Real Estate Investment Newsletter - August 2025

Bill No. 12138 proposes to amend Articles 202° and 230° of Law No. 27444, the General Administrative Procedure Law.

The bill proposes to modify the deadlines for the public administration to declare the nullity of administrative acts ex officio. The current statute of limitations is two years from the date of consent to the act, and an additional three years to file a claim for nullity with the Judiciary. The proposal seeks to shorten the deadlines: the administration would have six months from the issuance of the act to declare its nullity ex officio and another six months from the expiration date to file a claim with the Judiciary.

Constitutional Court ruling, Case No. 00010-2024-AA/TC, on the validity of a donation contract not recorded in a public deed.

On June 6, 2025, the Second Chamber of the Constitutional Court declared partially valid the appeal for protection against Cassation No. 3793-2013-Cajamarca, which had annulled a donation of real estate because it had not been formalized by public deed.

The donor signed the draft deed before a notary and witnesses, but died suddenly before it was formalized by public deed, as required by Article 1625° of the Civil Code.

The Court concluded that the lack of formalization was not attributable to the donor, who died suddenly, and that his intention to donate was fully proven. In exercising the constitutional rights to property and contractual freedom, it was determined that the requirement for a public deed cannot prevail when it is physically impossible to comply with it. Consequently, the court established that the public deed would apply under normal conditions and cannot prevail over constitutional rights when there is a material impossibility of compliance.

The mechanisms for formalizing land ownership are aimed at regularizing the occupation of natural and legal persons. However, the question arises as to whether they can also benefit collective organizations that are not constituted as legal persons. Among these are villages.

In principle, Supreme Decree No. 191-2020-PCM defines villages as populated centers. That is, territorial areas where people settle with a certain degree of organization and a desire to remain. It is a form of territorial demarcation, along with towns, villages, cities, and metropolises. In abstract terms, these territorial boundaries lack legal personality.

However, although they are not legal entities, in practice it has been found that they exercise rights and enter into relevant legal acts. Certificates of ownership are issued in their favor, they sign agreements with public and private entities, and they even participate in agreements related to extractive activities. All of this background information requires that their actions be recognized as subjects of law.

A legal alternative for treating them as subjects of rights is to categorize them as unregistered organizations of persons (OPNI), a concept provided for in the Civil Code. This concept allows legal subjectivity to be granted to groups that, without formal registration, act as true subjects of law. To this end, it will be necessary to assess whether these organizations meet the following three minimum requirements:

The concept of the OPNI, which is unnamed and flexible in nature, has been developed doctrinally by various authors, who attribute to it a general purpose. In other words, it goes beyond the principles of legality and typicality, which are characteristic of legal persons. This concept allows for the organizational reality of villages, among other substantially organized spaces, to be accommodated, recognizing their legal capacity.

As a result, contracts may be entered into with these organizations without the risk of nullity due to lack of a capable agent. Likewise, they may be treated as administered before the authorities, among other conditions.

If this concept is not recognized, other less convenient rules would have to be applied. For example, treating all the people who make up the hamlet as mere co-owners and, therefore, applying the unanimity rule to carry out acts of disposal. This rule is impractical for many investment projects. The other option is to treat them as rural communities, although this requires verification of certain ancestral practices, collective work, or other common interactions, which is not always possible. Given these difficulties, the ideal solution would be to treat them as direct subjects of rights, without having to resort to other legal concepts.

On the other hand, from a public policy perspective, categorizing hamlets as unregistered organizations of individuals is also socially desirable. In many cases, hamlets are the only collective entity with the capacity to organize in rural areas. Their legal recognition would make it possible to channel investments, implement development projects, and guarantee legal certainty in land tenure, without having to force them to conform to legal entities that do not reflect their reality.

This proposal does not seek to alter the principle of legality governing the creation of legal entities, but rather to broaden the spectrum of collective legal entities recognized by law. In this sense, villages can be treated as legal entities provided that the minimum requirements mentioned above are met. Naturally, each case will have to be evaluated individually. This is not a general rule.