendly spanish common laws. The trusts are irrevocable and also the trustee’s duties are stablished by theses old spanish laws. If you need references concerning PR laws please contact Zayda Perez at (787) 231-1444. She’s a lawyer and a good friend of mine. Good luck with the investing down there.
Carlos E. Cortes
P.S. Lived over 30 years in PR.
Good luck, Abraham.
Da Wiz