Navigating the Perils of 'Derechos y Acciones': A Share in Peruvian Property and Its Significant Risks for Foreign Investors

As a licensed real estate broker specializing in Arequipa, Peru, I frequently encounter foreign investors intrigued by the concept of purchasing "Derechos y Acciones." On the surface, it might appear to be an affordable entry point into the Peruvian real estate market. However, from an experienced and legal perspective, I must unequivocally state that investing in Derechos y Acciones carries substantial and often hidden risks, particularly for those unfamiliar with the intricate nuances of Peruvian property law.

This article aims to dissect the legalities of Derechos y Acciones, illuminate its inherent dangers, and provide a robust framework for due diligence should you consider such an investment – though, frankly, we often advise against it for a foreign investor seeking straightforward, secure ownership in Peru.

What Exactly Are 'Derechos y Acciones'?

In Peruvian law, "Derechos y Acciones" (literally "Rights and Shares") refers to the co-ownership (copropiedad) of an undivided property. It means you are purchasing a percentage share of a property that has not been legally or physically subdivided. You own a fraction of the entire property, not a specific, delimited portion of land or a particular building on it. Your ownership is abstract, representing a numerical stake in the whole.

This concept is rooted in the Peruvian Civil Code (specifically, Articles 969 onwards, which govern co-ownership or copropiedad). It typically arises from:

Inheritance: When multiple heirs inherit a property, they often become co-owners of Derechos y Acciones until a formal division is executed.
Family Land: Parcels of land owned by extended families over generations, where formal subdivision has never been pursued.
Informal Subdivisions: In some cases, owners might informally divide a large plot among family members or for sale without undergoing the rigorous legal process of formal urban habilitation (habilitación urbana) and subdivision (subdivisión) required by municipalities and SUNARP.

While this form of ownership is common in Peru, especially in rural areas or within older family estates, it presents a complex legal landscape that can be fraught with disputes and limitations, particularly for those seeking clear, independent title.

Why Do People Consider Buying 'Derechos y Acciones'? (And Why It's Often a Trap)

The primary allure of Derechos y Acciones is often its perceived lower price point compared to a fully titled, independent property. Sellers may market these shares as an "opportunity" to acquire land or property at a discount, with the promise of future consolidation or division. For local buyers, especially those with existing family ties to the property, it might represent a way to formalize their stake.

However, for a foreign investor, this perceived affordability often masks significant long-term costs and legal headaches. What might seem like a bargain can quickly devolve into an expensive, protracted legal battle or an unsellable asset. The sellers themselves may be motivated by a desire to liquidate an inherited asset that is difficult to manage jointly, or they may simply lack the resources or agreement among co-owners to undertake the formal and costly process of division.

The Labyrinth of Risks: Why 'Derechos y Acciones' is a High-Stakes Bet for Expats

Investing in Derechos y Acciones is inherently risky. For foreign investors, these risks are amplified due to language barriers, unfamiliarity with the Peruvian legal system, and potential difficulties in managing co-ownership dynamics from abroad.

Lack of Physical Delimitation and Exclusive Use: The most critical risk is that you do not own a specific, identifiable part of the property. Your "share" is an abstract percentage of the whole. This means you cannot unilaterally occupy a particular section, build on it, or claim it as your own without the explicit, notarized, and registered consent of all other co-owners, and usually, a formal division or a specific convenio de uso (agreement for use) registered at SUNARP. Any attempt to build or claim exclusive use without such comprehensive agreement and municipal permits is illegal and can lead to immediate legal action from other co-owners, forced demolition, and significant financial losses.
Co-Owner Disputes: The Single Biggest Threat to Your Investment: This is where the vast majority of problems arise. Imagine owning a property with several other individuals, some of whom you may not even know well, all with equal say:
- Decision-Making Paralysis: According to the Peruvian Civil Code, significant decisions regarding the property – such as selling the entire property, building major structures, undertaking a formal subdivision, or establishing a mortgage on the whole property – typically require the unanimous consent of all co-owners. For mere acts of administration (e.g., routine maintenance), a majority vote of shares may suffice, but even then, disagreements can paralyze effective management. If even one co-owner disagrees on a crucial matter, the process stalls indefinitely.
- Usage Rights: Disputes over who can use what part of the property, for how long, and for what purpose, are extremely common. Without a registered agreement for exclusive use, any co-owner can legally use any part of the common property, making planning for personal use difficult.
- Maintenance and Costs: How are property taxes (Impuesto Predial) and maintenance costs shared? While theoretically proportional to shares, if one co-owner defaults, the others may be legally liable for the outstanding balance to the municipality or service providers.
- No Unilateral Mortgage or Sale of Specific Parts: You cannot mortgage a specific portion of the property, nor can you sell a specific part to a third party without the agreement of all other co-owners and a prior formal subdivision. You can only sell your percentage share of the Derechos y Acciones, which is often difficult given the inherent risks to the next buyer.
- Forced Sales or Buy-Outs: A co-owner can legally initiate a process known as acción de división y partición (action for division and partition). If the property cannot be physically divided without significant devaluation (e.g., a small house, a single apartment), a judge might order its public auction, and the proceeds distributed among co-owners. While this provides a way out, it means losing control over the sale price and process, potentially resulting in a sale at below market value.
Financing Hurdles: Peruvian banks and financial institutions are extremely reluctant, if not entirely unwilling, to offer mortgages or loans against properties held as Derechos y Acciones. The lack of a clear, independent title and the potential for co-owner disputes make it an unacceptable collateral risk. This significantly limits your ability to leverage your investment or obtain funds for development.
Resale Challenges: Selling your Derechos y Acciones can be exceptionally difficult. Most informed buyers, especially foreign investors, will shy away from such a complex ownership structure. The pool of potential buyers is drastically reduced, often limited to other existing co-owners (who may negotiate a lower price) or highly speculative local investors willing to gamble on future division. This severely impacts your liquidity and potential return on investment.
Eminent Domain/Expropriation Issues: In the rare event of the property being subject to eminent domain (expropriation) by the state, the compensation process becomes significantly complicated. How is the compensation divided among co-owners? Reaching an agreement can be another source of dispute, delaying payment and potentially requiring judicial intervention.
Unregistered 'Derechos y Acciones': The Ultimate Red Flag: A particularly dangerous scenario is when the Derechos y Acciones are not properly registered at the National Superintendency of Public Registries (S.U.N.A.R.P.) in the name of the seller. If the seller merely has an "informal" agreement, a private document, or only holds posesión (possession) but not propiedad (ownership), there is no legal proof of ownership enforceable against third parties. This is an absolute deal-breaker. Always verify everything at SUNARP. Without proper registration of the Derechos y Acciones themselves, you risk buying nothing at all, or buying a share that has already been sold multiple times over, or a share that is legally disputed. In Peru, what isn't registered at SUNARP effectively doesn't exist for third parties.

The "Ideal" Scenario (Still Highly Risky): When All Co-Owners Agree to Partition

The only way to transition from co-ownership (Derechos y Acciones) to clear, individual ownership is through a process called Partición y División (Partition and Division). This process can occur in two ways:

Voluntary Partition: All co-owners unanimously agree on how to divide the property physically. This agreement is then formalized through a public deed (Escritura Pública) at a notary and subsequently registered at S.U.N.A.R.P. Once registered, each newly created parcel receives its own independent registry entry (partida registral), effectively dissolving the co-ownership. This is the cleanest, but often the most difficult, path due to the need for unanimous consent.
Judicial Partition: If co-owners cannot agree, any one of them can initiate a lawsuit requesting a judge to order the division and partition of the property. This is a lengthy, expensive, and emotionally draining legal process. The judge will evaluate the feasibility of physical division; if not possible, the property may be ordered for public auction.

Associated Costs of Partition and Division: Even with voluntary partition, be prepared for significant expenses:

Lawyer Fees: For drafting agreements, handling legal procedures, and representing your interests.
Notary Fees: For formalizing the public deed (Escritura Pública) of partition.
Surveyor Fees: To create accurate topographic plans for subdivision (planos de lotización) that comply with municipal regulations.
Architect/Civil Engineer Fees: For architectural plans and technical reports for urban habilitation and subdivision.
Municipal Fees: For permits and approvals related to urban habilitation (habilitación urbana) and subdivision (subdivisión) from the local municipality.
SUNARP Registration Fees: For registering the new independent partidas registrales for each resulting lot.
Alcabala (Property Transfer Tax): If, during the partition, one co-owner consolidates more than their original percentage of value (i.e., they receive a larger share than their prior percentage ownership), they may be liable for Alcabala on the excess value. This tax is approximately 3% of the sales value (calculated above 10 Unidades Impositivas Tributarias or UIT, which is currently PEN 5,150 for 2024, subject to annual adjustment).

Step-by-Step Due Diligence if You Must Consider 'Derechos y Acciones' (Strongly Discouraged Without Expert Legal Aid)

Given the profound risks, Arequipa Real Estate strongly advises against purchasing Derechos y Acciones unless you are extremely well-versed in Peruvian law, have a long-standing, trusting relationship with all co-owners, and have clear, legally binding agreements in place for future division. If you still choose to proceed, the following due diligence steps are absolutely non-negotiable:

Engage a Specialized Peruvian Real Estate Lawyer (Non-Negotiable): This is not a suggestion; it's a fundamental requirement. You need a lawyer experienced in property law and co-ownership disputes in Peru, preferably one based in Arequipa. Their expertise will be vital for navigating the legal complexities, interpreting documents, and protecting your interests. Do not rely on the seller's lawyer, who represents the seller's interests, not yours.
Verify Registration at S.U.N.A.R.P.:
- Obtain a Copia Literal: This is the full property history report from S.U.N.A.R.P. It will show who is currently registered as an owner, their respective percentages of Derechos y Acciones, and any existing encumbrances, liens, mortgages, or legal restrictions affecting the entire property.
- Confirm All Co-Owners Are Registered: Ensure the seller is indeed a registered co-owner and that their percentage aligns with what they are selling. If the "Derechos y Acciones" are not registered at SUNARP, walk away immediately. Any private document or claim of possession without registration does not constitute legal ownership.
- Check for Encumbrances on the Whole Property: A mortgage taken out by one co-owner on their share, or by all co-owners on the whole, will affect your interest. Any judicial lien (e.g., from a lawsuit) will also affect the property as a whole.
Identify and Verify All Co-Owners:
- Full Identification: Obtain verified copies of all co-owners' Peruvian National Identity Documents (DNI) or Foreigner's ID Cards (Carné de Extranjería).
- Legal Capacity: Confirm they are of legal age and capacity to sell their share.
- Relationship Dynamics: Understand the relationships between all co-owners. Are they family? Is there existing animosity? What are their long-term intentions for the property? This 'soft' due diligence is crucial for assessing the likelihood of future disputes or cooperation.
Review the Title History (Estudio de Títulos): Your lawyer must conduct a thorough review of the property's chain of title to ensure there are no historical defects, informal transfers, or unresolved legal claims that could jeopardize your investment. This includes checking past partidas registrales and municipal archives.
Assess the Physical Status and Regulatory Compliance of the Property:
- Zoning and Urban Planning: Consult the Municipality of Arequipa's urban planning department (Gerencia de Desarrollo Urbano) to understand the property's zoning classification and any restrictions (e.g., historical protection, height limits, use restrictions).
- Feasibility of Division: Can the property realistically be physically divided according to municipal regulations? What are the minimum lot sizes (lotes mínimos) for the zone? Is there proper access for all potential new lots (e.g., frontage to a public road)? An experienced architect or civil engineer may be required for this technical assessment and to prepare preliminary subdivision plans.
- Existing Structures: Are there any structures on the property? Are they legally built and declared (declaratoria de fábrica)? Who is using them? Unregistered constructions can lead to fines and complications during formalization.
Understand Potential Costs and Liabilities:
- Transaction Costs: Lawyer fees, notary fees, S.U.N.A.R.P. registration fees.
- Property Taxes (Impuesto Predial) and Municipal Fees: Ensure all past property taxes and municipal service fees (arbitrios municipales) are paid up to date. As a co-owner, you could be held liable for outstanding taxes and fees on the entire property, irrespective of your share.
- Future Partition Costs: If a Partición y División is planned, budget generously for the substantial costs detailed above, as these can easily add 10-20% or more to the initial purchase price.
- Alcabala: Remember the 3% property transfer tax on the value exceeding 10 UIT (approximately PEN 51,500 at 2024 values, subject to annual adjustment).
Negotiate Clear, Notarized, and Registered Agreements: If you proceed, ensure all agreements regarding the sale, future use, management, and eventual partition of the property are:
- In Writing: Comprehensive, unambiguous, and drafted by your independent lawyer.
- Public Deed (Escritura Pública): Formalized before a Peruvian Notary Public. This makes it a public document, verifies identities, and ensures its legal enforceability.
- Registered at S.U.N.A.R.P.: This makes your ownership public and binding against third parties. Unregistered agreements, even notarized ones, offer significantly less legal protection and can be difficult to enforce.

Local Context/Warning: Arequipa Specifics

Arequipa's unique characteristics add further layers of complexity to Derechos y Acciones transactions:

Historic Center Properties: Arequipa's Historic Center is a UNESCO World Heritage site, and properties within it are subject to stringent regulations from both the Municipality of Arequipa and the Ministry of Culture (MINCUL). Dividing or significantly altering a Derechos y Acciones property within this zone is exceptionally complex, often impossible without extensive, costly approvals that require unanimous co-owner consent. The preservation focus often clashes with subdivision desires, rendering some properties almost unsellable in parts.
Family Inheritances: Arequipa has a strong cultural emphasis on family and inherited assets. Many Derechos y Acciones properties stem from complex, multi-generational inheritances, leading to numerous co-owners who may be geographically dispersed, emotionally attached to the land, or have conflicting interests. This makes achieving unanimous agreement a formidable challenge, often dragging on for decades.
Municipal Regulations Beyond SUNARP: While SUNARP records ownership, the actual permissibility of any physical subdivision or construction is governed by the Municipality of Arequipa's urban development departments. Even with registered Derechos y Acciones, obtaining building permits or licenses for any work on a shared property will require unanimous co-owner agreement and compliance with municipal zoning. This often necessitates formal habilitación urbana and subdivisión processes, which are typically lengthy and expensive.

Practical Investment Strategy (Alternative)

For foreign investors seeking clear, secure, and hassle-free property ownership in Arequipa, we strongly recommend focusing on properties that already possess:

Fully Titled, Individual Properties: Look for properties with their own independent partida registral at S.U.N.A.R.P., registered solely in the seller's name or a single legal entity. These are typically simpler to verify and transfer.
Completed Partition and Division: If a property was previously held as Derechos y Acciones, ensure the Partición y División process has been fully executed, the new individual lots are registered at SUNARP, and each has its own independent partida registral.
"Propiedad Horizontal" (Condominiums): Investing in an apartment or unit within a legally established condominium building offers clear, individual ownership of your specific unit, along with defined rights and responsibilities regarding common areas, governed by a registered condominium regime.

For secure investment, well-established neighborhoods like Yanahuara, Cayma, and parts of Selva Alegre and Miraflores generally offer properties with clearer titles and established infrastructure, minimizing many of the risks associated with Derechos y Acciones. These areas often have a more organized urban development history.

Final Expert Opinion

While not illegal, the purchase of Derechos y Acciones is a complex and often high-risk endeavor for foreign investors in Peru. The potential for disputes, lack of control, and difficulty in liquidation often outweigh the initial perceived cost savings. At ArequipaRealEstate.com, our professional advice is to prioritize secure, independently titled properties to safeguard your investment and ensure a smooth, enjoyable experience in the beautiful White City.

⚠️ Legal Notice: Consult a Local Lawyer. This article provides general information and should not be considered legal advice. Peruvian property law is complex and constantly evolving. It is imperative to consult with a qualified, independent Peruvian real estate lawyer specializing in property law before making any investment decisions. They can provide specific advice tailored to your situation and ensure comprehensive due diligence.

For reliable property investment opportunities and expert guidance in Arequipa, visit us at ArequipaRealEstate.com.