An Ecuadorian Attorney's Guide to Due Diligence Costs: Who Pays for the Topographical Survey?

Acquiring real estate in Ecuador presents a compelling opportunity, but for expatriates, the path to secure ownership is paved with procedural nuances that can expose an investment to significant risk. A common point of negotiation—and frequent misunderstanding—is the allocation of due diligence costs, particularly for the essential topographical survey. As a certified Ecuadorian Real Estate Attorney specializing in land law, my objective is not merely to explain the custom, but to provide a strategic framework for protecting your capital. This is about transforming a potential liability into a tool for negotiation and title security.

The Foundation of a Secure Title: Why Due Diligence is Non-Negotiable

Before discussing cost, we must establish the legal principle: due diligence is the buyer's fundamental responsibility to verify the asset they are acquiring. It is not an optional expense but the cornerstone of a defensible title. These investigations are what separate a secure investment from a future lawsuit.

While the topographical survey (levantamiento planimétrico) is critical for verifying physical boundaries against the registered deed, it is only one component of a comprehensive title investigation. A complete due diligence process must include:

Title History and Lien Certificate (Certificado de Historia de Dominio y Gravámenes): This is the single most important document. It is not just a lien certificate; obtained from the Registro de la Propiedad (Property Registry) of the specific canton, it provides a complete chronological history of ownership (tracto sucesivo) and reveals any registered mortgages (hipotecas), liens (gravámenes), court-ordered embargoes (prohibiciones de enajenar), or lawsuits affecting the property.
Municipal Solvency: Verification from the municipal finance department (Dirección Financiera Municipal) that property taxes (impuestos prediales) are paid to date. Outstanding taxes constitute a primary lien on the property.
Zoning and Land Use Compliance (Informe de Regulación Municipal - IRM): This municipal certificate confirms the property’s zoning and dictates what can legally be built, including restrictions on height, density, and land use (e.g., agricultural, residential, commercial).
Water Rights Verification: Especially critical in rural areas, this involves verifying water access rights, which are legally separate from land ownership. This may require investigating permits from the Ministerio del Ambiente, Agua y Transición Ecológica (MAATE) or, more commonly, confirming active membership and rights with the local community water board (Junta de Administradora de Agua Potable).
Coastal and Environmental Regulations: Verifying compliance with national laws governing environmentally sensitive areas.

The Default Rule: The Buyer Bears the Cost of Verification

In Ecuadorian law and practice, there is no statute compelling a seller to pay for the buyer's due diligence. The seller's primary legal obligation, per the Civil Code, is to deliver a clean title (saneamiento por evicción) and be truthful about known defects. The burden of verifying the seller's claims falls squarely on the buyer.

Consider this legal parallel: the seller provides the escritura (deed) as their statement of fact. You, the buyer, hire the topographer and your attorney to audit that statement. Therefore, the costs associated with this audit—the survey, the legal review, and obtaining official certificates—are customarily the buyer's. This initial position is your strategic starting point for any negotiation.

Negotiating Due Diligence Costs: An Expert's Approach

While the buyer typically pays, a savvy negotiator can strategically shift some of these costs, particularly the topographical survey. Your leverage depends on the context of the transaction.

When the Seller Should Pay: If the seller is marketing a property with ambiguous boundaries or a very old deed that lacks specific measurements (linderos), you can argue that providing a recent survey is part of their obligation to clearly define the asset they are selling. Make it a condition of your offer: "My offer is contingent on the seller providing, at their cost, a georeferenced survey (levantamiento planimétrico georreferenciado) that confirms the registered area."
The 50/50 Split Compromise: This is a common and fair resolution, particularly for large or complex rural properties. Frame it as a mutual benefit: "Let's split the cost of the survey. It gives me, the buyer, peace of mind, and it gives you, the seller, a valuable, updated document for your property records, regardless of whether our deal proceeds."
The "Reimbursement Clause" in the Promesa de Compraventa: This is a powerful legal tool. The Promesa de Compraventa (a formal, notarized purchase promise agreement) can stipulate that the buyer will front the cost of the survey. However, if the survey reveals a significant discrepancy (e.g., the land area is more than 5% less than advertised, or there are encroachments), the seller must either rectify the issue at their expense or reimburse the buyer for the survey cost and other due diligence expenses if the deal is terminated. This protects the buyer's upfront investment.
Leveraging Existing (But Unofficial) Surveys: Often, a seller will have an older or informal survey. Do not accept this as definitive proof. Instead, use it as a negotiation point. "Thank you for providing your survey. To formalize it for the new deed, my surveyor will need to validate it in the field and place official boundary markers (mojones). Since you have already done the initial work, would you be willing to cover the cost of this official validation?"

Expert Insight: Specific Due Diligence Hurdles in Ecuador

As an attorney, I see expats make the same costly assumptions. Here are three hyper-specific areas where professional diligence is non-negotiable:

1. Coastal Property and the "8-Meter" Rule: The common reference to a "5-kilometer coastal restriction" is a dangerous oversimplification. The controlling law, the Código Orgánico del Ambiente, establishes a non-privatizable, public-access strip of land 8 meters wide measured inland from the high tide line (línea de máxima marea). Any construction or private ownership claim within this zona de playa y bahía is illegal and can be demolished by the municipality without compensation. Your survey must explicitly delineate this 8-meter line.

2. The Reality of Water Rights: Never assume water is included. For rural land, verifying a water permit (Autorización de Uso y Aprovechamiento del Agua) from the MAATE is only the first step. The bureaucratic process is slow and often backlogged. More importantly, you must conduct on-the-ground interviews to confirm the local junta de agua will grant you a connection point (puesto). A seller may have a permit on paper but have a terrible relationship with the water board, rendering the permit practically useless to a new owner.

3. The Proindiviso (Undivided Ownership) Trap: Be extremely wary of purchasing "rights and actions" (derechos y acciones) to a property. This is a form of co-ownership (proindiviso) where you buy a percentage of a larger, undivided parcel, not a specific, physically demarcated lot. Any co-owner can legally block you from building, demand a court-ordered sale of the entire property (juicio de partición), or sell their share to an undesirable third party. Without a formal, registered subdivision (lotización), you do not have a secure, independent title.

The Critical Difference: Promesa vs. Escritura

Another frequent point of catastrophic error is confusing a Promesa de Compraventa with the final deed.

Promesa de Compraventa (Purchase Promise): This is a binding, notarized contract that legally obligates the parties to execute the final sale at a future date for an agreed price. It does NOT transfer ownership of the property. It is a tool to lock in terms while due diligence is completed.
Escritura Pública de Compraventa (Public Deed of Sale): This is the definitive legal instrument, signed before a Notary Public, that transfers title. Ownership is only legally perfected once this escritura is registered in the local Registro de la Propiedad.

Never release the full purchase amount based only on a Promesa. The final payment should only be made simultaneously with the signing of the definitive Escritura Pública.

Conclusion: A Protected Investment is a Scrutinized Investment

The negotiation over who pays for a topographical survey is a critical early indicator of a seller's transparency and the overall health of the transaction. While custom dictates the buyer pays for their own verification, a skilled advisor can use the specific circumstances of the property to negotiate a more favorable arrangement.

Ultimately, these upfront costs are a small price to pay for certainty. A comprehensive, professionally managed due diligence process is the most effective insurance you can buy against title defects, boundary disputes, and future legal battles. Treat it not as an expense, but as the foundational investment in your Ecuadorian property.

Before you sign any document or make any payment, ensure your interests are legally protected. Contact our office for a confidential consultation on your specific real estate acquisition in Ecuador.