The Closing Process in Ecuador Explained: Who Does What on the Final Day of Purchase

Understanding the Ecuadorian Closing Framework

The closing in Ecuador is formalized through the escritura pública de compraventa (public deed of sale), the legally binding document that transfers property ownership. This is a solemn, official act that takes place before a Notario Público (Public Notary). Unlike in common law countries, Notaries in Ecuador are highly trained lawyers appointed by the state who act as impartial agents of the government. Their function is not to represent the buyer or seller, but to provide fé pública (public faith) to the transaction, ensuring its legality and validity before it is officially recorded.

Key Players and Their Roles:

1. The Buyer and Seller: As the principal parties, your presence (or that of your legally appointed representative via a Power of Attorney) is mandatory for signing the deed.

2. The Expat Real Estate Broker/Lawyer (Your Advocate): My dual role extends far beyond property showings. I am your fiduciary, your primary strategist ensuring all pre-closing due diligence has been impeccably executed. I verify that every term from the preliminary agreement is precisely mirrored in the final deed and, most critically, I scrutinize the last-minute documents—like the updated lien certificate—that arrive just before closing.

3. The Public Notary (The Legal Authority): The Notary drafts the escritura pública based on a preliminary draft, or minuta, typically prepared by the buyer's attorney. The Notary's office is the official venue for the closing. They review all supporting documents for legal compliance, witness the signing, collect certain taxes, and are responsible for initiating the registration of the deed.

4. The Property Registrar (Registro de la Propiedad): After the closing, the Notary submits the signed escritura to the Registro de la Propiedad in the relevant canton (e.g., Cuenca). This government office officially records the change of ownership in the public land records, finalizing your legal title to the property.

5. Your Attorney (Essential): While the Notary ensures the transaction's legality, they do not advise you on whether the terms are favorable or protect your specific interests. Your independent attorney drafts the minuta to your advantage, advises on tax strategy, and acts as your personal legal counsel, a non-negotiable layer of protection for any significant investment.

6. The Bank (If Financing is Involved): If you secure a loan from an Ecuadorian bank, their legal representatives will be present to register the mortgage simultaneously with the sale and disburse funds accordingly.

The Pre-Closing Due Diligence: A Foundation for a Secure Closing

A seamless closing is built on the bedrock of exhaustive due diligence. This is where transactions are won or lost. My team's pre-closing protocol is uncompromising:

• Title Search & Lien Certificate (Certificado de Gravamen): We don't just "check the title." We pull a Certificado de Gravamen Actualizado from the Registro de la Propiedad. Hyper-Specific Detail 1: This is the single most critical pre-closing document. It is an official certificate that confirms the property is free of all liens, mortgages, and legal prohibitions (prohibiciones de enajenar). Crucially, this certificate has a 60-day validity period. We always insist on a brand new certificate issued within 48 hours of the closing to ensure no last-minute encumbrances have been placed on the property.

• Municipal Records & Tax Clearance: We obtain a Certificado de no Adeudar al Municipio, proving all property taxes (impuestos prediales) are paid to date. Unpaid municipal taxes can become the buyer’s debt.

• Distinguishing Property Structures (Propiedad Horizontal): Hyper-Specific Detail 2: Ecuadorian law strictly differentiates between an independent property (a standalone house, or cuerpo cierto) and a unit within a condominium or apartment building (propiedad horizontal). If you are buying a condo, due diligence must include a thorough review of the building's master deed (Declaratoria de Propiedad Horizontal) and its internal bylaws (Reglamento Interno). We obtain a certificate from the building administrator confirming the seller is current on all HOA fees (alícuotas), as debts to the HOA can become a lien against your unit.

• Construction and Permitting: For any visible construction, we cross-reference the physical property with the municipal catastro (cadastral plan). Unregistered construction is a massive red flag that can lead to fines and legal headaches.

The Closing Day: Step-by-Step Procedures

1. Final Inspection: A final walk-through is conducted the day of, or the day before, closing to ensure the property's condition is as agreed and all included fixtures (cuerpos ciertos) remain.

2. The Notary's Office: All parties convene at the Notary's office. The Notary or their assistant will read the final escritura pública aloud to ensure all parties understand the terms.

3. Signing of the Escritura Pública: Once all parties confirm their agreement, you will sign the deed. The Notary verifies identities and co-signs, officially executing the document.

4. Payment of Taxes and Fees: At this stage, the buyer is responsible for payment. Hyper-Specific Detail 3: The primary tax is the property transfer tax, known as Alcabalas. In the province of Azuay, where Cuenca is located, this tax is currently calculated at approximately 1% of the higher of the two values: the purchase price listed in the deed or the municipal property valuation (avalúo catastral). We also pay notary fees and registration fees at this time.

5. Fund Transfer: Payment to the seller is typically made via a certified manager's check (cheque de gerencia) or confirmed wire transfer. For your protection, it is common practice to deliver the payment to the seller simultaneously with the signing of the deed.

6. Seller's Tax Obligations: Hyper-Specific Detail 4: While this is the seller's responsibility, a savvy buyer's representative ensures it is handled. The seller must pay plusvalía (capital gains tax) to the municipality. If the seller is an expat who has owned the property for less than five years, they are generally not exempt and the tax can be significant. Ensuring the seller settles this promptly prevents any potential, albeit rare, future claims or administrative issues related to the property's tax history.

7. Registration Process: The Notary's office sends the signed deed to the Registro de la Propiedad. This can take anywhere from a few days to several weeks in Cuenca. You are not the legal owner until this registration is complete. We follow up relentlessly until we have the final registered deed (escritura inscrita) in our hands, which we then deliver to you.

Real Estate Due Diligence Checklist

• Certificado de Gravamen Actualizado: Fresh title report confirming no liens or mortgages.
• Property Boundaries: Verification of physical boundaries against the official catastro.
• Certificado de no Adeudar al Municipio: Confirmation of zero outstanding property taxes.
• Building Permits: Verification of permits for all existing construction.
• HOA/Condo Clearance: For propiedad horizontal, certificate of no outstanding alícuotas.
• Seller's Legal Capacity: Valid ID and legal right to sell the property.
• Minuta Review: Thorough legal review of the preliminary deed draft by your attorney.
• Fund Verification: Confirmation of secure and traceable fund transfer method.

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

Unregistered Construction: This is the most common and dangerous trap for expat buyers. A seller may have added a beautiful terrace, an extra bedroom, or an entire second floor without obtaining the required municipal permits. This creates a severe discrepancy between the property's legal description on file and its physical reality. If you purchase such a property, you inherit the problem. This can result in substantial fines, a demolition order from the municipality, and an inability to sell the property in the future until the construction is legalized—a costly and bureaucratic nightmare.

During closing, if my review of the documents reveals that the declared square footage in the deed does not match a recent survey or the property's clear physical state, you must veto the closing. Do not accept verbal promises from the seller to "fix it later." The only secure way to proceed is to have the seller rectify the issue before closing, or to place a significant portion of the sales price in an escrow account with a clear legal agreement detailing the legalization process and costs.

Your Secure Path to Ownership

The closing process in Ecuador is formal, regulated, and designed to protect all parties when executed by a knowledgeable professional. My expertise as both a Broker and a Lawyer is dedicated to navigating these complexities on your behalf, ensuring that your dream home in Cuenca is acquired with absolute legal and financial security. We manage every detail, from deep due diligence to final registration, offering you unparalleled peace of mind.

Navigating international real estate requires specialized local knowledge. Don't leave your dream purchase to chance.

Schedule your free, property-risk consultation with us today.