Having first claim to buy something: option, tanteo and retracto

It is Chapter I of Title VIII of Book Three of the Civil Code of 2020, Articles 1022 to 1028. These are the rules common to the option to purchase, tanteo and retracto: what holds for all three before getting into each one.

They may fall on immovables and on movables capable of identification, future assets included. Rights over future assets are personal, unless conditioned on the assets’ actual existence.

• For the right to be real, constituting it as such in a public instrument and recording it in the corresponding registry, unless the law recognizes it as such.Verified against the official source
• To assert a voluntary preferential acquisition right against third parties, registry recording.Verified against the official source
• On exercising it, meeting beforehand or simultaneously the requirements stipulated or set by law and reliably notifying the thing’s current owner.Verified against the official source
• If the right belongs to several in common, exercising it all together or one or several by assignment from the rest.Verified against the official source

• The public instrument of constitution, without which the right cannot be real unless the law recognizes it as such.
• The reliable notification to the thing’s current owner, which Article 1027 requires when exercising the right.

1. 1

   Step 1: What they are and which they are

   Article 1022 defines them as limited rights that empower their holder to obtain the transfer of a thing or right from its owner or holder, by paying its price and meeting the other requirements set in the juridical act or the law. And it names the three that make up the category: the option to purchase, tanteo and retracto.

2. 2

   Step 2: Where they can come from

   Article 1023 opens several doors: they may be created by acts between the living, for value or gratuitously, or on account of death, or by assignment, reservation or division. Creation may be by a juridical act aimed at attributing the right, or by an express and independent agreement or stipulation built into another juridical act. And it adds a route that depends on nobody: tanteo and retracto may also be established by law.

3. 3

   Step 3: The article that decides how much they are worth

   Article 1024 is the one to read before signing anything. Preferential acquisition rights may be real or personal in nature. They are real only when constituted as such in a public instrument and recorded in the corresponding registry, under the applicable legislation, or where the law recognizes them as such. And enforceability against third parties of voluntary preferential rights comes about through registry recording. A preference clause in a private contract binds whoever signed it; it does not stop a third party from buying.

4. 4

   Step 4: What they can fall on, future assets included

   Article 1025 admits them over immovables and over movables capable of identification, and also over future assets. But it sets a condition on the latter: rights over future assets are personal, unless conditioned on the assets’ actual existence.

5. 5

   Step 5: What happens when a real one is exercised

   Article 1026 spells it out. Exercise means acquiring the thing in the same conditions it was in at the moment the right was constituted, and results in the extinction of incompatible rights constituted over it afterwards, without prejudice to the real-property registry legislation. The price remains entirely at the disposal of the holder of the ownership right over the thing or, where applicable, of the holders of rights constituted after the preferential acquisition right.

6. 6

   Step 6: If the owner refuses to formalize

   The same Article 1026 gives the remedy: the holder of the preferential acquisition right may judicially require the thing’s current owner, should they refuse to formalize the transfer, and the claim may be annotated in the corresponding registry. That annotation is what warns the world the thing is disputed.

7. 7

   Step 7: How it is exercised, and what if there are several holders

   Article 1027 imposes two things on exercise: meeting beforehand or simultaneously the requirements stipulated or set by law, and reliably notifying the thing’s current owner of the effective exercise of the right. And Article 1028 closes the chapter: a preferential acquisition right belonging to several holders in common cannot be exercised unless they all do so together or one or several of them by assignment from the rest.

Before a notary for the public instrument, and before the corresponding registry for the recording, which is what makes the right real and enforceable against third parties. The judicial requirement for refusal to formalize the transfer goes before the Court of First Instance, and the claim may be annotated in the registry.

• Believing a preference clause in a private document stops a third party from buying: without a public instrument and recording it is not real.
• Confusing option, tanteo and retracto: they are three distinct figures within the same category.
• Agreeing preference over a future asset without conditioning it on that asset’s actual existence: the right is then personal.
• Exercising the right without reliably notifying the thing’s current owner.
• Exercising it without first or simultaneously meeting the stipulated or legal requirements.
• One holder exercising it alone where the right belongs to several in common, without assignment from the rest.
• Assuming the holder keeps the price: it remains at the disposal of the thing’s owner.

These are the government pages this guide is based on.

• Poder Judicial de Puerto Rico

  Poder Judicial

  bvirtualogp.pr.gov