Opción de compra-venta in Venezuela: what it is and what it must say

When the price is already agreed but the sale cannot yet be signed at the Registro Público (Public Registry), the parties sign an opción de compra-venta (purchase option agreement) or promesa bilateral (bilateral promise to sell and buy).

What an opción de compra-venta is legally

The Código Civil (Civil Code) does not regulate the option by name; the general rules apply: a contract has the force of law between the parties and can only be revoked by mutual agreement or for a cause allowed by law (art. 1.159), and it must be performed in good faith (art. 1.160).

Under that name, two different arrangements are actually signed:

On whether a bilateral promise with property, price and consent is already a sale, the Tribunal Supremo de Justicia (TSJ, the Supreme Court) has changed its position:

We did not find a later ruling by the Sala de Casación Civil that sets a single position: case law remains divided.

For the Sala Constitucional, the title of the document does not decide its nature: the judge must look at its content. And the sale of a property must be registered (art. 1.920): without registration it has no effect against third parties who have lawfully acquired and preserved rights over it (art. 1.924). In a dispute, how to classify the contract is a question for a lawyer.

Arras (earnest money): what happens if the buyer or the seller backs out

Art. 1.263 of the Código Civil says that, absent a contrary stipulation, whatever is given as arras when the contract is signed (or before) is a guarantee for damages in case of non-performance. The party not at fault, if it does not prefer to demand performance, may keep the arras it received or demand double the arras it gave.

In practice, these are called confirmatory arras (arras confirmatorias), which secure the deal and give no right to withdraw, as opposed to penitential arras (arras penitenciales), when the contract expressly sets a price for backing out: either party may withdraw by forfeiting the arras or returning them doubled. The Código Civil does not use those names; what counts is what the contract says, because art. 1.263 only applies absent a contrary stipulation.

Many options do not mention arras but a penalty clause (cláusula penal). This is compensation for the damages caused by non-performance (art. 1.258), and whoever collects it cannot claim both the sale and the penalty at the same time, unless the penalty was agreed for mere delay. The judge may reduce it if the obligation was partly performed (art. 1.260). In any bilateral contract, the party that performed may ask the judge for enforcement or termination, with damages where applicable (art. 1.167).

For a primary residence (vivienda principal), Resolución N° 11 of the Ministerio del Poder Popular para Vivienda y Hábitat (Ministry of Housing and Habitat), published in the Gaceta Oficial (Official Gazette) 40.115 on February 21, 2013, only allows penalties to be charged if there is proven responsibility for the delay in the protocolización (registration of the deed), never when the disbursement depends on a third party (art. 1), and it considers it excessive to retain more than 10% of what the buyer paid or to penalize the seller above that percentage (art. 2). The TSJ held it inapplicable to a contract that expired before its publication (RC.000639, 2016). We found no act repealing it, but we could not confirm that it is still in force either: if you are buying a primary residence, check with a lawyer.

Term and extensions

No law sets the duration: the parties agree on it. Contracts that reached the courts show a pattern of 90 calendar days (or three months) plus a 30-day extension, but that is a contractual practice, not a legal rule. In a 2008 Caracas case, the court accepted an extension that was not in writing because the clause did not require it. Write down how the extension is requested, until when, and whether the days are calendar days or business days.

The term must leave time for the paperwork. The Ley de Registros y Notarías (Registries and Notaries Law) prohibits registering the sale without the payment form for the ISLR (income tax) advance and the municipal tax clearance certificate (solvencia de impuestos municipales) (art. 97), and every document submitted must be drafted and visado (reviewed and stamped) by a lawyer (art. 23). Once it is submitted, the office has 3 business days to record it (art. 39), and it may refuse it with a reasoned decision within 30 days (art. 42). If the signing parties do not appear within 60 calendar days, the filing is voided with no refund (art. 39). On clearance certificates and the cédula catastral (cadastral ID), see the municipal tax clearance guide.

Does it have to be notarized, and what does it cost

The Código Civil does not require the option to be notarized for it to be valid between the parties: the document is a means of proof, except when the law requires it as a formality (art. 1.355). Notarizing it does help: notaries give public faith (fe pública) to option contracts (Ley de Registros y Notarías, art. 75, numeral 3), and a private document only has a date that holds against third parties in the cases of art. 1.369 of the Código Civil.

Fees are paid in bolívares at the value of the petro on the date of the request. We did not find a published unit that replaces the petro for these fees, nor a later providencia that changes these amounts: ask the notary for the amount and the breakdown in bolívares. The costs of the final sale are in the closing costs guide.

What the contract must say

Common traps

The full process is in the home buying guide.