Anatomy of an Ecuadorian 'Promesa de Compraventa': Key Clauses to Protect Your Down Payment

For many expatriates, the dream of owning property in Ecuador—a coastal retreat in Manabí or a fertile hacienda in Imbabura—begins with a significant financial commitment. This is typically a down payment secured by a Promesa de Compraventa. This preliminary sales agreement is not a mere formality; under Ecuadorian law, it is a legally binding contract that, if improperly drafted, can expose unwary buyers to substantial financial loss and legal quagmires.

As a Certified Ecuadorian Real Estate Attorney and Land Specialist, I have seen firsthand how a poorly structured Promesa can jeopardize an entire investment. This document is your primary legal shield, the instrument where meticulous due diligence is memorialized and your capital is secured. It is the crucial step that distinguishes a secure acquisition from a costly mistake.

Understanding the 'Promesa de Compraventa' vs. the Final 'Escritura'

The Promesa de Compraventa (Promise to Buy and Sell) is a bilateral contract wherein the seller (promitente vendedor) and buyer (promitente comprador) legally bind themselves to execute a definitive sales deed (Escritura Pública de Compraventa) at a future date under specific terms.

Crucially, it is not the title transfer itself. The definitive transfer of ownership only occurs with the signing of the Escritura Pública de Compraventa before a Notary Public and its subsequent registration in the public land records. Per Article 1570 of the Ecuadorian Civil Code, for a Promesa concerning real estate to be legally enforceable in court, it must be executed as a public deed (escritura pública) before a Notary. A private, un-notarized agreement offers minimal legal recourse and should be avoided at all costs.

A valid Promesa must contain:

1. Full Identification of Parties: Legal names, Cédula or Passport numbers, marital status, and precise addresses. If a seller is married, their spouse must also sign, as marital consent is required.
2. Unambiguous Property Description: The description must be an exact match of the official records, including canton, parish, cadastral number (número de catastro or clave catastral), surface area, and specific boundaries (linderos).
3. Purchase Price and Payment Structure: The total price, the down payment amount, and a clear schedule for all subsequent payments.
4. Closing Deadline (Plazo): A specific date or timeframe by which the final Escritura must be signed.
5. Conditions Precedent (Condiciones Suspensivas): Specific conditions that must be met before the final closing, forming the core of your protection.

Critical Clauses to Safeguard Your Down Payment

The strength of your Promesa lies in its specific, negotiated clauses. These are non-negotiable for any serious buyer.

1. The Power of Arras Confirmatorias (Confirmatory Earnest Money)

In Ecuador, a down payment is legally defined as arras. It's vital to specify their nature:

• Confirmatorias (Arras Confirmatorias): This is the buyer's best protection. These arras serve as proof of the contract's execution and a part of the total price. If the buyer defaults without cause, they forfeit the arras. If the seller defaults (e.g., gets a better offer and refuses to sell), they are legally obligated to return double the amount of the arras received.
• Penitenciales (Arras Penitenciales): Avoid this. This type allows either party to unilaterally withdraw from the contract. The buyer loses their down payment, and the seller simply returns the down payment (often without penalty, unless specified), effectively creating an "option" for the seller to cancel the deal.

Expert Mandate: Your Promesa must explicitly state: “El valor entregado por el promitente comprador, se imputa al precio y se entrega en calidad de ARRAS CONFIRMATORIAS, en señal de conclusión del presente contrato.” (The value delivered by the promissory buyer is applied to the price and is delivered as CONFIRMATORY EARNEST MONEY, as a sign of this contract's conclusion.)

2. The Comprehensive Due Diligence Contingency Clause

This clause makes your obligation to purchase conditional upon the satisfactory results of a thorough due diligence investigation. It is your legal exit ramp if significant issues are discovered.

Hyper-Specific Detail #1: Verifying a Clean Title. Your attorney must obtain a Certificado de Historial de Dominio y Gravámenes from the Registro de la Propiedad of the specific cantón where the property is located. This is the single most important document in your due diligence. It must be dated within 30 days of signing the Promesa. It will reveal:

• The complete chain of ownership (tracto sucesivo).
• Any existing mortgages (hipotecas).
• Liens, court-ordered embargos, or prohibitions to sell (prohibiciones de enajenar).
• Lawsuits (demandas) filed against the property.
• Easements (servidumbres) or other use restrictions.

Hyper-Specific Detail #2: Confronting Co-Ownership Risks (Proindiviso). If the title certificate shows the seller owns only acciones y derechos (shares and rights), you are buying into a co-ownership situation known as proindiviso. This is a major red flag. It means the property has not been legally subdivided. Any co-owner, at any time, can legally petition a judge to force a public auction of the entire property (partición y remate). You could lose your investment for a fraction of its market value. The Promesa must be contingent on the seller delivering a fully subdivided and individually titled property (cuerpo cierto).

Hyper-Specific Detail #3: Securing Verifiable Water Rights. For rural properties, water is life. A seller’s verbal assurance of water is worthless. Legal water rights are granted by the Ministerio del Ambiente, Agua y Transición Ecológica (MAATE). You must demand a copy of the Resolución de Autorización de Uso y Aprovechamiento del Agua. The current bureaucratic process to obtain a new authorization is slow and complex, often taking over a year and requiring technical studies and public notices. Your Promesa should be contingent on the seller providing this registered permit, confirming the authorized flow rate (caudal) and usage rights (e.g., irrigation, human consumption).

Hyper-Specific Detail #4: Navigating Coastal Property Regulations. Ownership near the coast is governed by the Ley Orgánica de Ordenamiento Territorial, Uso y Gestión de Suelo. The generic "5-kilometer" rule is a common misconception. The law establishes a non-privatizable franja de protección (protection strip) of 50 meters measured inland from the high-tide line (línea de máxima marea). Any construction or private use within this zone requires a specific administrative authorization or concession from the relevant state authority, historically INMOBILIAR. The Promesa must be contingent on verifying the property is fully outside this restricted zone or that the seller possesses the required authorizations, which must be transferable.

3. Seller’s Representations and Warranties (Declaraciones y Saneamiento)

Do not accept a simple "as-is" (como cuerpo cierto y en el estado en que se encuentra) sale. Insist the seller legally warrants (saneamiento por evicción y vicios redhibitorios) that:

• They possess sole, unencumbered legal title.
• The property is free of all liens, mortgages, and disputes not disclosed in the title certificate.
• All property taxes (impuestos prediales) and municipal fees are paid in full. A Certificado de no Adeudar al Municipio must be provided.
• There are no hidden structural defects (vicios redhibitorios).
• The physical boundaries on the ground correspond exactly to the legal description and the attached survey (plano topográfico georeferenciado).

4. Annexes: The Paper Trail of Proof

A robust Promesa should reference and physically attach copies of all critical documents as annexes. This leaves no room for ambiguity.

• Seller's Cédula/Passport and Voting Certificate.
• The current Certificado de Historial de Dominio y Gravámenes.
• The Certificado de no Adeudar al Municipio.
• A recent, geo-referenced survey plan approved by the municipality.
• The MAATE water use authorization (Resolución de Autorización).
• Seller's payment of capital gains tax (impuesto a la plusvalía) if applicable.

Conclusion: From Promise to Ironclad Protection

The Promesa de Compraventa is the most critical juncture in your Ecuadorian property acquisition. It is where you shift from a prospective buyer to a legally protected investor. By insisting on a notarized agreement, incorporating clauses for arras confirmatorias, and making the contract contingent upon satisfactory, hyper-specific due diligence, you convert this document from a potential liability into an ironclad safeguard for your down payment. Never proceed based on verbal assurances. The only protection that matters is what is written, notarized, and legally enforceable within the four corners of this foundational contract.