3. NATIONAL INVESTMENT COUNCIL
INVESTOR'S GUIDE HONDURAS 2020 - 2021
3.3.6 GUARANTEE REGIME FOR THE COMPLETION OF PROJECTS ON REAL ESTATE IN DISPUTE The mechanism by which the State guarantees the completion of a project carried out on real estate in dispute. This process is free of charge. To benefit from this mechanism, the following circumstances must apply: a. The Developer of the project must have the permits and licenses required for said project; b. The Developer must have received funding for the project; c. The Developer must have started the related construction work; and once the construction of the Project has begun, if a third party not in possession of the property, initiates a judicial or administrative action to claim ownership of the property, the provisions for the regularization of buildings for public need contained in the Law for Property will not apply to them. BENEFITS i. Assurance of project continuity through the constitution of a Management Trust. ii. The recovery of investments made. iii. The sale or lease of units built or in construction. iv. The judicial or administrative action filed by third parties to solve the claim on the property is resolved by arbitration from a local arbitration center of the Chambers of Commerce, and under its rules and regulations. PROCEDURE a. The Affected Party presents the application of the Guarantee Regime for the Completion of Projects on Buildings in Dispute to the National Investment Council, with documents attesting the circumstances referred to in article 17 of the Law for the Promotion and Protection of Investments. b. The admissibility of the application must consider: • Once the request has been received, the National Investment Council must approve it, within a period of no more than forty-eight (48) hours.
• Once the request has been received and approved by the National Investment Council, it must inform by the Institution to the relevant court of the existence of the application, as well as the mechanism requested for the resolution selected (Trust or Judicial/Administrative Action). c. Once the CNI informs the relevant court of the existence of the application, said court shall suspend the claim proceedings for a period of fifteen (15) calendar days for the requested trust to be established, and to proceed with the respective registration where appropriate. Once this period has expired, the actions will continue their legal course. d. Constitution of the Trust must be done within 15 days, in which the administration of the Project according to the Trust itself will be determined, as well as any relevant circumstances affecting the project. Administrative costs, including the trusteeship commission, shall be deducted from the revenue generated by the project, or where applicable, covered by the applicant. The duration of the Trust shall be such as to guarantee the completion of the project, and it may be cancelled in advance if the dispute is resolved. e. Judicial or administrative action filed by the third party to resolve its claim on the property is resolved by arbitration from a local arbitration center of the Chambers of Commerce, and under its rules and regulations; it should consider two scenarios: • The Dispute shall be submitted to Arbitration in accordance with the provisions of the Law for Conciliation and Arbitration, as well as its rules and regulations (Legislative Decree No. 161-2000 and its Regulations). • With the "Arbitration Award", the CNI shall be notified if: a. If the resolution results favorable for applicant, the project must be closed following the agreements of the Arbitral Award. b. The decision results not favorable, she/he must compensate the investor for the damages caused to her/him.
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