Realtors say notary public law changes will harm real estate transactions
By The Star Staff
New amendments contained in House Bill 1416 to the Puerto Rico Notary Public Law related to the sale and purchase of properties will be harmful to consumers and will slow down real estate transactions, the Puerto Rico Realtors Association said Wednesday.
“It is unreasonable to impose these new requirements to notary public lawyers and to any person or entity that wants to sell or buy a property in Puerto Rico,” explained Ruby González, president of the Association of Realtors.
The proposed measure calls for buyers of houses, businesses, or land to spend money on a property appraisal, a title study and a measurement plan or ‘plot plan’. The amendments will affect property sales done in cash without financing. Buyers of property will also be required to disclose the origin of the funds with bank statements.
“These new and unnecessary requirements would substantially delay this transaction. A closing that could take one or two weeks, now with all this that they are adding, could take months”, González said.
The proposed changes, particularly that of requiring an appraisal and measurement plan that is not the same as a ‘plot plan’, are also burdensome for individuals and families who, for health reasons, emergencies, job changes, among others, choose not to be tied to property market prices.
“This new requirement forces them to appraise the property. The requirement of an appraisal or evaluation of value should not be enforceable or applicable to the totality or generality of the transactions, as a uniform mechanism that makes the granting of public instruments in the real estate sector more expensive and more difficult and onerous,” she said.
“We believe the requirement has the effect of adding costs, procedures and burdens to grantors and notaries. Puerto Rico is experiencing a time of economic and fiscal challenges, where we must stimulate and promote real estate transactions and other goods or services to flow, without the over-regulation of the State,” she said.
The measure is aimed at helping the Municipal Revenue Collection Center (CRIM) update its property appraisal roster. The CRIM is the entity in charge of collecting property taxes.
The Association said the CRIM and other inspection agencies have various mechanisms and regulations that, with more resources and more effective inspection, can maximize the income of the municipalities, without imposing these requirements that are so harmful to the consumer’s pocket and without disrupting the fluidity of real estate transactions.
The president of the Association, which brings together 900 realtors throughout the Island, also raised the flag about a requirement for the buyer to disclose the origin of the funds with at least six bank statements.
“We oppose this wholly unnecessary requirement. Existing regulations, including federal or local banking regulations, provide various mechanisms or ways to detect, channel or report illegal transactions. We do not support having notary public lawyers and grantors to take over a responsibility from various regulatory entities when the government already has regulations and agencies that can do that,” she said.
The Association will be participating in multiple meetings and negotiations with legislators from various delegations, to explain its opposition to the bill that severely disrupts the purchase and sale of properties on the Island.