Vacant and abandoned housing: the special procedure and its deadlines

It is a special, fast judicial procedure the Department of Housing may use over housing from its own programmes when two things coincide: the house is vacant and in a state of abandonment, and the mortgage debtor stopped paying two or more consecutive instalments. What is useful about knowing it is the calendar: there is a mandatory prior notice with fifteen days to appear, a hearing within twenty days and a court decision in five.

The procedure does not reach just any housing. The law limits it to housing “built, sold or financed under any housing programme of the Department, its attached agencies or corporations” or titled to the Office for the Liquidation of the Accounts of the Urban Renewal and Housing Corporation; and to cases where two conditions coincide: that the housing “be vacant and in a state of abandonment” and that “the mortgage debtor has failed to pay two (2) or more consecutive monthly instalments of the mortgage loan granted in their favour.” For cases brought by the Housing Financing Bank and Agency, the procedure shall be one of transferring title of the housing financed by that Bank.

• That the housing was built, sold or financed under a housing programme of the Department, its attached agencies or corporations, or that it be titled to the Office for the Liquidation of the CRUV Accounts.Verified against the official source
• That the housing be vacant and in a state of abandonment.Verified against the official source
• That the mortgage debtor has failed to pay two (2) or more consecutive monthly instalments of the mortgage loan.Verified against the official source

• A copy of the notice sent to the titular and known interested creditors by certified mail with return receipt, which the law requires be attached to the writing before the Court.
• A certification of the amount of the overdue and unpaid instalments, attached to the writing alongside what pertains to the sale contract, the mortgage contract and the promissory note.

1. 1

   Step 1: Both conditions are needed at once

   It is the filter that decides whether this procedure applies. The law allows it “in cases where the housing is vacant and in a state of abandonment and the mortgage debtor has failed to pay two (2) or more consecutive monthly instalments of the mortgage loan granted in their favour.” An occupied house, even with arrears, does not fit the text’s description.

2. 2

   Step 2: Before court: certified notice and fifteen days

   It is the step that matters most to whoever receives the envelope, and the law makes it mandatory. The writing before the court “shall be accompanied by a copy of the notice sent to the titular and to the known interested creditors, by certified mail with return receipt requiring their appearance before the Department or the Office within the fifteen days following its receipt.” The law adds that notice “is a prerequisite to filing the special procedure.”

3. 3

   Step 3: What that notice must say

   The law sets its content, and it is worth checking. The notice “shall state that the titular or any known interested creditor must show cause why the sale and mortgage contract should not be resolved, or title transferred to the Bank.” And they shall be warned that if they do not appear within the term, “or having appeared they refuse or show disinterest in complying with the conditions stipulated in the contracts,” the Department or the Office may bring the procedure before the Superior Court.

4. 4

   Step 4: And service is also made under Rule 4

   Besides the prior notice, the law requires formal service of the suit: the special procedure “must be notified to the titular debtor and to the known creditors, as soon as it is filed, by summonses issued and served under Rule 4 of the Rules of Civil Procedure.” We did not read that Rule for this guide, so we do not explain its content.

5. 5

   Step 5: The hearing, within twenty days

   It is a short process and worth knowing. “Upon the filing of that writing in Court, it shall proceed to cite the housing titular, the known creditors and the Department or the Office to a hearing to be held within the twenty (20) days following the citation to hear the case.”

6. 6

   Step 6: What must be proven at the hearing

   The burden is not automatic: “At the hearing it shall be established by the pertinent evidence, the fact that the housing is vacant and abandoned, the mortgage debtor’s breach of the mortgage contract and the creditors’ rights.” And it adds that “the Department or the Office, as the case may be, must show cause why the contract should be resolved in their favour or title transferred to them.”

7. 7

   Step 7: Creditors may pay and move to the front

   It is a way out the law leaves open at two moments. “Known interested creditors may, in their appearance before the Department or the Office, opt to satisfy the credit and become preferred creditors. They shall have the same option at the hearing before the Court.” And the flip side: if known interested creditors “do not appear or show interest, the Court may determine that their claims be cancelled.”

8. 8

   Step 8: The decision comes in five days

   The close is as fast as the rest: “Within five (5) days of the hearing having been held, if warranted by the evidence presented, the court shall order the resolution of the sale contract and the transfer of title or the transfer of title alone in the cases that correspond, in accordance with the evidence presented.” Note the condition: only “if warranted by the evidence presented.”

It is not a procedure you apply for: it is one brought by the Department of Housing, its attached agencies or corporations, or the Office for the Liquidation of the CRUV Accounts, before the Superior Court division of the territory where the property sits. What is up to you, if you receive the notice, is to appear before the Department or the Office within the fifteen days and, later, at the court hearing. If your matter is a rental eviction, or the homestead right over your primary residence, those have their own guides here.

• Believing arrears alone suffice: the law also requires the housing to be vacant and in a state of abandonment.
• Thinking it applies to any mortgage: it only reaches housing built, sold or financed under Department of Housing programmes or titled to the Office for the Liquidation of the CRUV Accounts.
• Ignoring the certified notice: it gives fifteen days to appear, and appearing is what opens the chance to show cause.
• Assuming there are months ahead: the hearing is held within twenty (20) days of the citation and the order issues within five (5) days of the hearing.
• Failing to notify a known interested creditor: if they do not appear or show interest, the Court may determine their claim be cancelled.
• Confusing it with a tenant eviction: they are different procedures and that one has its own guide.

These are the government pages this guide is based on.

• Departamento de la Vivienda

  Vivienda

  bvirtualogp.pr.gov