Q: Can I prevent property sale without mortgage payoff in Puerto Rico?
I sold my house in Carolina with the closing on 12/11/2025. The buyer agreed to pay off the existing mortgage under my name with Banco Popular but has only been making monthly payments instead of settling the full amount to close the mortgage, which is still under my name. The buyer has sent a realtor to the property with the intent to sell it, which concerns me. Can I put a caveat with the property registry to prevent the sale without payoff of the mortgage? What steps should I take considering I'm the legal mortgage holder despite transferring ownership at closing?
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A:
Under Puerto Rico's property law system, you maintain significant protection through the mortgage lien ("hipoteca") that remains recorded in the Property Registry, creating a legal encumbrance that follows the property regardless of ownership transfers. Puerto Rico's Mortgage Law (Ley Hipotecaria) provides that any subsequent buyer would acquire the property subject to this recorded mortgage, meaning your interests remain secured against the property itself. We recommend immediately filing a "Nota de Advertencia" (Warning Note) with the Property Registry of Puerto Rico to formally document the breach of the sales agreement and provide public notice of your continuing interest.
The buyer's actions potentially constitute fraud under Puerto Rico's Civil Code if they misrepresented their intention to pay off the mortgage at closing, particularly if they now attempt to sell the property without fulfilling this obligation. Your position as the mortgagor gives you standing to initiate legal proceedings through an "acción de cancelación de hipoteca por incumplimiento" (action for mortgage cancellation due to non-compliance) in the Carolina Superior Court. This legal remedy can prevent the property transfer until the mortgage obligation is properly resolved.
We recommend contacting Banco Popular immediately to alert them to the situation and requesting that they place an internal flag on your mortgage account noting the unauthorized payment arrangement and potential fraudulent activity. Puerto Rico banking regulations require financial institutions to implement safeguards against unauthorized mortgage assumptions, which provides additional protection in your case. Additionally, engaging a notary public to formally document the buyer's breach of contract terms creates essential evidence for subsequent legal proceedings while simultaneously establishing your diligence in addressing this matter promptly.RetryClaude can make mistakes. Please double-check responses.
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