Real Estate in Cuba
Cuba is a country in an island only 90 miles south of the United States, became a communist regime under totalitarian rule over fifty years ago. Expropriated personal, business , and Real Estate property from its citizens,foreign residents, and foreign countries like United Estates under absurd and unjustified pretenses and never paid a cent of its value to anyone. They only achieved failure, waste, and disruption of lives and wealth. Natural resources have been depleted and damage to the ecology and environment have rendered the value of land worthless for modern use and development. Commercial buildings of beautiful Spanish , French and U S architecture have been allowed to deteriorate for lack of maintenance all over the country.
Modern farming and commercial enterprises at par with the rest of the world in efficiency and productivity became a product of a system reflecting similar failures in countries taken by Russia after the second world war. Which set back their progress for years behind most civilized countries. Russia’s failure in Cuba to make it a satellite played a role in its downfall as the leading communist state.
Cuba’s refusal to compensate for expropriations from the Unites States and all other countries that had investments in Cuba forced the United States to impose an embargo on Cuba, as a result, all credits and trade agreements were suspended, all credits, deposits, and monetary accounts of Cuba in U S banks, were frozen. and trade stopped. between the two countries. Capital fled by every possible means until the Cuban revolutionary government learned ways to stop the flow of funds in convertible currency like US dollars which had free exchange and circulation at par with the Cuba currency (peso). But land and buildings could not leave the country nor could they be sold to take their monetary value out of the country because the revolutionary government took control of all banks, property records, and converted the (peso) currency to a new peso of lower value making worthless and illegal the old (peso) currency.
Since then, obviously all property may not belong to the revolutionary government but they have full and absolute control over it. In the future will this change? the answer is yes.
Cuba had a preferential supplier quota of sugar to the US that had been earned by Cuba’s l support to the US during the war years when Cuba was ruled by democratic governments. That sugar preferential vendor quota to the US had been the agreement that made Cuba one of the best economically developed countries in the world and the second highest per capita income of the American continent. Cuba’s preferential sugar cuota was taken away and given in parts to four other countries in Central and South Latin America.
Russian economy was unable to sustain Cuba because their methods of development, production and distribution were never followed by a Cuban population set in the capitalistic ways of its closest and profitable trading partner the U S .
Real Estate starts with land and its best and highest use. if you buy raw land ,and pay a market price you will not realize a profit when you sell it unless the economy around it improves, or unless you change its use to a productive purpose. Because in a communist country all property belongs to the state and every citizen is under control of the state or the government,there is no personal initiative, interest, and much less freedom to perform, and do the best a person can do to improve his or her life and that of its family. Therefore at the individual level in Cuba, Real Estate has no value. Since Cuba controls all property from raw land to improved Real Estate be it Industrial, Commercial, or public service facilities. The Cuban government owns everything, and manages every producing element that keeps the country operating. They do it mainly by use of the members of the armed forces who have gradually substituted the regular workforce members of the Cuban society. Like in most countries including the US soldiers are paid lower than civilians regardless of job performance.
In Cuba, every citizen has to serve in the military, in a country where private enterprise is not permitted and anyone caught operating a private business is arrested,prosecuted, and given a jail term, the average citizen has minimal choices in life .
School is free, but most of the curriculum is political indoctrination to eventually feed the workforce, which is the army ,they claim a free public health system of high quality, but it is not true, they put through free school, many doctors who never get a supervised practice and are sent to poor countries to serve people but in essence they practice their specialty without responsible supervision. Cubans have few choices, the army, a social work profession like to be a militant observer of their family and friends,a doctor with no practice, engineers with no jobs or a mere survivor in a society without private enterprise.
. When an individual can not follow the mentioned few choices this person becomes what they call in socialist country terms an “Anti Social” it means that person under much tolerance works when they find something to do like repair a car or household item, deal in black market of consumer items, and steal from the government anything that an army friend will let go unnoticed. When we examine this reality it is understood why so many risk everything to get out of the country by any means. A raft floating out to the Florida keys or Mexico, by marriage to a foreigner, or becoming a citizen of another country like Spain because of somehow proven ancestry.
Real Estate in Cuba was started as a colony of Spain, the early settlers who had the interest to raise cattle, or farm tobacco choose an area of land where of course were no fences. To claim a parcel of land a person could take a stick and throw it as far as it could and then mark a circle all around and measure the land inside the circle this was called a Hato or Corral, and it was then registered as a parcel of Real Estate it was a rudimentary way of knowing who owned the land so the system lend itself to numerous claims, with no solution in sight. We have to credit the late college professor and PHD in Commercial Science, Mr. Paulino Urbieta who as his thesis at the University of Havana made Real Estate and many other items of valuable research back in the year 1940 to continue improving and keeping better public property and statistical records using the metric system of measurement . It was prior to that year when properties started to be registered more accurately and measured by agronomists. Registration was done by a Notary Public who contrary to the method in US a Notary Public in Cuba had to have the same university credits as a lawyer, in essence, being a Lawyer in Real Estate Guardian of property records.
When the communist revolution came to Cuba in 1959, the government used property records only to distribute property in any way they saw fit to their particular plans and uses. Therefore most property records in Cuba are in deplorable disarray.
Many Cuban exiled second and third generation attorneys and realtors have been able to bring out Cuban property registration records of land, buildings and prime Real Estate with the purpose of establishing claims to recover properties taken away from their original lawful owners by the now fifty year old communist government.
The fact that over fifty years have passed under communism in Cuba shows only an struggle in this continent between Capitalism and Communism, something that Europe has experienced and continues to have in a somehow cooler confrontation, and now being called Socialism. It is spreading all over Latin America and becoming a threat to peace, democracy, and a peaceful social order in the region, it affects a person’s right to Real property which is the starting point of progress , and a better life.
When Cuba and US move towards improved relations and US interests change, Real Estate will continue to be a value that can only function if its owners have their rights to use, sell, and pass it on to heirs.
For years to come Cuban Real Estate will continue to be a property very difficult to determine who owns it since the Cuban government has leased it to foreign investors, hotels and light industries have been built on it and rights to use have been given to other countries, even enemy countries of the US. Eminent domain is most common and the only way to designate the use of Real Estate in Cuba.
The fact that Cuba is only 90 miles away an small island surrounded by water and now part of the global economy and a spring board for other countries with ambitions, to resources and political domination in Latin America, sooner or later the US government, its people and allies will have to confront not what eleven million cubans have done but what a few thousand who make up the Cuban now called socialist government have done with the Cuban people and are responsible for having taken Cuba back in time and progress to the point of having reduced it to the second poorest country in the continent.
The Cuban people live in housing below our “Marginal” description of condition,several families of ten or more share homes built for one family and several homes share only one bathroom people sleep in bunks one over the other in two or more levels under one roof. People can not move from a home to another much less buy it so everyone rents from the government. When a real need comes for a larger or smaller home the family head goes to the housing government office but there never is a vacancy, the country is behind housing needs by unknown thousands of units. So a lot of illegal and tolerated housing activity goes on the streets or mainly in the towns central park.
Example- a typical “Anti Social” citizen knows someone who needs a larger house so at the public park he passes the word and soon someone shows up with another house or apartment to trade, they make a verbal agreement and pay a commission to the third party finder , then they go to the government office and request permission to make the switch which they usually obtain, as a result, that is the typical everyday way that a Real Estate transaction can be made in Cuba. by citizens.
In a very limited number Spain citizens have leased prime land and built condominiums for seasonal occupancy by tourists where the Cuban government is always a 51 % owner. it is doubtful that in a change in Cuba that this investors will be able to establish any legal claims from a new government, be it communist or capitalist.
For the next several years Cuba Real Estate will remain one of the worst investments anyone can make. For second homes, retirement homes , investments in resorts or any other Real Estate investment.
There are countries where Realtors who are professionals certified international property specialists members of the National Association of Real Estate and of their State and local association can provide an investor, buyer or seller of Real Estate a wealth of advise to reach a worthwhile and safe investment.
Juan Selaya-Broker Realtor-Certified International Property Specialist
J.A.S. Properties Marketing Corp- 601 E Chaminade Dr. Hollywood, Florida 33021 U.S.A.
T 954 966 5529–Fax 954 962 1524– Mobil 954 649 4063