Buying an occupied apartment in Peru

In the Peruvian market, "occupied" apartments are offered with discounts of 20% to 40% off market value. The opportunity exists, but it requires understanding the occupant type, the legal tools to recover possession and the real timelines of an eviction proceeding in the Judiciary.

Types of occupants in Peru

Tenant with valid contract

There's a signed lease. The purchase obliges the new owner to respect the agreed conditions until expiration, except for an early-termination clause negotiated in the contract.

Tenant with expired contract

The contract ended but the tenant remains in the property. If they pay rent and the landlord receives it, conducción de hecho may exist.

Precarious occupant

Person without possession title or whose title has lapsed. The most common figure, governed by the sumarísimo proceeding for ocupación precaria.

Invaders

People who entered without authorization. Here also enter reivindicación and, in some cases, the crime of usurpation.

Applicable legal framework

• Código Procesal Civil: governs eviction (sumarísimo proceeding).
• Law 30933: notarial eviction for specific cause (term expiration or non-payment) if the contract expressly provided for it.
• Civil Code: governs the lease, precarious possession and reivindicación.
• Penal Code: defines usurpation.

Why occupied apartments are discounted

• The eviction process in Lima takes 6 to 18 months, depending on the court and the defendant's behavior.
• There's a risk of damage to the property during the process.
• The buyer takes on legal and opportunity costs.
• During occupancy, the property cannot be formally rented.

Indispensable prior diligence

At SUNARP

• Literal copy of the property's partida registral.
• Verify encumbrances, mortgages and embargos.
• Confirm the seller is the current titleholder.

At the municipality

• Status of Impuesto Predial and arbitrios.
• No-debt certificate.
• Updated autoavalúo (HR/PU).

At the property

• Identify the occupant: name, relationship to the seller.
• Request the contract (if any), payment receipts, history.
• Visit the area and chat with neighbors to detect signs of conflict.

At the Judiciary

• Verify there are no pending proceedings (eviction, reivindicación, adverse possession) on the property.

Step-by-step procedure

1. Closing with ad-hoc clauses

The minuta and public deed must clearly state the property is sold occupied and describe the occupant. It's wise to negotiate:

• Payment in parts: a portion at closing, another against physical handover.
• Seller's warranty on the truthfulness of information.
• Allocation of liability for utility debts.

2. Bancarización

All payments above S/2,000 / US$500 must go through a bank to maintain deductibility and documentary evidence.

3. Recording at SUNARP

Once the deed is signed, the transfer is recorded. It's the basis for initiating any judicial action as the new owner.

4. Notarial notice to the occupant

The new owner sends a notarial letter notifying the change of ownership and demanding:

• To sign a new contract (if they were a regular tenant).
• To vacate the property if title had expired.

5. Start of the eviction

• Notarial route (Law 30933): if the contract allows, only a notarial notification and a brief court resolution are required.
• Judicial route: eviction lawsuit (sumarísimo) at the Justice of the Peace or Civil Specialty Court depending on the amount.

6. Removal

If the judge declares the lawsuit founded, removal (lanzamiento) is ordered, executed by the Judicial Auxiliary with the Police's support.

Example in Metropolitan Lima

Apartment in Surquillo:

• Free market value: S/420,000.
• Agreed discounted price: S/300,000.
• Attorney fees for eviction: S/9,000.
• Process costs (notices, expert reports, removal): S/3,500.
• Estimated time: 12 months.
• Lost rent during process: S/24,000 (S/2,000 monthly).

Estimated total cost: ≈ S/336,500, with free market value of S/420,000. The margin depends heavily on actual process time and the state in which the property is delivered.

Typical risks

• Occupants with family ties to the seller: eviction becomes more sensitive and sometimes slower.
• Damage to the property: floors, electrical installations and bathrooms tend to be affected.
• Parallel proceedings: if the occupant claims adverse possession or challenges the sale, timelines stretch.
• Maintenance fees: debts with the owners' assembly may become enforceable against the new owner.

How to protect yourself

• Work with an attorney specialized in evictions who knows the court handling the case.
• Consider offering an economic incentive to the occupant to vacate voluntarily. Often cheaper than waiting 18 months.
• Set aside a renovation reserve in your budget: 5% – 10% of the property value for post-removal repairs.
• Verify the declaratoria de fábrica and independización are recorded: selling an occupied and poorly sanitized property is a worse scenario.

When buying occupied isn't worth it

• If the discount is below 15% – 20%, it almost always doesn't justify the risk.
• If occupants are persons in judicially recognized vulnerability.
• If parallel proceedings (prescription, reivindicación) are underway.
• If the owners' assembly blocks the new owner's procedures.

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