Possession vs. Ownership in Ecuador: A Legal Expert's Guide to Securing Your Title

In Ecuadorian law, "posesión" is the physical occupation and control of a property with the intent of acting as its owner (animus domini). A person in possession (poseedor) uses, maintains, and may even build on the land. This is a state of fact recognized by our Civil Code, but it is unequivocally not the same as legal ownership.

While possession can, under the stringent and lengthy judicial process of prescripción adquisitiva de dominio (adverse possession), eventually lead to ownership, this is a complex lawsuit, not a guaranteed outcome. Simply occupying land grants no immediate ownership rights.

Common Scenarios Leading to Possession-Only Transactions:

• Informal Land Sales: A seller transfers "possession rights" (derechos posesorios) because they themselves lack a registered title. You are buying a problem, not a property.
• Inherited Possession: Families occupy ancestral land for generations, passing down physical control without ever formalizing the title through a probate process.
• Undivided Co-ownership (Proindiviso): This is a critical risk factor. A person owns a percentage (acciones y derechos) of a large, unsubdivided parcel. They may occupy a specific section, but they cannot legally sell that demarcated piece without the consent of all other co-owners or a formal, court-approved partition (partición). Purchasing such a piece gives you possession of a specific area but shared, problematic ownership of the whole.

The Inherent Dangers of Acquiring "Posesión":

Purchasing possession without title is acquiring a liability. The risks are absolute:

• Zero Title Security: The true, registered owner can appear at any time and reclaim the property, invalidating your claim and potentially leading to eviction.
• Inability to Sell or Mortgage: You cannot legally transfer or encumber a title you do not hold. The property has no value as collateral for financing.
• Permitting Roadblocks: Municipalities will not issue construction permits or other licenses without proof of legal ownership (dominio).

"Dominio": The Indisputable Right of Legal Ownership

"Dominio" is the absolute and legally recognized right of ownership. It grants the titleholder the full bundle of rights: to use (ius utendi), enjoy the fruits of (ius fruendi), and dispose of (ius abutendi) the property. In Ecuador, dominio is only established and proven through a two-step, non-negotiable process:

1. The Escritura Pública de Compraventa (Public Deed of Sale): This is the definitive legal instrument. It is drafted by an attorney as a minuta and then formalized and executed before a licensed Notary Public (Notario Público).
2. Registration in the Registro de la Propiedad (Property Registry): The notarized escritura must be physically registered in the cantonal Property Registry office corresponding to the property's location. This act of registration, known as tradición, is what legally transfers ownership and makes your title valid and enforceable against all third parties (erga omnes).

Unimpeachable Proof of "Dominio":

Before any funds are transferred, your attorney must procure and analyze the following from the specific cantonal Registro de la Propiedad:

• Certificado de Gravámenes Actualizado (Updated Encumbrance Certificate): This is the single most important document in any real estate transaction. It must be issued within 30 days of the closing. It officially confirms who the legal owner is and reveals any liens (gravámenes), mortgages (hipotecas), court-ordered prohibitions to sell (prohibiciones de enajenar), easements, or other limitations on the title. A "clean" certificate is paramount. To request it, one needs the full name of the owner or, preferably, the property's unique municipal cadastral code (código catastral).
• Certificado de Historial de Dominio (Title History Certificate): This document traces the chain of ownership over the past 15-20 years, allowing for a review of the title's legitimacy and uncovering potential historical defects.

The Expert's Due Diligence Checklist: From Ambiguity to Certainty

A professional due diligence process goes far beyond a simple title check. It is a comprehensive investigation to ensure you are acquiring a legally sound, unencumbered asset.

1. Forensic Title and Registry Verification:

   • Obtain a fresh Certificado de Gravámenes and Certificado de Historial de Dominio. We scrutinize these for any irregularities, ensuring the seller listed is the true registered owner and that no undisclosed encumbrances exist.
   • Cross-reference the title deed with municipal records (catastro) to confirm that the property's registered size, boundaries, and cadastral code are consistent. Discrepancies are a major red flag requiring rectification before purchase.

2. Regulatory and Land-Use Compliance:

   • Verify Municipal Zoning (Informe de Regulación Municipal - IRM): We obtain an official IRM report to confirm the property's designated land use (agricultural, residential, commercial, protected) and any construction limitations (setbacks, height restrictions, etc.).
   • Coastal and Border Restrictions: Foreign individuals are prohibited from owning land within 50 kilometers of Ecuador's national borders without prior authorization from the Ministry of National Defense, as mandated by the Ley de Seguridad Pública y del Estado. While there is no single "5-kilometer law" for coastal property, stringent environmental regulations and municipal rules govern the first 8 meters from the high-tide line (zona de playa y bahía), which is inalienable public land, and often have specific zoning for the adjacent areas.

3. Water Rights Verification (A Critical Step for Rural Land):

   • Water is not an assumed right. We investigate the legal status of any water source. The definitive document is an Autorización de Uso y Aprovechamiento del Agua issued by the SENAGUA (National Water Secretariat). The process to obtain a new authorization is bureaucratic and can take years, requiring a technical study by a certified engineer detailing flow rates (caudal) and intended use. Purchasing a farm property without a registered SENAGUA authorization for its water source is an enormous financial risk. We verify existing rights or advise on the feasibility of obtaining new ones.

4. The Contractual Framework: From Promise to Final Deed:

   • The Promesa de Compraventa (Purchase Promise Agreement): This is a binding preliminary contract. It locks in the terms of the sale and is used when conditions must be met before closing (e.g., clearing a lien). It obligates the parties to execute the final deed but does not transfer ownership.
   • The Minuta and Escritura Pública: Your attorney drafts the minuta (the legal text of the final deed), which is then incorporated by the Notary into the Escritura Pública. We ensure the language is precise, correctly identifies the property, and contains no ambiguous clauses before you sign. The final, registered escritura is your proof of dominio.

⚠️ Red Flag Warning: The "Possession Rights" Trap

The most common and devastating error is purchasing "possession rights" (derechos y acciones posesorias), often from informal sellers in rural areas. The seller may have genuinely occupied the land for decades, but what they are selling is not the land itself, but merely their place as its occupant. You pay for the property but receive no legal title, leaving you with an unenforceable claim and total exposure to the true legal owner. Always demand to see a registered escritura and insist on a current Certificado de Gravámenes. No certificate, no deal.

Conclusion: Your Investment Demands Legal Certainty

Investing in Ecuadorian real estate can be immensely rewarding, but this potential is only realized when built upon a foundation of legal certainty. The distinction between "posesión" and "dominio" is not a legal triviality; it is the absolute line between a secure asset and a catastrophic loss. As your legal counsel, my sole focus is to navigate these complexities, conduct exhaustive due diligence, and ensure that the property you purchase is transferred with clean, unassailable, and properly registered legal title (dominio).