P.R. Laws tit. 28, § 553d
Notwithstanding the provisions of § 553 of this title, and any other provision of law or regulations to the contrary, the usufructuaries and tenants of parcels established under Title V of this act may mortgage their usufruct or lease right on said parcels, in conjunction with the dwellings heretofore or hereafter constructed on said parcels, as collateral to the Farmers’ Home Administration of the Department of Agriculture of the United States of America, for the payment of any loan granted by said Administration for the acquisition, construction, repair or improvement of such dwellings. The registration of the building may be made through its description in a notarial certificate, in the deed constituting the usufruct or lease, or in the mortgage deed. The value of said works shall be exempt from the payment of any fee, under the notarial schedule or under the property registry schedule.
In the event of default in the payment of the loan, the aforesaid Administration may foreclose the mortgage constituted in its favor following the regular or summary procedure, as it may deem convenient, but only the Farmers’ Home Administration of the United States Department of Agriculture, and such persons as shall meet the qualifications required by law and regulations of usufructuaries of parcels under Title V of the Land Law of Puerto Rico can be bidders at the public auction held in such proceedings. The [bailiff] shall not execute a judicial deed of sale in the name of any grantee, except the Farmers’ Home Administration of the United States of America, until the Executive Director of the Housing Development and Improvements Administration certifies that the grantee has been investigated and meets the proper legal and regulatory qualifications. Any adjudication of property and usufruct rights auctioned in the name of any person who does not meet said requirements shall be null and void.
If no bidders attend the auction, and the property and usufruct rights so auctioned are awarded to the Farmers’ Home Administration of the United States of America, the latter shall grant the Housing Development and Improvements Administration, as well as to the persons who meet the qualifications required of usufructuaries by law and regulations under Title V, the first opportunity to acquire, by purchase, the property and rights thus judicially awarded. It shall, therefore, be the duty of the Housing Development and Improvements Administration to submit to the aforesaid Home Administration one or more of such candidates in each case who are willing to purchase the said property and usufruct right from said Administration, at the price and subject to the terms and conditions said Administration may best effect for the sale and financing thereof.
The subdivisions that may be needed to mortgage the usufruct or lease right in the parcels established under Title V of the Land Law, in conjunction with the dwellings heretofore or hereafter constructed thereon, to secure to the United States Farmers’ Home Administration the payment of any loan that said Administration may grant for the acquisition, construction, repair or improvement of said dwellings, shall be exempt from the provisions and regulations concerning subdivisions, pursuant to §§ 62 et seq. and 71 et seq. of Title 23, and Act No. 77 of June 24, 1975.
In those cases in which title deeds have been granted to the usufructuaries or tenants of parcels under Title V of this act and the property is encumbered by a mortgage in the name of the United States Farmers’ Home Administration, the latter may foreclose said mortgage following the regular or summary procedures pursuant to the Mortgage Law and Regulations in force as it may deem convenient, and without being subject to the conditions established in the preceding paragraphs.
History —Apr. 12, 1941, No. 26, p. 388, added as § 76-D on July 21, 1977, No. 14, p. 567.