Real Estate Investment Newsletter - October 2026

On October 7, 2026, Ordinance No. 2860 of the Metropolitan Municipality of Lima was published, approving the Lima East Urban Development Plan 2026–2036 (PDU), which entered into force on October 8, 2026.

Among its main provisions, the PDU approves new zoning regulations for the districts of Ate, Chaclacayo, El Agustino, La Molina, Lurigancho-Chosica, San Juan de Lurigancho, and Santa Anita, while preserving the zoning classification and authorized use of establishments holding a valid operating license. It also updates the Metropolitan Road Network of Lima East and provides that road-related restrictions be registered as technical encumbrances in the registry entries of properties wholly or partially affected by the corresponding regulatory road sections.

Furthermore, the PDU establishes obligations for district municipalities, including supplementing the Index of Uses and Urban Activities and approving the Regulations on Operating Levels within 180 days, as well as preparing their District Urban Development Plans and regularizing the legal status of their municipal properties within 360 days.

Finally, it provides that pending proceedings concerning urban development, building, and operating licenses shall remain subject to the regulations in force at the time they were initiated until their completion.

On October 29, 2026, Bill No. 00708-2026-2031-CD was introduced, proposing to establish, on a one-time basis and for a period of five years, an exceptional regime for the formalization of state-owned properties in the private domain that are available for disposal, intended for residential use, and occupied by low-income individuals or families. The proposal would allow occupants to acquire ownership of such properties upon demonstrating public, peaceful, continuous, and uninterrupted possession for at least ten years, notwithstanding that Law No. 29618 currently establishes that state-owned properties in the private domain are not subject to acquisitive prescription.

The regime would be limited to direct possessors who use the property primarily as a family residence, do not own any other property, and meet the socioeconomic criteria to be established by the regulations. Excluded from its scope would be, among others, public-domain property, properties allocated for public use or reserved for public works or investment projects, protected natural areas, assets forming part of the cultural heritage, properties located in areas classified as non-mitigable risk zones, and land belonging to peasant and native communities.

In this section of our newsletter, we address the declaration of ownership by acquisitive prescription. In particular, we analyze how such declaration may be formalized through an out-of-court settlement and whether such instrument is sufficient to gain access to the Public Registry.

Possessors who have met the requirements set forth in Article 950 of the Civil Code to acquire ownership through acquisitive prescription may prefer to avoid judicial proceedings and instead reach an agreement with the person appearing as the registered owner. The question is whether such agreement may serve as a declaratory instrument of ownership and, subsequently, provide sufficient grounds for registration.

The first issue requires determining the legal nature of any agreement between the possessor and the registered owner. Acquisitive prescription entails an original mode of acquisition: the person acquiring ownership by prescription does not derive ownership from the registered owner, but rather acquires it as a consequence of their possession and compliance with the statutory requirements. This principle is reflected in Article 952 of the Civil Code, which allows the adverse possessor to seek a judicial declaration of ownership and, on the basis of the resulting judgment, the cancellation of the former owner’s registry entry.

From this perspective, an agreement with the registered owner cannot be structured as a sale and purchase, donation, or other transfer of ownership, as this would entail recognizing the registered owner as the owner and acquiring title from them, thereby undermining the effectiveness of acquisitive prescription. Instead, the agreement should be structured as an acknowledgment of ownership, whereby the registered owner acknowledges that the possessor has acquired ownership by prescription upon satisfying the statutory requirements.

Such acknowledgment of ownership may be formalized through an out-of-court settlement. Pursuant to Article 1302 of the Civil Code, through a settlement, the parties, by making mutual concessions, resolve a matter that is uncertain or in dispute, thereby avoiding litigation that could otherwise be initiated or bringing existing proceedings to an end. Accordingly, a dispute over ownership of a property between a possessor who claims to have acquired ownership and a registered owner who denies such acquisition may be resolved through a settlement. The parties may agree that the registered owner acknowledges the acquisitive prescription, while the possessor makes the corresponding concessions, thereby putting an end to the dispute.

Entering into a settlement does not alter the legal nature of the acquisition. The ownership acknowledged does not derive from the will of the registered owner, but from the acquisitive prescription that would have taken place beforehand. The settlement merely enables the parties to resolve their existing dispute and acknowledge the legal effects of that legal institution. This clarification regarding the scope of the instrument is particularly relevant when the rights of the registered owner are challenged by third parties, for example, due to overlapping registry entries or similar circumstances.

Having established the declaratory nature of the instrument, it is necessary to determine whether it may be registered. Article 2019 of the Civil Code provides that acts and contracts that create, declare, transfer, extinguish, modify, or limit rights in rem over immovable property are eligible for registration. In this regard, the Registry Court has accepted the registration of agreements acknowledging ownership, as there is no legal prohibition against entering into such agreements. Naturally, registration will be possible provided that third-party rights are not affected and the acknowledgment results in a modification of the registered legal position, since merely confirmatory acts are not eligible for registration.

The fact that the acknowledgment is incorporated into an out-of-court settlement does not alter this conclusion. Where the parties acknowledge, through such settlement, a legal situation that differs from the one reflected in the Registry, the instrument has declaratory effect and modifies the registered legal position, which, in principle, justifies its registration. Naturally, the settlement will be binding only upon the parties thereto, since contracts produce legal effects between the parties who enter into them and their heirs.

In conclusion, an out-of-court settlement with the registered owner may constitute a valid means of registering ownership acquired through acquisitive prescription. It does not transfer ownership; rather, it acknowledges an acquisition that has already taken place. Such acknowledgment, as a declaratory act, may be registered and contribute to the regularization of title to the property.