Real Estate Investment Newsletter - January 2026

Constitutional Court Ruling

In its ruling on Case No. 00161-2022-PA/TC, dated November 18, 2025, the Constitutional Court upheld a petition for amparo (constitutional protection) filed by the petitioner challenging an eviction carried out against him by the National Superintendency of State Assets (SBN), pursuant to Article 65 of Law No. 30230. The SBN had managed to recover properties registered in its name extrajudicially, under this provision, even though the occupant also held a registered right to the properties in the Public Registry.

Regarding procedural matters, the Court held that the amparo process was the appropriate avenue to challenge this type of eviction if a violation of due administrative process is observed. On the other hand, addressing the core of the controversy, he clarified that the extrajudicial recovery provided for in Law No. 30230 is limited to invasions or illegal occupations and is not applicable to occupations protected by registered property titles, which enjoy a presumption of validity and enforceability under Article 2013 of the Civil Code. This presumption is fully applicable against the State.

This judicial ruling is relevant to real estate practice, as it defines the scope of the extrajudicial recovery of state property and strengthens the legal security of the registered owner against administrative actions carried out without prior judicial oversight.

Ownership by Adverse Possession

In this installment, we will address the declaration of ownership by adverse possession. We seek to determine whether the owner acquiring ownership by adverse possession requires an official declaration—notarial, administrative, or judicial—that establishes their right in order to assert it against third parties, or whether the lack of such a declaration prevents them from exercising that right.

First, it is important to delve into the role of adverse possession in the real estate market, as well as its effects under current regulations. This clarification is relevant considering that the real estate market is the primary means of accessing property, whether for purchase, lease, or any other permitted transaction. The market's social importance demands that it be taken into account when assigning functions to other legal mechanisms.

Similarly, the inviolability of private property, enshrined in Article 70 of the Political Constitution, also requires strengthening the real estate market. Only within this market are owners free to choose whether or not to transfer their property, at what price, and to whom. However, the legal system itself recognizes acquisition methods that operate outside the real estate market. Unlike these, the market is the only one that considers the owner's will. Expropriation or squatting renders it irrelevant.

Access to housing and property protection are strengthened by a robust and competitive real estate market. When property is acquired outside of this market, there is a potential infringement of rights, requiring caution when defending such rights. One example is adverse possession, a legal concept under which ownership of a property is acquired through possession, even without the agreement of the previous owner. Article 950 of the Civil Code establishes that ownership of real estate is obtained through peaceful, public, continuous possession as the owner for five years (good faith) or ten years (bad faith). It is, therefore, a legal method of acquisition that operates alongside the mechanisms of the real estate market.

Our legal system accepts the coexistence of adverse possession with the mass exchange of property, so it is valid to ask: what role does adverse possession play in protecting the real estate market? Does adverse possession, under a modern and functional perspective, disregard the rules governing the property market? Our position is that adverse possession plays an important role in the real estate market, making it a useful tool for all agents interacting within it. It is essentially a source of information, which is very useful for finalizing a transaction. Real estate transactions require adverse possession.

Indeed, the social role of adverse possession is not to confer ownership, but to prove it. It allows the owner to establish their pre-existing right in the absence of a title justifying their ownership. Civil law will deem them the owner, thanks to the possession for adverse possession they have maintained over the property, freeing them from having to prove the remote origin of their right. This ensures the safe circulation of goods, as the owner will easily prove ownership.

Adverse possession is designed to solve a very serious problem in the modern world: the scarcity and high cost of information. The owner is not always known, so complex investigations are necessary to locate them. Adverse possession fulfills this function, deeming the possessor the owner for the purposes of usucaption. Naturally, in those cases where this informational function is not fulfilled, the scope of the legal concept must be reconsidered, providing for exceptions or compensation schemes in favor of the affected owner, among other consequences. This would discourage the widespread and harmful trafficking of land.

Now, considering its social function, which is to establish ownership, it is necessary to determine whether or not an official declaration of its occurrence is required. And the answer is no. The Civil Code does not require a judicial ruling for this legal concept to be perfected. Article 952 establishes that the party claiming ownership by prescription may file a lawsuit to be declared the owner, confirming the declaratory—and not constitutive—nature of said pronouncement. The acquisition would occur once the legal requirements are met, without the need for a judgment or prior registration.

Despite this, some case law has required a final court judgment as a prerequisite for the enforceability of the right against third parties, confusing the existence of the right with its publicity or reinforced proof.

This requirement, not provided for by law, weakens the function of adverse possession as a formalization mechanism and ultimately affects the security of the real estate market, when the legal concept is precisely designed to strengthen it. Naturally, in some cases, a ruling will be necessary if the waiver or activation of the statute of limitations, the interruption of the statute of limitations, or its lack of enforceability against qualified third parties, such as bona fide registered third parties, is at stake. However, outside of these cases, ownership by adverse possession does not require such a ruling to arise, without prejudice to its evidentiary and publicity value.