Sold to an outsider: the co-owners’ and neighbours’ retracto

It is Chapter VI of Title VIII of Book Three of the Civil Code of 2020, Articles 1055 to 1059. It is the retracto nobody has to agree because the law grants it, and the Code names two holders here: co-owners and owners of adjoining lands.

A co-owner of a common thing where the share of all the other co-owners, or of one of them, is transferred to an outsider, and an owner of adjoining lands on the sale of a rustic plot whose area does not exceed ten thousand square metres. The co-owners’ retracto excludes the neighbours’.

• That the acquisition was by purchase or by giving in payment: the two cases Article 1055 names.Verified against the official source
• Exercising it within thirty days counted from the recording in the registry and, failing that, from when the retrayente learned of the sale.Verified against the official source
• For the co-owners’ retracto, that the share was transferred to an outsider; where several use it, pro rata to their portion.Verified against the official source
• For the neighbours’ retracto, that the rustic plot not exceed ten thousand square metres and that the lands not be separated by streams, ditches, ravines, roads or other apparent servitudes.Verified against the official source
• Reimbursing what Article 1051 requires, made applicable by Article 1059: the price, the contract expenses and the necessary and useful expenses made on the thing, with the deposit or security the claim requires.Verified against the official source

• The record of the sale’s registry recording, because the thirty days run from it.
• Evidence of the price and of the expenses to be reimbursed, with the deposit or security Article 1051 requires.

1. 1

   Step 1: What it is, and in which two cases it arises

   Article 1055 defines it as the right to subrogate, on the same conditions stipulated in the contract, in place of the person who acquires a thing by purchase or by giving in payment. Note the two triggers: purchase and giving in payment. Not every transfer opens the legal retracto.

2. 2

   Step 2: The co-owners’ retracto

   Article 1056 grants it: a co-owner of a common thing may use the retracto where the share of all the other co-owners, or of one of them, is transferred to an outsider. And it shares the right where several are interested: where two or more co-owners want to use the retracto, they may do so only pro rata to their portion in the common thing.

3. 3

   Step 3: The neighbouring landowners’ retracto

   Article 1057 also gives it to owners of adjoining lands on the sale of a rustic plot whose area does not exceed ten thousand square metres. It does not apply to adjoining lands separated by streams, irrigation ditches, ravines, roads and other apparent servitudes benefiting other plots. And if two or more neighbours use the retracto at the same time, the owner of the smaller adjoining land is preferred; and if both are equal, whoever asks first.

4. 4

   Step 4: Thirty days, and where they are counted from

   Article 1058 is categorical: the legal retracto right may not be exercised except within thirty days counted from the recording in the registry and, failing that, from when the retrayente learned of the sale. The recording counts first; knowledge only comes in where there was no recording.

5. 5

   Step 5: If co-owners and neighbours compete, the co-owners win

   The same Article 1058 settles it in five words: the co-owners’ retracto excludes the neighbours’. There is no sharing or proration between them.

6. 6

   Step 6: What must be paid

   Article 1059 refers to two articles of the conventional retracto: in the legal retracto, Articles 1044 and 1051 apply. That means the buyer substitutes the seller in all their rights and actions, and the retrayente must reimburse the price of the sale, the contract expenses and any other legitimate payment for the sale, and the necessary and useful expenses made on the thing; and that for the claim to proceed the price must be deposited if known, or security given to deposit it once it is.

7. 7

   Step 7: And on what terms you subrogate

   Article 1055 says it from the start: on the same conditions stipulated in the contract. The price and terms are not renegotiated; you step into the buyer’s place exactly as the deal stands.

Before the Court of First Instance, which will not let the claim proceed without the deposit of the price or the security Article 1051 requires, applicable by the reference in Article 1059. The thirty-day period runs from the registry recording.

• Letting the thirty days pass: the period runs from the registry recording, not from when you decided to act.
• Counting from when you found out where there was a recording: knowledge only counts failing one.
• Believing the co-owners’ and neighbours’ retractos are shared: the co-owners’ excludes the neighbours’.
• Claiming the co-owners’ retracto where the share was sold to another co-owner and not to an outsider.
• Claiming the neighbours’ one over a rustic plot larger than ten thousand square metres.
• Ignoring separation by roads, streams or apparent servitudes, which excludes the neighbours’ retracto.
• Filing the claim without depositing the price or giving security to deposit it.
• Trying to renegotiate the price: you step in on the same conditions stipulated in the contract.

These are the government pages this guide is based on.

• Poder Judicial de Puerto Rico

  Poder Judicial

  bvirtualogp.pr.gov