Real Estate Investment in Honduras: U.S. citizens should exercise extreme caution before entering into any form of commitment to invest in real estate, particularly in coastal areas and the Bay Islands.
Honduran laws and practices regarding real estate differ substantially from those in the United States, and fraudulent deeds and titles are common; U.S. citizens considering investing or buying real estate in Honduras should be aware that rights to such property do not enjoy the same level of protection as in the United States. Approximately 80 percent of privately held land is either untitled or improperly titled. Inadequate land title procedures have led to numerous investment disputes involving U.S. nationals who are landowners. Historically, title insurance has not been available in Honduras.
Recently, some American insurance companies have begun offering title insurance in cooperation with Honduran attorneys. In addition, there are complaints that the Honduran judicial system often prolongs disputed cases for many years before resolution. American citizens have spent thousands of dollars in legal fees and experienced years of frustration trying to resolve property disputes, even in cases where local attorneys and Honduran and U.S. real estate agents had given assurances to the investor. Violence has been used against American citizens involved in disputed property cases. Potential investors should engage competent local legal representation before making any commitments. Investors should also thoroughly check the references of attorneys and real estate agents.
Honduran law places certain restrictions on land ownership by foreigners in coastal and border areas. Squatters have claimed a number of properties owned by U.S. citizens. U.S. government officials may not act as agents, attorneys, or in a fiduciary capacity. U.S. citizens who own property abroad and who have assumed responsibilities concurrent with ownership of property in a foreign country should take steps on their own initiative to safeguard their interests and to employ private legal counsel when the need arises. For further information on investing in property in Honduras, please review the State Department’s Investment Climate Statement, part of the Country Commercial Guide. For information on contracting Honduran legal representation, please check with other investors. You may also refer to the list of attorneys available on the Embassy’s home page.