Title to the plot when your house sits on someone else’s land

It is a very old situation in Puerto Rico: the house is yours, your family built it, but the plot it sits on was never in your name. With no title there is no mortgage, no clean inheritance and no sale. This 1975 Act is the route the State opened for that. It orders public agencies to hand the Housing Department, free of charge, the public land where dwellings sit, and authorises the Secretary to grant title to the occupant. If the family is of scarce means as the Act itself defines, the title costs one dollar. If not, a percentage of the appraisal is paid under a table the Act sets out in writing.

Section 12 asks four things of the acquirer: to be the plot’s occupant and reside in the dwelling on it; to have their permanent domicile there; to own no other dwelling of any kind; and to be residing in the dwelling at the time this Act was approved. That last requirement is worth reading alongside the occupant definition in Section 1(e), which anchors possession to 31 December 2002 and further includes whoever after that date acquired by transfer, inheritance, donation, exchange, cession or purchase the dwelling from whoever possessed it on or before then. The compilation carries both dates — 1975 in Section 12 and 2002 in Section 1 — and we report them as they stand, without choosing. That same Section 1(e) expressly excludes a family that already benefited from acquiring a plot under another Housing Department programme.

• Be the occupant of the plot and reside in the dwelling built on it.Verified against the official source
• Have your permanent domicile established in that dwelling.Verified against the official source
• Own no other dwelling of any kind.Verified against the official source
• Not have previously benefited from acquiring a plot or land under another Housing Department or attached-agency programme.Verified against the official source
• Undertake to use the property as your principal residence.Verified against the official source

Information pending verification.

1. 1

   Step 1: Which land it covers and how it reaches the Department

   Section 2 is what sets the machinery in motion, and it names agency by agency: it orders “the Land Authority, the Land Administration, the Department of Transportation and Public Works (DTOP), the Industrial Development Company, the General Services Administration and any other public instrumentality to transfer to the Housing Department, free of cost, title to the public land on which a dwelling sits.” Section 3 repeats that the transfer shall be free. And Section 4 authorises the Secretary to grant title over that land, over land already belonging to the Department and over land it acquires in future for these purposes.

2. 2

   Step 2: The dollar, and who qualifies for it

   Section 9 says it plainly: “Title shall be granted for the sum of one (1) dollar in those cases where the families are of scarce economic resources as defined in this Act.” And the definition sits in Section 1(d): a family of parents and children whose adjusted gross income does not exceed fourteen thousand four hundred dollars a year, including the income of the head of family and their spouse. The Act excludes from the income computation study grants, veterans’ lump-sum compensations and others from judicial, administrative or extrajudicial awards, and federal aid from the nutrition assistance programme, social security or retirement systems. These figures are the Act’s and are not indexed; we publish them as what they are, the statute’s thresholds as they appear in the compilation revised to 15 April 2024.

3. 3

   Step 3: The deductions that lower your adjusted income

   Before writing off the dollar it is worth doing the sum the Act itself orders. Section 1(d) subtracts five credits from annual gross income: two thousand dollars for payroll deduction; one thousand dollars per dependant under twenty-one not working; two thousand dollars per family member mentally or physically incapacitated; one thousand five hundred dollars per member over sixty-five with no income; and one thousand dollars per dependant over twenty-one and up to twenty-five in university studies with no income. A family may fall below the threshold after applying those credits even if its gross income exceeds it.

4. 4

   Step 4: If you do not qualify for the dollar: the table

   The Act does not leave you out, it sets a graduated price. Section 9: “The percentage corresponding to the family, according to its income in the table presented below, shall be multiplied by the basic appraisal of the plot for which title is to be granted; the result shall be the sale price.” The table starts at 2% for adjusted gross income of $14,401 to $14,500 and rises in hundred-dollar bands to 98% in the $16,701 to $16,800 band. And it closes: “Families with an adjusted gross income of $16,801 and above shall pay as purchase price the price corresponding to the plot’s basic appraisal.” The basic appraisal, per Section 1(a), is done by experts taking into account that the plot is occupied and its circumstances of area, shape and size.

5. 5

   Step 5: The five-year restriction, and what counts as a sale

   It is the part that most surprises people after receiving title, and it must be read before signing anything. Section 8: whoever received title for one dollar and sells or alienates “on or before five (5) years from that granting shall return part of the plot’s value, at the time of sale, to the Housing Department, on the basis of an expert appraisal,” thus: first year 90%, second 80%, third 70%, fourth 60%, fifth 50%. And it defines broadly what triggers the return: “The term sale includes other forms of alienation such as exchange, liens, rental, mortgage and offering guarantees with the property as collateral.” Renting the plot counts. Pledging it as collateral counts. The clause goes into every certification and extends to the acquirer’s successors in right.

6. 6

   Step 6: The five ways out of that restriction

   The Act recognises that life does not wait five years, and Section 8 lists the grounds on which the Department will exempt payment, by written certification. One: divorce, where a spouse cedes their share to the other, who takes it with the same restrictions and receives no money or goods in exchange. Two: inheritance, where successors acquire with the same restrictions. Three: grave or terminal illness certified by a physician, where the owner or a dependant living on the plot is obliged to dispose of it to obtain medical treatment. Four: taking a mortgage loan to make improvements to the property, with no surplus left. Five: any other situation the Secretary deems meritorious. With a consequence worth knowing: “Any person exempted for the reasons expressed above shall not have the right to benefit from the programme again.”

7. 7

   Step 7: If you prefer not to buy: the lease

   Section 9A opens that alternative for whoever will not or cannot pay the table price: the Secretary “may grant that plot on lease to the occupying family, which shall pay a monthly canon equal to the legal interest on the plot’s basic appraisal value prorated on a monthly basis.” And it adds the exit: “after a term of five (5) years from the lease of the plot the family may acquire it at the property’s prevailing market appraisal value at the time of purchase.” Note that last phrase: the purchase after the lease is at the market value of the moment, not at the table price.

8. 8

   Step 8: What you can be asked to pay, and what the certification says

   The only amount the Act puts on the applicant’s side is in Section 13A, and it is voluntary and capped: the Secretary is authorised “to ask those granted title to the plot on which their dwelling sits to contribute voluntarily the lotification and administration costs necessary for granting that title,” and specifies that this amount “shall not exceed $100.00 per title.” On the registry side, Section 8 provides that “Property Registrars must record that certification or deed of sale and carry out the registration of title in favour of the acquirer, free of fees.” And the title is documented by the Secretary’s certification bearing the acquirer’s name, the time they have occupied the plot, the transfer date, the plot’s area and description and the note of its recording.

At the Housing Department, to which the Act transfers the land and whose Secretary grants title by certification. The Act publishes no form, office, address or telephone, and we do not invent them; this library covers the Department’s regional offices in a separate guide.

• Believing the one-dollar title is for everyone: the Act reserves it for families of scarce means under its own definition.
• Not applying the Section 1(d) deductions before writing off the income threshold.
• Renting the plot within five years: Section 8 counts rental as alienation that triggers the return.
• Pledging the plot as collateral unknowingly: offering guarantees with the property also counts as a sale for the restriction.
• Assuming the restriction dies with you: the clause extends to the acquirer’s successors in right.
• Thinking the exemption is free in the long run: whoever is exempted loses the right to benefit from the programme again.
• Believing that after the lease you buy at the table price: Section 9A says it is at the prevailing market appraisal value.
• Owning another dwelling: Section 12(3) requires owning no other dwelling of any kind.

These are the government pages this guide is based on.

• Departamento de la Vivienda

  Vivienda

  bvirtualogp.pr.gov