Real estate law in Cuba was regulated in 1988 by the General Housing Law (Ley General de la Vivienda) that established that the Cuban State has right of first refusal regarding any real estate property, thus limiting owners’ rights in terms of selling their homes. The only options available to the private real estate owners, in terms of transferring their property title, became swapping and donations. This generated a large number of illegalities, because by manipulating these two allowed methods of transferring real estate, (swapping and donation), de facto sales of homes were taking place in Cuba.
On November 2nd, 2011, partial modifications to the General Housing Law were published in the Official Gazette of the country, which represented a major achievement in terms of property rights in Cuba. According to the Cuban Government, the main purpose of these modifications was to help relieve the housing problem that Cuba is facing, decreasing limitations and simplifying the bureaucratic paperwork involved in the transfer of property title.
The new legislation focuses on the right of every owner to freely dispose of their property without the State´s mediation in the process. The modifications recognize sale, swapping, donation and adjudication – due to divorce, death or when the owner permanently leaves the country – of real estate property between Cuban citizens with legal domicile in the country and foreigners who are permanent residents in the country.
It is also important to clarify that despite these modifications, even though they represent an important step forward in Cuban Property Law, there is much that remains to be done in this area. Problems such as the access to information on the real estate market will be one of the challenges that the Cubans will have to face, because despite the fact the government has legalized real estate sales it still has not been created mechanisms of access to the real-estate market. To date, information related to the housing sales is limited to the inefficient databases available at offices of the State’s housing agency, and to the work of the “corredores”. These informal real-estate agents or “corredores” (as they are called by the majority of Cubans), gather together in popular spots of the city (in Havana City the most common place to see the corredores is the Paseo del Prado) with posters and pamphlets announcing the real estate that is for sale. The corredores put sellers and buyers in contact and charge a commission for this service.
Cuba is different in many ways and we should consider it as a unique country. Full of advantages and disadvantages in many areas, Cuba is trying to make positive changes. This major change in the area of property rights is a good example of this change.
Special note: although existing properties can be sold exclusively between Cubans and permanent residents, new golf and marina projects being developed in Cuba by Canadian firms will soon allow the sale of real estate to foreigners on 99 year and/or perpetuity land use. More to come…