Protecting Your Cuenca Investment: Navigating Property Size Discrepancies

As a seasoned Real Estate Broker and practicing Property Lawyer in Cuenca, my primary duty is to shield your investment from the latent legal and financial risks that often ensnare foreign buyers. One of the most common—and consequential—issues we navigate is the discrepancy between a property's listed size and its legally registered dimensions. This is far more than a clerical error; it's a critical flaw that can impact your title, resale value, tax obligations, and your fundamental property rights.

In Ecuador, the Escritura Pública (Public Deed) and its inscription in the Registro de la Propiedad (Property Registry) are the absolute sources of truth. A deviation between these records and the physical reality, whether in your favor or not, demands forensic-level scrutiny. Ignoring it is an invitation for future boundary disputes, challenges to your ownership, or the harsh realization that you’ve paid for "phantom" square meters you don't legally own. This guide details the meticulous process for identifying and resolving these discrepancies, ensuring your Cuenca purchase is built on an unshakeable legal foundation.

Understanding the Source of Discrepancies

Square meter discrepancies in Cuenca typically stem from a few common sources:

• Outdated Cadastral Records: The Cadastro Municipal (Municipal Registry) can lag behind reality. If a property hasn't been re-surveyed in decades, its official record may not reflect subdivisions, additions, or even natural boundary changes.
• Informal "De Palabra" Agreements: It's not uncommon for neighbors to have settled boundary lines with a handshake and a new fence line years ago, without ever legally formalizing the change through a deed modification. These informal arrangements are legally unenforceable.
• Unregistered Construction: This is a major issue in Cuenca. Owners frequently enclose patios, build additions, or add entire floors without obtaining the required municipal permits (permiso de construcción) and updating their property deed. The physical house is larger, but legally, the extra space doesn't exist, creating significant tax and resale problems.
• Errors in Original Surveys: Older surveying methods lacked the precision of modern GPS technology, leading to inaccuracies that are perpetuated in legal documents for generations.
• Distinction Between Property Types: There is a critical legal difference between a standalone home (propiedad independiente) and a condominium or townhouse (propiedad horizontal). In the latter, your deed specifies your private usable area (área útil) and your co-ownership percentage (alícuota) of common areas. Discrepancies can affect not just your apartment's size but also your share of maintenance fees (expensas).

The Crucial Due Diligence Steps

Your protection begins long before you sign anything. As your legal counsel and broker, I initiate a non-negotiable due diligence process designed to expose these issues.

1. Verifying Official Documentation: The Foundation of Truth

Our first step is to pull the core legal documents. We don't rely on copies provided by the seller; we obtain certified, up-to-date versions directly from the official sources.

• The Escritura Pública (Public Deed): This is the property's constitution. We scrutinize the legal description, specifically the boundaries (linderos) and the total registered area (superficie or cabida).
• The Certificado de Gravamen (Certificate of Liens & Encumbrances): This is the single most important pre-closing document. We obtain an actualizado (updated) certificate from the Registro de la Propiedad just days before the closing. It provides the definitive, current status of the property, confirming the legal owner, the registered dimensions, and revealing any mortgages (hipotecas), liens, or prohibitions on sale (prohibiciones de enajenar). A clean certificate is non-negotiable.
• Municipal Records (Ficha Catastral): We review the property's file at the municipality, comparing the city's registered size with the deed. We also check the pago del impuesto predial (property tax payment record), as the taxable area should align with the legal area.

2. On-Site Verification and a Professional Survey

Documents must be reconciled with the physical reality on the ground.

• Physical Inspection: During property visits, I am not just looking at finishes; I am walking the boundaries, comparing fence lines and physical markers against the linderos described in the deed.
• Professional Land Survey (Levantamiento Topográfico): When any doubt arises, or as a standard precautionary measure in high-value transactions, we engage a licensed Ecuadorian topógrafo (surveyor). This is not optional if a discrepancy is suspected. The survey provides a legally defensible report that precisely measures the land and compares it to the registered deed, forming the basis for any legal action or price renegotiation.

3. Analyzing the Discrepancy: Cuerpo Cierto vs. Reality

Once we have the survey data, we analyze the findings.

• The "Cuerpo Cierto" Principle: Most resale transactions in Ecuador are conducted como cuerpo cierto ("as a certain body"). This legal concept means you are buying the specific, defined property as it stands, irrespective of its exact measurements. However, while this protects sellers from minor variations, a significant discrepancy discovered during due diligence that points to misrepresentation gives the buyer powerful leverage to renegotiate the price or withdraw from the deal.
• Significant vs. Minor Differences: A few meters' difference on a large plot might be acceptable. A 20-square-meter shortfall on a 150-square-meter condo is a major financial issue.
• Unregistered Built Area: If the house is physically 200 sq. meters but the deed only reflects 150 sq. meters, you are buying a future problem. Upon resale, you cannot legally market that extra 50 meters. Furthermore, the municipality can eventually discover this and levy fines and back-taxes. This also complicates the calculation of plusvalía (capital gains tax), as the tax authority may assess the property's value based on its larger, physical size, while your legal cost basis is tied to the smaller, registered size, potentially creating a phantom gain and a higher tax bill.

Legal and Financial Safeguards

With the facts in hand, we embed protections directly into the legal framework of the purchase.

1. The Promesa de Compraventa (Promise to Purchase Agreement)

This is our primary tool for risk mitigation. It's a binding preliminary contract where we dictate the terms of the final sale.

• Contingency Clauses: We insert a specific survey contingency clause. This makes the final purchase conditional upon the property's actual surveyed area being within a certain small percentage (e.g., 2%) of the registered area. If the discrepancy is larger, the clause gives you the right to renegotiate the price on a per-meter basis or walk away with your deposit returned in full.
• Seller's Obligation to Rectify: The Promesa can obligate the seller to undertake and pay for the legal process of rectifying the deed (rectificación de cabida) before the closing date. This is often the cleanest solution, though it can delay the closing by several months.

2. Negotiating the Price and Closing Costs

A discrepancy directly impacts value and cost.

• Price Adjustment: If the property is smaller than registered, the price must be reduced. We calculate the agreed-upon price per square meter and apply it to the deficit.
• Closing Cost Awareness: Be aware of the impuesto de Alcabala (property transfer tax). In Azuay province, this is approximately 1% of the higher of the sale price or the municipal property valuation. Notary and Registry fees typically add another 0.5-1%. These costs are based on the legal value, so ensuring the price reflects the actual size is crucial to avoid overpaying on taxes and fees.

3. The Rectification Process

If the deed must be corrected, it's a formal legal procedure.

• The Process: It involves the new survey, municipal approvals, and the drafting of a new deed of rectification (Escritura Pública de Rectificación) by a Notario. This new deed is then inscribed at the Registro de Propiedad, officially correcting the public record.
• Cost and Responsibility: The costs for surveyors, municipal fees, the Notario, and registry inscription must be clearly assigned to the seller in the Promesa de Compraventa.

⚠️ Broker's Legal Warning: The Property Risk You Must Veto.

The most dangerous scenario is buying a property como cuerpo cierto without an independent survey, especially when there are obvious, unpermitted additions. You risk legally acquiring and paying for a 150 sq. meter home while inheriting the tax liabilities and non-transferable status of an additional 50 sq. meters. This unregistered space is a liability, not an asset. Never accept a seller's verbal assurances or old survey documents. Your only protection is a professionally drafted Promesa de Compraventa with a survey contingency clause tied to an up-to-date Certificado de Gravamen and a new, independent survey.

Conclusion: Certainty is Your Greatest Asset

Purchasing property in Cuenca can be a wonderfully rewarding experience, but it demands expert navigation. A square meter discrepancy is a red flag that signals the need for heightened legal and technical scrutiny.

My dual role as a Broker and Lawyer is to serve as your advocate, ensuring that the property you pay for is exactly the property you receive, free and clear of all encumbrances and future liabilities. By forensically examining the documentation, insisting on physical verification, and building ironclad legal protections into your purchase agreement, we convert potential pitfalls into a secure, transparent, and confident investment.

Are you considering a property in Cuenca and need absolute certainty about what you're buying?

Schedule your complimentary property risk consultation today. Let's secure your investment and your peace of mind.