The 'Promesa' Trap: A Legal Specialist's Guide to Seller Default in Ecuador

A Promesa de Compraventa is a binding preliminary contract. Its legal purpose is to create an obligación de hacer—a formal obligation for the parties to execute the final sale at a future date. It does not transfer ownership (dominio). Legal title only passes upon the signing and registration of the definitive Escritura Pública de Compraventa (Public Deed of Sale).

The Promesa is utilized when conditions precedent must be met, such as the buyer securing financing, the seller resolving a minor lien, or the completion of a topographical survey. While a private Promesa has some validity, for it to be enforceable in court, it must be executed as a public instrument before a Notary Public. A simple private document offers minimal protection and should be avoided at all costs.

The Deposit (Arras): Your Leverage or Your Liability?

Nearly every Promesa requires a deposit, legally termed arras. The treatment of these funds under Ecuadorian Civil Code is precise and depends on their classification, which must be explicitly defined in the contract.

1. Arras Confirmatorias (Confirmatory Deposit): This is the legal default and the structure I insist upon for my clients. It confirms the parties' intent to execute the contract. If the buyer defaults, they forfeit the deposit. Critically, if the seller defaults, they are legally obligated to return the deposit plus an equal amount as a penalty. This "double-your-money-back" provision is your primary financial recourse.

2. Arras Penitenciales (Penitential Deposit): This type allows either party to withdraw from the agreement. The buyer withdraws by forfeiting the deposit; the seller withdraws by returning the deposit plus the penalty payment. This clause effectively makes the Promesa an option contract and provides less certainty of closing.

Expert Pitfall: A poorly drafted Promesa that is ambiguous about the nature of the arras can lead to protracted legal arguments. Insist that the contract explicitly states the deposit is constituted as "arras confirmatorias" under the provisions of the Ecuadorian Civil Code.

When the Seller Defaults: A Strategic Legal Response

If a seller refuses to honor a notarized Promesa de Compraventa, your recourse is clear but requires precise execution.

1. Formal Demand (Requerimiento Notarial): Your attorney's first step is not a simple letter but a formal Notarized Demand. This serves as irrefutable proof that you have demanded compliance with the contract's terms and sets a clear deadline for the seller to either appear for closing or fulfill their payment obligation (return of the deposit plus penalty).

2. Mediation (Mediación): Before initiating a lawsuit, mediation is often a faster and more cost-effective option. An impartial mediator can facilitate a settlement based on the clear legal obligations established in the Promesa.

3. Executive Lawsuit (Juicio Ejecutivo): A notarized Promesa constitutes an executive title (título ejecutivo), which allows for an expedited legal collections process. Unlike an ordinary lawsuit, a Juicio Ejecutivo is designed for clear, undisputed debts. Your attorney will file to have the court order the seller to pay the contractually stipulated amount (deposit plus penalty).

4. Enforcement of Judgment: If a judgment is granted and the seller still fails to pay, the court can order the seizure and auction of the seller's assets, including the very property you intended to buy, to satisfy the debt.

Uncompromising Due Diligence: Your Shield Against the 'Promesa' Trap

The most effective way to handle a seller's default is to prevent it by identifying red flags before signing any document or paying any funds. My firm follows a strict, non-negotiable due diligence protocol.

The Essential Legal Checklist:

1. Title Verification and Lien Certificate (Certificado de Gravámenes y de Historia de Dominio): This is the foundational document. We obtain it directly from the Registro de la Propiedad (Property Registry) of the specific cantón (county) where the property is located. This certificate is not merely a summary; it is the official legal history. We scrutinize it for:

   • Mortgages (Hipotecas): Outstanding loans secured by the property.
   • Judicial Prohibitions (Prohibición de Enajenar): A court order forbidding the sale of the property.
   • Lawsuits (Demandas): Pending litigation that affects the title.
   • Correct Ownership: Verifying the seller's name exactly matches the registered owner.

2. Proindiviso (Undivided Co-ownership) Risk Assessment: This is a common and perilous situation in Ecuador where a property is owned by multiple parties in undivided shares. To sell, unanimous, written, and notarized consent from all co-owners (comuneros) is legally required. A Promesa signed by only one co-owner is unenforceable and a direct path to litigation. We verify all owners and secure their consent upfront.

3. Water Rights Verification with SENAGUA: For rural and agricultural land, water is everything. Water rights are not automatically transferred with land. The verification process is bureaucratic and precise. We directly contact the local demarcation office of the Secretary of Water Resources (SENAGUA) to obtain the Certificado de Uso y Aprovechamiento de Agua. We confirm the registered flow rate (caudal), the designated use (e.g., irrigation, human consumption), and that the permit is current and tied to the specific property's cadastral code (clave catastral). A promise of "plenty of water" from a seller is legally meaningless without this official certification.

4. Coastal and Environmentally Sensitive Zone Compliance: Properties near the coast are subject to complex regulations. Under the Ley Orgánica de Ordenamiento Territorial, Uso y Gestión del Suelo (LOOTUGS), municipalities enforce strict zoning. Any construction within the first 50 meters of the high tide line (línea de máxima marea) is generally prohibited, as this is public land (bien de uso público). Development within broader coastal protection zones often requires specific environmental permits from the Ministry of Environment, a process that can be lengthy and is by no means guaranteed. Do not accept a seller's verbal assurances.

5. Municipal Compliance Certificate (Certificado de no Adeudar al Municipio): This official document from the municipal finance department confirms that all property taxes (impuestos prediales) and improvement contributions are paid in full. Any outstanding debt constitutes a lien that would be inherited by the buyer.

Final Warning: The Illusion of Simplicity

The most dangerous mistake is treating the Promesa de Compraventa as an informal preliminary step. In the eyes of Ecuadorian law, it is a powerful binding contract with severe financial consequences for default. Without rigorous, independent legal verification of title, water rights, zoning compliance, and ownership structure, you are not making a deposit; you are making a high-risk gamble. The seller's character, reputation, or the real estate agent's reassurances are irrelevant in a court of law. Only documented facts and a meticulously drafted legal instrument can safeguard your investment.

Before you sign any document or transfer any funds, ensure your legal counsel has completed a comprehensive due diligence report. Your financial security depends on it.