Unmasking the Peril of "Derechos y Acciones": A Warning to Foreign Investors in Ecuador

As a licensed Ecuadorian Real Estate Attorney and Land Specialist, I have dedicated my career to safeguarding foreign investors from the legal pitfalls that can turn a dream investment into a financial nightmare. One of the most perilous and misunderstood concepts is the distinction between holding a legally sound property title versus purchasing "Derechos y Acciones"—communal possession rights. For North Americans accustomed to clear-cut property laws, the latter is a legal minefield. This guide is not generic advice; it is a professional warning based on years of rectifying catastrophic mistakes made by unwary buyers.

The Core Distinction: Titled Ownership vs. Communal Possession

In Ecuador, absolute and defensible ownership of real estate is established by a single act: the inscription of a public deed, or Escritura Pública de Compraventa, into the official land registry, the Registro de la Propiedad, of the canton where the property resides. This inscription grants you dominio, or legal dominion, over a specific, surveyed, and legally defined parcel.

"Derechos y Acciones," which translates to "Rights and Actions," is entirely different. It does not represent ownership of a specific piece of land. Instead, it signifies that you are buying into a shared, undivided property, known legally as a proindiviso. You are acquiring a percentage stake in a larger, un-partitioned whole, alongside other co-owners (comuneros). You may have an informal agreement about which section you can "use," but you do not legally own it.

Why "Derechos y Acciones" is a Non-Negotiable Red Flag

Purchasing Derechos y Acciones is, from a legal standpoint, buying a future problem. Here are the specific, unavoidable risks:

1. No Legal Title or Defined Boundaries: You receive no individual deed for a specific plot. Your name is not on a title for "Lot A." You are merely a co-owner of a larger "mother property." Any physical boundaries—fences, stakes, or roads—are informal and legally unenforceable against other co-owners.

2. The Risk of Forced Sale (Partición Judicial): This is the most catastrophic risk of a proindiviso arrangement. Under Ecuadorian Civil Code, any single co-owner can legally demand the partition or public auction of the entire mother property at any time. This means a disgruntled co-owner you've never met can initiate a court action that forces the sale of the whole tract, including the portion you occupy. You would receive a percentage of the sale proceeds, but you would lose the land itself.

3. Impossibility of Permitting and Financing: You cannot obtain a municipal construction permit (permiso de construcción) for a property you do not legally own. Furthermore, no Ecuadorian bank will issue a mortgage against Derechos y Acciones because there is no specific, titled property to secure as collateral. Your investment is effectively frozen and illiquid.

4. Inability to Secure Essential Services: Municipalities and utility providers require a registered title and cadastral key (clave catastral) to establish new water, sewer, or electricity connections. Without an individual title, you are reliant on informal, and often illegal, connections from neighbors.

The Anatomy of a Secure Transaction: Titled Land Acquisition

A secure land purchase in Ecuador follows a strict, non-negotiable legal protocol designed to protect the buyer. An experienced attorney will execute every step.

Key Documents and Hyper-Specific Due Diligence:

• Certificado de Historial de Dominio con Gravámenes (Certificate of Title History and Encumbrances): This is the single most important due diligence document. It is not just a simple certificate; it is a complete legal biography of the property. I request this directly from the cantonal Registro de la Propiedad (e.g., of Manta, Cuenca, or Salinas) using the property's clave catastral. I meticulously scan this multi-page document for any red flags:

  • Hipotecas (mortgages)
  • Embargos (court-ordered seizures or liens)
  • Prohibiciones de Enajenar (prohibitions on selling, often from litigation)
  • Demandas (inscriptions indicating the property is subject to an ongoing lawsuit)
  • Servidumbres (registered easements or rights-of-way) A "clean" certificate is the first green light for any transaction.

• Escritura Pública de Compraventa (Public Deed of Sale): This is the definitive sales contract. It is far more than a simple agreement; it is a formal legal instrument executed before a Notary Public. It is distinct from a Promesa de Compraventa (promise to buy/sell), which is merely a preliminary binding contract to execute the sale at a future date. The Promesa does not transfer ownership; only the inscription of the final Escritura does.

• Coastal Property Regulations—A Specialist's Focus: For coastal land, due diligence becomes even more granular. Ecuador’s Ley Orgánica de Ordenamiento Territorial, Uso y Gestión de Suelo (LOOTUGS) establishes strict national regulations. I verify compliance with the mandatory 50-meter non-edificable public beach zone (franja de playa) measured from the high-tide line, and scrutinize any restrictions within the subsequent 150-meter área de protección. Building within these zones without proper authorization is illegal and can result in demolition orders.

• Water Rights Verification (Uso y Aprovechamiento de Agua): For rural or agricultural properties, water access is not a given. A seller's claim of "having water rights" is legally meaningless without official documentation from SENAGUA (the National Water Secretariat). The formal process involves submitting a solicitud de autorización de uso y aprovechamiento del agua to the correct Zonal Demarcation office. This requires a technical study proving the source, flow, and intended use. The approval process can take over a year and is not guaranteed. I insist on seeing the seller’s registered water use permit before my client signs any purchase agreement.

Red Flags That Scream "Stop the Transaction"

• The seller presents a hand-written sales document (papeleta de venta) or a private contract instead of a registered Escritura.
• The phrase "con derechos y acciones" appears anywhere in the property description.
• The seller is hesitant to provide the clave catastral needed to pull the official Certificado de Gravámenes.
• The price is significantly below market value. This is often a lure for legally problematic properties.
• You are promised that the individual title "will be sorted out after the purchase." This is a classic tactic to transfer the legal and financial burden of title regularization—a complex, expensive, and often unsuccessful process—onto the unsuspecting buyer.

The Cost of Neglect: A Case Study

I recently advised a client who had purchased a beachfront lot in Manabí based on Derechos y Accacciones. They invested $70,000 and began building a foundation. A few months later, another co-owner—a distant relative of the original seller living in another country—initiated a judicial partition. The court ordered the entire 10-hectare property to be auctioned. My client lost their specific lot and was left with a claim to a small percentage of the auction proceeds, which barely covered their legal fees, let alone their initial investment and construction costs. This was a completely avoidable tragedy.

Your Non-Negotiable Due Diligence Checklist

My team and I conduct this process for every client. Do not proceed without these steps being completed by your attorney:

1. Title Chain Verification: Obtain and review the Certificado de Historial de Dominio con Gravámenes going back at least 20 years to ensure a clean and unbroken chain of title.
2. Municipal Compliance Certificate: Secure a Certificado de Avalúos y Catastros from the municipality. This confirms the official property valuation, size, and that the property is not in arrears on taxes (impuestos prediales). Unpaid taxes constitute a primary lien.
3. Physical vs. Legal Survey Comparison: We commission an independent survey with a GPS-equipped drone or a licensed topographer and legally compare the results against the coordinates and boundaries described in the Escritura and municipal cadastral map. Discrepancies are a major red flag for disputes.
4. SENAGUA Water Permit Verification: For any property requiring its own water source, obtain direct confirmation from SENAGUA of the existence and good standing of the water use authorization.
5. Zoning and Land Use Confirmation (Informe de Regulación Municipal): We obtain an official report from the municipal planning department to confirm that your intended use (e.g., residential, commercial, agricultural) is permitted on the property.

Conclusion: Insist on Absolute Legal Certainty

Ecuador is a land of immense opportunity, but that opportunity is only realized through diligence. The allure of a cheap and easy transaction involving "Derechos y Acciones" is a siren song leading directly to legal and financial disaster. As an Ecuadorian attorney specializing in land acquisition for foreigners, my most fervent advice is unequivocal: Reject any offer that does not come with a clear, individual, and registered Escritura Pública. The security of your investment and your peace of mind depend on it. Insist on legal certainty; accept nothing less.