VZCZCXYZ0004
RR RUEHWEB

DE RUEHMU #1947/01 2322056
ZNR UUUUU ZZH
R 202056Z AUG 07
FM AMEMBASSY MANAGUA
TO RUEHC/SECSTATE WASHDC 1054
INFO RUEATRS/DEPT OF TREASURY WASHINGTON DC
RUCPDOC/DEPT OF COMMERCE WASHINGTON DC
RUEHZA/WHA CENTRAL AMERICAN COLLECTIVE

UNCLAS MANAGUA 001947 
 
SIPDIS 
 
STATE PASS USTR 
 
SENSITIVE 
SIPDIS 
 
E.O. 12958: N/A 
TAGS: EINV ECON USTR KIDE NU
 
SUBJECT: QUESTION: "SHOULD YOU BUY REAL ESTATE AND RETIRE IN 
NICARAGUA?" 
 
¶1. (U) Summary and Introduction: For two years, Grace Brunton 
occupied a one-of-a-kind job at Embassy/Managua, that of Economic 
Officer-in-charge of helping American citizens obtain settlements 
from the Nicaraguan government for property expropriated during 
Sandinista rule in the 1980s.  Despite the lingering history of 
expropriation and a multitude of legal problems surrounding land 
titling, Nicaragua received considerable attention during Grace's 
tenure as the next great low-cost tropical retirement destination 
for U.S. citizens.  Most agree that this newfound interest is due 
largely to the simple fact that Nicaragua lies just north of Costa 
Rica, a popular, but increasingly more expensive, retirement 
destination for Americans in its own right. 
 
¶2. (SBU) Before Grace retired from the Foreign Service in July at 
age 65, we asked her to assess Nicaragua as a retirement 
destination.  The result, which follows in paragraphs 3-10, 
comprises Grace's final report to Washington as a Foreign Service 
Officer.  In addition to providing a number of important insights 
into the Nicaraguan political and legal dynamic, Grace showcases her 
wit and literary flair.  Her answer to the question, "Should You Buy 
Real Estate and Retire in Nicaragua?" is a resounding, but colorful 
"No."  For Grace, Nicaragua simply presents too many legal risks and 
not enough authentic culture.  End Summary and Introduction. 
 
The Short Answer Is "No" 
------------------------ 
 
¶3. (SBU) Since arriving in Nicaragua in 2005, Grace frequently heard 
that there are significant risks in purchasing real estate in this 
country.  Prospective buyers are admonished by websites, 
acquaintances, and even sellers that they should "exercise caution" 
before committing to land investments.  Nevertheless, for the 
duration of her two-year stay, Grace frequently came across glossy 
brochures displaying happy buyers frolicking in their own tropical 
wonderland, free of problems, rum in hand; due diligence be damned. 
 
¶4. (SBU) The flip side of the availability/mythology of cheap land 
in Nicaragua is that the ownership of many properties is still in 
dispute.  The 1979-90 Sandinista government expropriated some 30,000 
properties.  Deeds and titles on these and many other properties 
remain ambiguous or, in many instances, actually fraudulent. 
Although the government has resolved several thousand claims of U.S. 
citizens through compensation or the return of real property, there 
remain hundreds of unresolved cases registered with the U.S. 
Embassy: close to 700.  New cases involving American citizens 
constantly pop up. 
 
¶5. (SBU) At first blush, one can easily understand how a "buy low, 
sell high" mindset would draw U.S. speculators and land developers 
to Nicaragua.  The relevant question, though, is "How is it working 
for you?"  Unfortunately, while buying low (relative to purchases in 
Costa Rica, Panama, or Florida) is possible, securing proper title 
in Nicaragua carries many more costs than the average Central 
American vacation spot.  De facto and even de jure possession 
rapidly turns tenuous when armed invaders show up on the scene, as 
they are often unfortunately wont to do. 
 
¶6. (SBU) When an irresistible property purchase goes sour and winds 
up in court, the judicial system offers the foreign buyer little 
relief.  The Embassy is aware of innumerable cases in which buyers 
purchased property supported by what appeared to be rock-solid 
titles -- only to find themselves subsequently embroiled in 
litigation after the titles were contested by an affected, or 
otherwise interested, third party.  Coastal properties, the most 
valuable sites because of the potential for tourism, seem to find 
their way in significant numbers to the courts, whose process is 
complicated by non legal factors such as fear, greed, corruption, 
and politics.  Litigation can leave buyers in the spotlight, in the 
headlines, in well over their heads, and in an endless maze of 
courtroom maneuvering.  (Unceasing judicial scrutiny and even 
physical threats are nothing new when it comes to property disputes 
in Nicaragua.)  Sometimes, armed squatters simply set up 
housekeeping, confident that police and/or judicial authorities will 
be unable or unwilling to act. 
 
¶7. (SBU) Under the circumstances, it is hard to imagine not heeding 
the Embassy's strong warning to exercise extreme caution when it 
comes to purchasing property in Nicaragua.  Newspaper stories 
reporting corruption, political pressure, influence peddling, and 
shootings abound.  Despite this warning and common sense, there are 
Americans who ignore their better angels, fall victim to temptation, 
and sometimes wind up contributing their own human frailty and moral 
slipperiness to the legal morass that engulfs Nicaraguan real 
estate.  For retires looking for a happy ending, it is maybe smarter 
to read a good book than to study glossy Nicaraguan real estate 
brochures. 
 
 
 
The Long Answer Is "No Way" 
--------------------------- 
 
¶8. (SBU) There are other factors to consider.  Nicaragua is 
certainly not a nation that can boast a full measure of 
stereotypical Latin American "quaintness"--retirees should not 
expect to find a Nicaraguan version of San Miguel de Allende or 
Antigua.  War, poverty, and natural disasters have taken their toll. 
 While Leon and Granada have been given face lifts, downtown Managua 
has yet to be truly rebuilt after the devastation of the 1972 
earthquake.  Indeed, Nicaragua offers the risk of earthquakes, live 
volcanoes, hurricanes, dengue fever, and malaria.  If the dengue 
does not get you, the next earthquake surely will. 
 
¶9. (SBU) Emblematic of Nicaraguan cuisine is the bean and rice combo 
Gallo Pinto, named after a black and white guinea fowl and possibly 
the best candidate for most-favored-food status.  Though 
gastronomically iffy for some unadventurous American palates, it is 
reasonably priced and more authentically "Nica" than southern fried 
chicken, Domino's Pizza, or plastic-wrapped multinational cyber chow 
with an indeterminate shelf life, all of which abound in Nicaragua's 
larger cities. 
 
¶10. (SBU) This embrace of North American fast food, coupled with 
distance from the residual European charm present farther south in 
sister Latin American republics, suggest that Nicaragua is still 
simply not a top-flight retirement destination.  As Grace has 
observed, "Until they get the spam out of the gourmet section in my 
local supermarket, my considered opinion is that Nicaragua is not 
ready for American prime time." 
 
TRIVELLI