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Cablegate: Question: "Should You Buy Real Estate and Retire In

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RR RUEHWEB

DE RUEHMU #1947/01 2322056
ZNR UUUUU ZZH
R 202056Z AUG 07
FM AMEMBASSY MANAGUA
TO RUEHC/SECSTATE WASHDC 1054
INFO RUEATRS/DEPT OF TREASURY WASHINGTON DC
RUCPDOC/DEPT OF COMMERCE WASHINGTON DC
RUEHZA/WHA CENTRAL AMERICAN COLLECTIVE

UNCLAS MANAGUA 001947

SIPDIS

STATE PASS USTR

SENSITIVE
SIPDIS

E.O. 12958: N/A
TAGS: EINV ECON USTR KIDE NU

SUBJECT: QUESTION: "SHOULD YOU BUY REAL ESTATE AND RETIRE IN
NICARAGUA?"

1. (U) Summary and Introduction: For two years, Grace Brunton
occupied a one-of-a-kind job at Embassy/Managua, that of Economic
Officer-in-charge of helping American citizens obtain settlements
from the Nicaraguan government for property expropriated during
Sandinista rule in the 1980s. Despite the lingering history of
expropriation and a multitude of legal problems surrounding land
titling, Nicaragua received considerable attention during Grace's
tenure as the next great low-cost tropical retirement destination
for U.S. citizens. Most agree that this newfound interest is due
largely to the simple fact that Nicaragua lies just north of Costa
Rica, a popular, but increasingly more expensive, retirement
destination for Americans in its own right.

2. (SBU) Before Grace retired from the Foreign Service in July at
age 65, we asked her to assess Nicaragua as a retirement
destination. The result, which follows in paragraphs 3-10,
comprises Grace's final report to Washington as a Foreign Service
Officer. In addition to providing a number of important insights
into the Nicaraguan political and legal dynamic, Grace showcases her
wit and literary flair. Her answer to the question, "Should You Buy
Real Estate and Retire in Nicaragua?" is a resounding, but colorful
"No." For Grace, Nicaragua simply presents too many legal risks and
not enough authentic culture. End Summary and Introduction.

The Short Answer Is "No"
------------------------

3. (SBU) Since arriving in Nicaragua in 2005, Grace frequently heard
that there are significant risks in purchasing real estate in this
country. Prospective buyers are admonished by websites,
acquaintances, and even sellers that they should "exercise caution"
before committing to land investments. Nevertheless, for the
duration of her two-year stay, Grace frequently came across glossy
brochures displaying happy buyers frolicking in their own tropical
wonderland, free of problems, rum in hand; due diligence be damned.

4. (SBU) The flip side of the availability/mythology of cheap land
in Nicaragua is that the ownership of many properties is still in
dispute. The 1979-90 Sandinista government expropriated some 30,000
properties. Deeds and titles on these and many other properties
remain ambiguous or, in many instances, actually fraudulent.
Although the government has resolved several thousand claims of U.S.
citizens through compensation or the return of real property, there
remain hundreds of unresolved cases registered with the U.S.
Embassy: close to 700. New cases involving American citizens
constantly pop up.

5. (SBU) At first blush, one can easily understand how a "buy low,
sell high" mindset would draw U.S. speculators and land developers
to Nicaragua. The relevant question, though, is "How is it working
for you?" Unfortunately, while buying low (relative to purchases in
Costa Rica, Panama, or Florida) is possible, securing proper title
in Nicaragua carries many more costs than the average Central
American vacation spot. De facto and even de jure possession
rapidly turns tenuous when armed invaders show up on the scene, as
they are often unfortunately wont to do.

6. (SBU) When an irresistible property purchase goes sour and winds
up in court, the judicial system offers the foreign buyer little
relief. The Embassy is aware of innumerable cases in which buyers
purchased property supported by what appeared to be rock-solid
titles -- only to find themselves subsequently embroiled in
litigation after the titles were contested by an affected, or
otherwise interested, third party. Coastal properties, the most
valuable sites because of the potential for tourism, seem to find
their way in significant numbers to the courts, whose process is
complicated by non legal factors such as fear, greed, corruption,
and politics. Litigation can leave buyers in the spotlight, in the
headlines, in well over their heads, and in an endless maze of
courtroom maneuvering. (Unceasing judicial scrutiny and even
physical threats are nothing new when it comes to property disputes
in Nicaragua.) Sometimes, armed squatters simply set up
housekeeping, confident that police and/or judicial authorities will
be unable or unwilling to act.

7. (SBU) Under the circumstances, it is hard to imagine not heeding
the Embassy's strong warning to exercise extreme caution when it
comes to purchasing property in Nicaragua. Newspaper stories
reporting corruption, political pressure, influence peddling, and
shootings abound. Despite this warning and common sense, there are
Americans who ignore their better angels, fall victim to temptation,
and sometimes wind up contributing their own human frailty and moral
slipperiness to the legal morass that engulfs Nicaraguan real
estate. For retires looking for a happy ending, it is maybe smarter
to read a good book than to study glossy Nicaraguan real estate
brochures.

The Long Answer Is "No Way"
---------------------------

8. (SBU) There are other factors to consider. Nicaragua is
certainly not a nation that can boast a full measure of
stereotypical Latin American "quaintness"--retirees should not
expect to find a Nicaraguan version of San Miguel de Allende or
Antigua. War, poverty, and natural disasters have taken their toll.
While Leon and Granada have been given face lifts, downtown Managua
has yet to be truly rebuilt after the devastation of the 1972
earthquake. Indeed, Nicaragua offers the risk of earthquakes, live
volcanoes, hurricanes, dengue fever, and malaria. If the dengue
does not get you, the next earthquake surely will.

9. (SBU) Emblematic of Nicaraguan cuisine is the bean and rice combo
Gallo Pinto, named after a black and white guinea fowl and possibly
the best candidate for most-favored-food status. Though
gastronomically iffy for some unadventurous American palates, it is
reasonably priced and more authentically "Nica" than southern fried
chicken, Domino's Pizza, or plastic-wrapped multinational cyber chow
with an indeterminate shelf life, all of which abound in Nicaragua's
larger cities.

10. (SBU) This embrace of North American fast food, coupled with
distance from the residual European charm present farther south in
sister Latin American republics, suggest that Nicaragua is still
simply not a top-flight retirement destination. As Grace has
observed, "Until they get the spam out of the gourmet section in my
local supermarket, my considered opinion is that Nicaragua is not
ready for American prime time."

TRIVELLI

© Scoop Media

 
 
 
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