Subdividing with a partner, by service or with management
Having land to subdivide does not force you to choose between selling and giving away a part. There are three ways to organize the project and the best one depends on how much capital you have, how soon you need to collect and how involved you want to be. We walk you through all three, with what the law says in each.
The three models
By service
You hire parts of the project (plans, paperwork, works) at an agreed price. You own 100% of the land and of the sales, and also bear the investment and the risk.
Project management
You provide the money and the technical team directs the paperwork, works, costs and deadlines for a fee agreed in writing. You keep the property and control of the decisions.
Partnership
You contribute the land and the development partner contributes the project and its execution. Results are shared according to the contract. It requires great care with the paperwork: who sells, who collects and how accounts are rendered.
How to choose
Depending on liquidity, available capital and time. Below is a guide by profile.
Which one fits your situation
- You have capital and want to keep everything: by service or with management.
- You have the land but not the capital for the works: partnership, or financing the works with the first sales.
- You do not want to deal with paperwork and works: project management.
- You need liquidity soon: analyze direct sale first; subdividing takes time before you collect.
Before deciding, run the numbers with the economic feasibility of the subdivision. We do not promise returns: it depends on sale price, costs and sales speed.
What the law protects and what it does not
- Clean title: a subdivision is not approved with an attachment or litigation, and if there is a mortgage the creditor's consent is required (art. 241 of Law 3966/10).
- Installment sales: the approval resolution must be registered as a marginal note and the standard contract with the Public Registries (art. 250). Once the contracts are registered, the property is unavailable: it cannot be sold, leased or encumbered (art. 253).
- Buyer's rights: the buyer can demand the deed upon paying 25% of the price, with a mortgage in favor of the seller for the balance (art. 255).
- Seller's bankruptcy: installment contracts are enforceable against creditors (art. 258).
This means that, if your partner stays as the seller or if the property is transferred to a company, the paper you sign defines who is exposed. That is why a lawyer should review the contract before signing.
The trust as an alternative
Law 921/96 allows trusts: the settlor delivers assets to a trustee to manage or dispose of for a defined purpose. If a property is transferred, the transaction is perfected only by public deed and registration of the title (art. 4). It can set who manages and how results are shared, but it does not replace the lawyer: it must be defined case by case.
What the contract must say
- Exact scope: what each party does and does not do.
- Deadlines and what happens if they are missed.
- Who pays for the paperwork, the works and the unforeseen.
- How it is collected, who invoices and who withholds the taxes (see taxes when selling lots)
- How accounts are rendered and how often.
- Guarantees and how to exit the agreement.
Our subdivision project management service is agreed in writing before starting, with scope, fee and form of reporting. We do not publish general percentages because they change with the size of the project.
Frequently asked questions
What is a subdivision joint venture?
It is a company or associative contract in which the landowner and a developer share the results of the project. In Paraguay it is set up using general figures (company, associative contract, trust), not a specific joint venture law.
Can I subdivide without giving up part of my land?
Yes, by paying by service or with project management. You finance and keep the property and the sales.
What risk does a partnership carry for the landowner?
It depends on the contract: who is the registered seller, who collects the installments and how accounts are rendered. The law protects the buyer and orders the registrations, but it does not replace a well-drafted contract.
How much does project management charge?
It is agreed in writing before starting and depends on size and scope. There is no single rate.
Sources
- Law 3966/10 Municipal Organic Law, consolidated text
- Law 5346, amends arts. 245, 246, 248, 250, 255 and 258 of Law 3966/10
- Law 921/96 on Fiduciary Business
Notice. Informational content with rules consulted on 09/29/2026. Deadlines and values are indicative and vary by municipality and service provider; always confirm with the municipality or the relevant body. It does not constitute legal, tax or engineering advice, nor a promise of profitability. Last updated: September 30, 2026.