Thursday, December 22, 2011

Cuba’s title recording system, part 3

Analysis: Cuba's title recording system, part 3
By José Manuel Pallí, Esq.

What is it the Cuban authorities are trying to achieve by reforming the
island's land title recording system? It is clear that they want Cubans
to record their socialist "personal" property rights over housing with
the Registro de la Propiedad, perhaps to solidify those rights in the
face of future claims against them.

The reform, or recovery rather, of the Cuban land title recording system
began in earnest in 1998, with Decreto Ley 185/98, which modified
Chapter IX (Registro de la Propiedad), articles 116 to 121 of Cuba's
Housing Law (Ley 65/1988 or Ley General de la Vivienda).

The 1998 version of article 118 read almost like the provisions in
Decreto Ley 288 that recently modified articles 69.1 and 70.1 of the
same Housing Law: In both cases, the modified law seems to mandate the
use of a notarial document and the recordation of the titles in the
Registro de la Propiedad. Article 118, as modified by DL 185 back in
1998, called for the recordation of the transactional title document
after the transaction occurred ("…deberán ser declaradas mediante
escritura pública, la que se presentará para su inscripción en el
Registro correspondiente."). The changes introduced to articles 69 and
70 this past November are more emphatic in requiring the recordation of
all titles, since they stipulate no transaction over housing can take
place unless the notary has evidence that the corresponding titles are
already recorded. Among the procedural rules for the recordation of
titles and other documents found in Resolución 114/2207 of the Housing
Institute discussed below, we find, in its article 2.1, a period of 60
days from the date of the execution of the notarial document for the
recordation of a conveyance (transferencia de dominio u otro derecho
real). There is no necessary contradiction between all these
provisions, and the Fourth Final Provision (Disposición Final Cuarta) in
DL 288 would otherwise take care of any, since it does away with all
egal provisions that contradict those contained in that piece of
legislation ("se derogan … cuantas disposiciones de igual o inferior
jerarquía se opongan a lo dispuesto por el presente Decreto-Ley"), a
legislative technique that makes reading Cuban Law the thrilling
endeavor it is. What there is is a sense of frustration on the part of
the Cuban legislator with not getting the results it wants.

Our Miami folklore assumes that most people in a totalitarian regime
like Cuba's just follow the marching orders, the exception being the few
courageous ones who dare to dissent. But the Cuban government's apparent
frustration with the 13-year long — and counting — saga of getting
Cubans to record their titles in the Registro de la Propiedad should
dispel those beliefs.

In May 2003, the Executive Committee of the Council of Ministers (comité
ejecutivo del Consejo de Ministros) adopted Acuerdo — literally an
agreement, stuff we in the bipartisan United States seldom see these
days — No. 4799, whereby the Cuban government called for strengthening
its administrative control over the country's housing stock, and over
land in general (control del patrimonio inmobiliario del paìs) by
pursuing the recording of all land parcels (inmatriculación) and of all
title documents (inscripción) showing property rights over said parcels
and identifying the holders of those rights. As a result of this
directive, a set of rules and procedures for the organization and
operation of the land title recording system was adopted by the Ministry
of Justice (MINJUS) through Resolución No. 249/2005. But the provisions
in this piece of legislation were soon found lacking, and Resolución No.
114/2007, which sought to implement a more agile and effective recording
process, superseded it.

Article 1.2 of Res. 114/2007 refers to the Registro de la Propiedad's
recording entries as being a guarantee of legal certainty (garantía de
seguridad jurídica) in all matters affecting real property rights. The
question is whether this pronouncement marks a shift from a reform
driven by a governmental urge to "control" to one that pursues legal
certainty, for the benefit of individuals and society as a whole, as its
ultimate goal. If the latter, this could have been seen as a strong
inducement and incentive to record their titles by those who became
"owners" thanks to the Cuban Revolution.

And I call it a shift because no lesser figure than Juan Vega Vega, the
distinguished professor of law and director of the urban reform of the
1960, is on the record — in his book, Comentarios a la Ley General de la
Vivienda, that comments on Cuba's 1984 Housing Law — saying that the
Revolution only needed a Registro as a tool for urban control. According
to Vega Vega, there is no better legal certainty or guarantee than that
arising from the occupation of a given housing unit by its owner, so he
considered the "old anachronistic registry" obsolete. But he believed
Cuba (its government) needed to know everything about its housing stock
(fondo habitacional), especially every piece of information regarding
its actual tenure at a given point in time. This set of priorities led
to the "creation" in 1984 of a Housing Registry (Registro de la
Propiedad de la Vivienda y los Solares Yermos), an experiment whose
utter failure gave way to the reform that began in 1998, as we note above.

The "control"-driven registries or cadasters — a cadaster is the proper
receptacle for the kind of information tied to the the state's control
needs, having fiscal effects, whereas a sound title recording system has
legal effects — were a staple among the aspirations of all the countries
then dwelling behind the Iron Curtain. During the Soviet era, Russia
achieved a very high level of proficiency in its cadastral system, which
was focused, for instance, in assessing the productivity of the soil in
Russian lands, though not in assigning property rights over them.

But it should be pointed out that, long before the 1917 Revolution,
Russians saw land tenancy from a perspective that emphasized its
communal, social function, a conception that was quite different from
the one prevailing in Western Europe and in the United States, where
land is just another asset — or a commodity even — subject to market
rules that price it accordingly. Cuba's history prior to the 1959
Revolution shows its alignment with the Western concept of property
rights over land. And Cuba's Housing Law of 1988 (the second Ley General
de la Vivienda) explicitly acknowledged that old Registro de la
Propiedad from 1880 that so efficiently assigned property rights (and
which was called obsolete only four years before) as a valuable
accessory to the stillborn Housing Registry, with a significant
"historical value" (in the words of another brilliant Cuban lawyer,
Rodolfo Dávalos Fernández).

But whether there is a true shift in priorities and policies or not, it
is apparent that Cubans are less than enthusiastic when it comes to
volunteering the information required for the recording of their real
property (or housing) titles with the Registro de la Propiedad. That's
to the point that less than 10 percent of the housing units in Cuba are
said to be presently in compliance with the recording requirements found
in the Housing Law and in the regulations governing Cuba's land title
recording system.

Resolution 114/2007 (containing "Las normas y procedimientos para la
organización y funcionamiento del Registro de la Propiedad") reads very
much like its counterparts in other countries, which, like Cuba, are
part of the universe of Civil Law. Among the documents and titles that
can be recorded — they are listed in article 4 of Res. 114/2007 del
MINJUS — we find the Actas de Notoriedad, a very useful little document
that the Spanish recording system resorts to when in need of curing gaps
or other imperfections in its otherwise very efficient clock-work
(Article 4.15: En el Registro de la Propiedad se inscriben los títulos y
documentos siguientes: …15. Las actas de notoriedad, cuando proceda, en
los casos de recuperación del tracto registral).

The modification to these operational guidelines for the Cuban recording
system introduced by Resolución No.342/11 of the INAVI (Cuba's National
Housing Institute) simply makes the necessary adjustments required under
DL 288/11 in order to get into the Registro de la Propiedad all the data
pertaining to the internal building activities (acciones constructivas
internas) conducted in a given housing unit, such as additions and
refurbishments (ampliaciones y rehabilitaciones). The recordation of
this "internal construction" data was previously barred under Resolución
No. 50/2009 del INAVI.

I am hopeful that this slow and convoluted process of
reformation/recovery of the Cuban land title recording system will
eventually lead to something very similar to what Cuba had before the
1959 Revolution. A heavy dose of goodwill, together with mediation and
consensus building skills and the savvy use of tools like the actas de
notoriedad may even go a long way in dissipating many of the clouds
presently menacing Cuba's future when it comes to determining who owns what.

Of course, some may see my hope as little more than an exercise in
wishful thinking. After all, I am writing from Miami, the world's
capital of wishful thinking. But there is an even more ludicrous — and
even perilous — exercise in the same field: Thinking that the Cuban
people will gamely accept and adopt the real estate transactional model
— whether it is a Chinese or an American model — one has in store for
them. And their present rulers' travails in trying to get them to record
their title documents should serve as exhibit Number One in that regard.

José Manuel Pallí is a Cuban-born member of the Florida Bar,
originally trained as a lawyer in Argentina, and president of
Miami-based World Wide Title. He can be reached at

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