Real Estate Investment Newsletter - November 2025

Draft Amendment to the Regulations of Law No. 31145: Physical–Legal Regularization and Formalization of Rural Properties

The Ministry of Agrarian Development and Irrigation has submitted a draft Supreme Decree amending the Regulations of Law No. 31145, with the primary objective of aligning the regulations with the recent legal provisions introduced by Law No. 32371 and Law No. 32434. These laws extend the possession period for accessing the formalization of rural properties and arable land until December 31, 2020, and promote the productive and competitive transformation of the agricultural sector.

The regulations also expressly exclude public domain areas, protected zones, archaeological sites, and other sensitive areas from the procedure, in accordance with current sectoral and environmental regulations. A differentiated system is established for determining the allocation value of the land, benefiting small producers and associative forms.

Furthermore, a procedure is being incorporated to allow Regional Governments to assume ownership of state-owned properties, even in cases where legal proceedings are underway or have concluded, facilitating the management and resolution of these cases in coordination with the Public Prosecutor's Office.

Municipal Authorizations in Rural Areas

Land-use planning in Peru has been characterized by a strong urban focus, leaving rural areas in an ambiguous regulatory space. This lack of clarity has created practical problems for those developing investment projects outside of cities, from tourism ventures to large-scale infrastructure investments. Legislative Decree No. 1674, which amended Law No. 31313, the Sustainable Urban Development Law, seeks to correct this omission by incorporating rural planning as an essential part of land-use planning. In this regard, it grants municipalities the authority to regulate rural areas and require permits for each construction project erected within them. This expansion and/or complementation of municipal powers is not always positive.

Indeed, although the regulation introduced by Legislative Decree No. 1674 is general in nature, it seeks to establish a framework for municipalities to require permits for all types of construction and activities, both urban and rural, carried out in rural areas. That is, in areas not incorporated into the urban fabric. This means that areas of the national territory that have historically been outside the scope of urban regulations could be subject to administrative procedures similar to those applicable in cities.

Considering that the Peruvian legal system only recognizes three main municipal permits—urban development permit, building permit, and operating license—it could be interpreted that the regulation seeks to extend the application of these permits to rural areas. This approach raises questions about its appropriateness: Is it necessary to impose the same requirements in areas where the economic and social dynamics are different? To what extent does this extension contribute to territorial planning rather than simply creating new bureaucratic barriers?

In theory, regulations aim to ensure regulatory consistency. However, in practice, is it reasonable to require urban development and building permits—designed for densely populated areas—in rural zones, where density is minimal and the economy depends on flexibility? This lack of proportionality could turn a planning tool into an obstacle to local development.

In Resolution No. 0534-2024-SEL, Indecopi declared illegal the requirements for an urban development permit and a building permit on rural land for a well-known restaurant. This case demonstrated that imposing requirements designed for urban environments in rural areas can become a bureaucratic barrier rather than a planning mechanism.

With Legislative Decree No. 1674, the intention is to subject the entire Peruvian territory to orderly planning. However, this regulatory uniformity risks overlooking the particularities of rural areas, where the logic of development does not always coincide with that of urban areas. While territorial planning is essential to prevent disorder and protect resources, it is equally important to ensure that regulations do not become obstacles to investment and local development. The real challenge lies in designing proportionate rules that recognize the diversity of the Peruvian territory and do not impose unnecessary burdens in areas where economic activity depends on agility and adaptability.

To achieve this balance, it is urgent to have a general law regulating permits for rural construction, establishing clear and simplified procedures subject to tacit approval. This mechanism would harmonize two objectives: on the one hand, the need for territorial regulation and planning; on the other, the viability of investment projects that stimulate the local economy. Proportional and efficient regulation would not only avoid excessive bureaucratization, but would also contribute to sustainable and competitive territorial development.

For those operating in rural areas, this change means anticipating developments: closely monitoring the approval of territorial plans, assessing their impact on project viability, and participating in the debate on how to regulate without stifling progress. Rural planning should not be synonymous with bureaucracy; it should be a tool for balanced and sustainable development.