Legal autonomy of the property in Uruguay

LEGAL AUTONOMY OF THE PROPERTY:

THE HORIZONTAL PROPERTY

The property was defined by the Civil Code, as urban or suburban property and the estate or fraction of the field (Art. 463 of the CC). They will acquire identity as such, when graphically and legally they can be considered "independent properties". The concept of independence and identity of the property is established modernly by articles 3 and 4 of the aforementioned decree No. 318/995, which the aforementioned articles define as “plot” is exactly in line with what we have called “independent property”.

THE PRINCIPLE OF

The horizontal property system is one that recognizes that an apartment, a material part of a building can, validly and effectively, be the object of individual control and business devices, and that legal status is acceded in our law in one of the following ways:

one-

The system can be accessed by constructing a building in accordance with the requirements of Law 10751 and the municipal ordinances that regulate this form of construction. In other words, the owner of the land requested permission from the municipal government to build by the 10751 system, attaching the construction plans and descriptive reports required by municipal ordinances.

Once the building is finished and inspected by the municipal government, the building will be enabled in accordance with law 10751.

The proof of municipal authorization is stamped on the respective construction permit and on the horizontal subdivision plan, prepared by the surveyor and attached to said permit.

From that moment, the property has the quality or status of horizontal property.

Of course, this plan must also be registered in the Cadastre, but the legal quality of horizontal property is acquired with the municipal proof of authorization (art. 30 of law 10751).

2- Adaptation of the existing building to law 10751.

The system can also be accessed by adapting an existing, commonly owned building to the rules of horizontal ownership.

The building owner must strictly comply with the construction requirements imposed by the municipal administration. The procedure similar to that indicated above (art. 30 of the law).

3- Incorporation to the horizontal property.

Another way to access the system is by incorporating a common property building into the horizontal system, although the building does not strictly comply with the municipal regulations on construction standards.

The system of incorporation to horizontal property of buildings of common property, is today regulated in Decree-Law 14261 of September 3, 1974, more precisely in Chapter 1 of said law.

The general conditions for incorporation are indicated in art. 1: it must be buildings with authorized construction permits before the law comes into force and with the minimum areas required by said article.

The art. 179 of the budget law, No. 17296 of February 21, 2001, amended and redrafted art. 1 of Decree-Law 14261 of September 3, 1974.

From the effective date of the amending law, the buildings that can be incorporated into horizontal property in accordance with the provisions of chapter 1 of said decree-law, are those whose construction permit was authorized before January 1, 1995.

The requirements for incorporation are specified in art. 5 which requires:

a- Plane of horizontal fractionation registered in Cadastre;

b- That the fire insurance provided in the law be contracted;

c- That the co-ownership regulation be granted.

The birth of the horizontal property in the cases of incorporation and therefore the acquisition of "legal autonomy" of the apartments occurs at the time that said regulation is registered in the property registry, real estate section of the department of establishment of the property (law 16871, art.6).

This law also rules out the intervention of the municipal administration (art. 5 literal b).

Consequently, with the purpose of the law to facilitate the acquisition by the occupants of the apartments, said legal norm established the "relative inalienability" of said apartments. Its units can only be acquired by its occupants on the date of incorporation (art. 8); and this circumstance must be controlled by the notary authorizing the alienation, who must also record what the law calls “Enabling legal ground” (art. 10)

The relative inalienability, that is to say, the alienation only possible in favor of a certain person, leads him to hold a "right of preference" to acquire (art. 9); Preferential right that you can only lose if you reject the appraisal made by the Banco Hipotecario del Uruguay during the sale dealings (art. 20) or if you are convicted in the process that the owner promoted by differences arising from these negotiations (art. 24 inc. 2).

A later law declared, by way of interpretation, that said right of preference may be waived by its owner (art. 12 literals a and b of Decree Law 14560 of August 19, 1976).

4- Early entry to the horizontal system.

In order to promote construction, decree-law 14261 allows in its chapter 3, the entry to the horizontal property system of buildings not yet built, simply projected or in the initial phases of its construction. The regime is exceptional and is established only in cases in which the construction of the building is financed with loans granted by the Banco Hipotecario del Uruguay (art. 34 of Decree-Law 14261)

Said art. It states that "for the sole purpose of such loans" it will be understood that there is horizontal property once the following requirements have been met:

a) That the construction permit had been grantedb) That the "plan for horizontal subdivision project" of the building to be built had been registered in a cadastre c) That the Cadastre had carried out the enumeration and granted the provisional real value of the units to be built.d) That the co-ownership regulation has been granted in accordance with the indicated projects (art. 34 of Decree-Law 14261)

In order to facilitate the construction of buildings as much as possible, art. 35 of the law grants the BHU exceptional powers, allows it to dispense with the construction permit, the collation and registration of plans and the provisional appraisal, if the circumstances provided for in the law were to occur, the BHU being able to replace the Municipal Government and Cadastre, until completion of the construction of the building (art. 34 inc. 3 of the law)

The law establishes that all this documentation must be ratified after the registration of the final plans, but it imposes the ratification only in the case of verifying differences between the data that emerges from the "projects" and those that result from the final plans.

Currently, law 16760 of July 16, 1996, extends the regime of chapter 3 of decree-law 14261 for construction loans granted by financial intermediation institutions included in art. 1 of Decree-Law 15322 (Private Banks)

The law establishes in its art. 2, the same form of access to the horizontal system as that established in Chapter 3 of Decree-Law 14261 but did not grant private banks the powers of exception that the latter law granted to the BHU.

ANOTHER FORM OF ACCESS TO THE HORIZONTAL SYSTEM

Condo developments: background

Before the validity of the so-called "second emergency law"; Law No. 17,292 of January 25, 2001, had been organizing, in fact, in various places in Paisa, the so-called country clubs or closed neighborhoods.

It consisted of organizing within a closed or fenced area or surface, the construction of houses and residences destined for recreation or tourism or even for permanent housing, complemented with buildings, open spaces, streets or roads and other elements of ¨infrastructure ¨, destined to satisfy the common needs of the inhabitants of the neighborhood.

These building complexes have been developing outside of any regulatory framework that regulates their construction and operation. As the units or lots destined to the individual domain lacked legal autonomy and consequently, it was legally impossible to transfer them to third parties, these private urbanizations were organized as ordinary condominiums of contractual origin or as public limited companies. The purchasers were disposed of: either the quota ava undivided part in the condominium or shares of the corporation, owner of the entire complex. In any of the cases, the use and enjoyment of the individual lot was assured to the acquirer, by means of an internal regulation of use and enjoyment, merely compulsory.

Legal regulation

Law No. 17,292 establishes in its articles 48 to 55, a regulation of horizontal property, to which these country clubs or serrated neighborhoods have recourse, to organize and function. Unfortunately, the law does not make its provisions mandatory for the organization and operation of these developments. The law expresses in its art 48¨… they may be governed by the horizontal property regime, which implies that these urbanizations could be organized and function with a different statute. Also article 55 makes the statute optional, for the urbanizations already existing before the law, when expressing… they will be able to adapt and protect themselves under the regime that is created… ¨. Articles 48 to 55 of Law No. 17,292 were regulated by Decree No. 323/001 of August 21, 2001.

The statute of horizontal property

The horizontal property statute applicable to these private developments is established in article 50 of the law. This article states: Each owner will be the exclusive owner of his lot or unit and co-owner of the goods affected by common use; ¨ The joint ownership of common property is inseparable from the ownership of each lot or unit; They will be common goods, those destined for the use and enjoyment of all the co-owners, such as:… ¨. The provision of this article coincides conceptually with the provisions of articles 2, 3 and 4 of Law 10,751, which contains and develops the statute of horizontal property. However, the aforementioned art 50 has its utility to ratify the specialty and originality that this statute implies with respect to the original statute of 1946.

Individual goods and common goods

The original statute of horizontal property distinguishes between individual and common property (arts 1 to 4 of law 10,751); subsequent laws maintained the distinction and this law is not an exception (art 48 inc 2 of Law 17,292).

The law defines condominium developments as: ¨all real estate complex divided into multiple assets or lots subject to individual ownership complemented by an infrastructure of real estate and common services, object of joint ownership and co-administration by the owners of the individual assets (art 48 inc 2o). The horizontal property unit is in this law the ¨lot¨ or ¨fraction of land, delimited on the plane as an individual fraction¨ (art 49), whether or not it has constructions. Its individualization will be done in a similar way to that of the known horizontal property: ¨ matrix pattern and unit number ¨, separated by hyphen. This is one of the originalities of this law: in the original law on horizontal property, land constituted the common good par excellence (article 3 of Law 10,751).In this Law No. 17,292, we witness the novelty of the loss of "prominence" of the building as a good for horizontal division and the loss of the intangibility of the land as an indivisible common good. Here the divisible into individual and common assets is the land itself and the building turns out to be an eventual element and not necessary to constitute the "lot", "independent fraction" or "unit" of horizontal property (art 48 and 49 of the law)."Independent fraction" or "unit" of horizontal property (art 48 and 49 of the law)."Independent fraction" or "unit" of horizontal property (art 48 and 49 of the law).

Settlement area of urbanizations

Another of the originalities of this law is that it carries, or can lead, horizontal property to the field.

Law No. 10,751 did not prohibit horizontal property from being located in a rural area, but from a sociological point of view, horizontal property emerged and developed as an exclusively urban phenomenon; and not only urban, but relative to large cities. Its appearance itself was determined by the need to take better advantage of the reduced urban territorial area, in response to the increasing concentration of the population in large cities.

Law No. 17,292 provides a statute for ¨urbanizations developed in urban, suburban or rural areas¨ (art 48 inc 1) and empowers the respective Municipal Government to ¨incorporate them to the category of urban or suburban¨ (art 48 final paragraph). In other words: That the law does not oblige the Municipal Government to incorporate the property into the urban or suburban area; therefore the Municipal Government may allow it to remain in a rural area.

Birth of the horizontal system

Access to the system of horizontal property or "horizontal state" will occur when the requirements listed in art 51 of the law are met:

a) The final authorization of the infrastructure works b) The inscription of the plan of measurement and horizontal fractionation, after the municipal "comparison" c) Granting and inscription of the regulation of joint ownership (art 50 inc 3)

The law takes constitutive elements from the previous laws; it is more demanding than Law 10.751, in which the system was accessed with the sole municipal authorization of the building (art 30 of Law No 10.751), Nothing says of the fire risk insurance referred to in article 30 of Law No 10,751; but it is clear that it is enforceable on infrastructure works, in accordance with the provisions of art 54 inc 1 of law No. 17,292, which makes applicable to this special statute of horizontal property the provisions of the other laws on the matter.

The horizontal state will then be born when the "infrastructure works" (common assets of the complex) are completed and enabled.

Pre-horizontal state

Law No. 12,358 of October 3, 1957 allowed to register in the General Registry of Inhibitions, the Unique section of Promises of Alienation of Real Estate in Terms, the commitment of sale of horizontal property units of buildings under construction (not yet enabled) and even from simply projected buildings. Article 9 of Law 12,358 gave new wording to art 15 of Law No 10,751, a wording that is still maintained today. The future horizontal unit was individualized from the graphic point of view in a "plan or sketch indicated", without registering, signed by a surveyor or architect. To this situation of the building and to the legal possibility of granting promises of registrable sale, the doctrine called "pre-horizontal state".

This Law No. 17,292 also organizes or provides for a state of pre-horizontality in article 53. The promises of sale of the horizontal units of this law could be registered if two conditions are met:

a) The existence of a "flat project" registered in the Cadastre b) Granting of the municipal construction permit for infrastructure works.

Advance of horizontal state

The horizontal status could exist even before the existence of the building, if the construction of said building were to be carried out with a loan from the Banco Hipotecario del Uruguay and said construction supervised by said Bank (art 34 of Decree Law No. 14,261). This provision was extended to buildings constructed with loans granted by private banks (art 2 of Law No 16.760).

According to this Law No. 17,292 when the financing of infrastructure works involves the Banco Hipotecario del Uruguay or a private bank, it will be applicable to condominium developments, the advance income to the horizontal state referred to in Decree Law No. 14,261, Chapter III and Law No. 16,760 (art 54 inc 2 of Law No. 17,292).

Unit determination

Once access to the horizontal system has been achieved by any of the procedures previously analyzed, the horizontally owned unit or apartment will obtain the “legal autonomy” or aptitude necessary to be the object of business devices.

The registration number of each unit is granted by the Cadastre in the registration certificate and real values that it issues when it returns the horizontal fractionation plan, that is, with the verification of registration and registration.

Said document serves as the basis together with the aforementioned plan, for the granting of the co-ownership regulation. The pattern number of the horizontal unit is made up of the pattern number of the land, which is called

parent register, separated by a hyphen of the unit number (art 4 of the decree of January 16, 1947). In cases where more than one building has been built on a site, each building is considered by the Cadastre Directorate to be an independent "block" and must be individualized with a capital letter (excluding the letters "Ch" and "LL").). In this way, the horizontal pattern of a unit will be integrated with the number of the land pattern, or matrix pattern, followed by the capital letter identifying the block and followed by the unit number. Thus, in a land registered with number 1000, unit 001 of the first building considered will have the following pattern number:

¨1000 / A / 001¨. The data that the law requires to individualize the land and the unit are those mentioned in article 41 of Decree Law No. 14,261.

All of them are extracted from the horizontal fractionation plan registered in Cadastre and from the cadastral certificate of registration and real values of the units. Both documents are used for the description of the units that is made in the co-ownership regulation.

The horizontal fractionation plane, which may be made up of one or more sheets, also contains a sketch of the location of the terrain or a measurement plane of the terrain. The referred certificate is only used for the granting of the co-ownership regulation.

In the dispositions of horizontal property units, it is customary to require the transferor, in addition to the property title of the unit, a copy of the horizontal subdivision plan and a copy of the joint ownership regulations; If the plan is made up of several sheets, you are asked for the sheet that corresponds to the floor or floor where the unit is located and the one that contains the sketch of the location of the land.

These documents complete the "title" of the unit and were delivered to the first purchaser of each unit.

The Co-Ownership Regulation

The co-ownership regulation is a regulation that specifies the rights and obligations of each individual owner of the units into which a building is divided (art 16 inc2 of Law No. 10,751).

It is granted in a public deed and must be registered in the Property Registry, Real Estate Section of the place where the property is located. It obliges not only its grantors, but also the acquirers of units that did not consent to it (art 16 inc 2 of NC Law 10.751). It must be granted by the owners of the units or by the promissory buyers with a registered promise (art 16 of NC Law 10,751). Decree Law No. 14,560 art 7 literal B, sets the special majority that is required for its granting or modification. In practice it is granted by the owner or owners who obtained access to the horizontal system.

Its granting is not mandatory when accessing the horizontal system due to construction or adaptation of the building in accordance with Law No. 10,751 (art 17). In the other forms of access to the system, its granting and registration is mandatory, since it constitutes one of the requirements that the law imposes to be able to access the horizontal statute (arts 5 literal D, 34 literal C, of Decree Law No. 14,261).

The technical-legal data set forth in the regulations are extracted from the registered measurement plan and horizontal subdivision, from the certificate of real values issued by the Cadastre and from the respective construction permit, if applicable.

The content of the joint ownership regulation can be divided into four fundamental parts: 1) A description of the land, building, horizontal units and material parts of the building, made based on the horizontal fractionation plan, the cadastral certificate of real values and, in its case, to the construction permit, in which the individual goods and common goods are listed and detailed. 2º) A statement specifying the rights and obligations of each individual owner. 3º) An organic part, in which the building authorities are established (administrator and assembly of co-owners, fundamentally), with a list of powers and operating regulations of the collegiate bodies. 4th)A series of clauses or proofs imposed by law or practical convenience, in which it is mainly envisaged: a) the granting of a reciprocal mortgage, which taxes each unit in favor of the owners of the other units, in guarantee of common expenses (art 6 of Decree Law NC 14,261); b) the control that the building has been insured against fires (art 5 lit C of Decree Law No. 14,261); c) the value of each unit, attributed based on the first real values set by Cadastre. This value invariably fixes the percentage of participation of each unit in the ownership of common goods.

This proportionality calculated with reference to the total value of the building is customary to be measured in thousands and also provides the distribution base of the contribution to the payment of common expenses. In the so-called "condominium developments", the share of the joint ownership or common property will be directly proportional to the surface of each lot or unit, unless another provision is established in the joint ownership regulation (art 50 inc 2 of Law No. 17,292); d)Lastly, a series of clauses required by the Banco Hipotecario del Uruguay, which although they are not mandatory, are required by said bank, as a requirement for the granting of loans with a unit's mortgage guarantee. They basically consist of the power of inspection given to Banco Hipotecario del Uruguay and the waiver of priority of the reciprocal mortgage in the event that a unit is executed by Banco Hipotecario del Uruguay by virtue of a subsequent mortgage agreed in favor of said Bank

DESCRIPTION AND DESIGN

Through the description and the delimitation, a property is perfectly specified and individualized in order to give security to the legal traffic.

First, the good is individualized, for example as common property, horizontal property, rural property, and then it is distinguished from the rest, its front is expressed, goods with which it limits, expressing the orientation of each of the elements that it is cited and its measurements, that is definitively demarcate.

The elements to take into consideration are:

The Department The cadastral section or locality Number of Padrón The Measurement Plan, with the expression of the Surveyor or Surveyor Engineer that has been made, the date of registration in the National Cadastre Directorate or departmental or local offices The area or surface of the property.

The data that are relevant for the purposes of the description and delimitation arise from the titles, the plans, the information released by Cadastre.

Normative

Civil Code.

Decree 252/98.

Law 14,261.

Law 10,751.

Law 17,292.

Bibliography

Miranda Fernando, Cycle of Conferences and Courses, AEU, Montevideo, 1985, p. 42.

Machado Julio Jorge, Theory and Practice of Horizontal Property, first edition, AEU, Montevideo, 2003, p. 26.

Álvarez Jorge, The Legality of Construction as Independent Units, IMM, year 2000, p. 5.

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Miranda Fernando, Cycle of Conferences and Courses, AEU, Montevideo, 1985, p. 5.