Buying Land and Real Estate in Costa Rica
In Costa Rica foreigners have the same absolute right to own real property as citizens do.
Most countries have restrictions on foreign ownership of real estate but not Costa Rica. Here all people, Costa Rican
and foreigners have the same legal rights, which are protected by the Constitution and reflected in the laws.
When purchasing property in Costa Rica, proper registration of
the property, and not the deed itself, is of the utmost importance. Simply
because an individual may have a seemingly "legal" title to a property in
his/her name, does not necessarily mean that he/she is the legal owner. Like
anywhere else in the world, there are scam artists who attempt to sell the same
real estate numerous times. It is therefore necessary to conduct a thorough
investigation of a prospective piece of property as outlined below.
Costa Rica has a Civil Law system rather than a Common Law
system. The practical differentiation between the two systems is that Civil Law
is much more rigid than Common Law, making the procedure frequently more
important than the substance. Such a distinction is of utmost concern when
purchasing Costa Rica real estate, for the letter of the law must be followed
precisely when registering property in order to obtain the full legal title. All
property is registered at a central depository called the Registro
Puiblico, and it is there that one should begin the title search for a
parcel of land.
When buying Costa Rica real estate you need to be concerned
about the following issues:
A- Status of the property: The first thing that one needs to
do is to check the actual condition of the property. Is the property really
owned by the person who claims to own it? In the Public Registry you will find a
report, called the "Informe Registral," containing information such as the name
of the title holder, boundary lines, tax appraisal, liens, mortgages, recorded
easements, and other records that could affect the title.
B- Recorded Survey: The second step is to check the status of
the survey of the property. Many properties have surveys recorded years if not
decades ago and thus are not as accurate as one may want. Make sure the area
stated on the survey matched the area recorded on the Public Registry. If it
doesn't as it often happens, make sure you find out why those areas don't match.
C- Sale and Purchase Agreement: If you are not ready to close
on the property immediately, you might want to consider signing a sale and
purchase agreement (SPA) to tie down the property. SPA will be signed by both
sellers and buyers and terms and conditions will be included in details.
Usually10% of the sale price is given as a deposit held in escrow until closing.
D- Deed of Transfer: At closing, both seller and buyer will
grant the deed of transfer before a Notary Public. The Notary Public will in
turn submit a copy of the deed to the Public Registry for recording.
Title guaranty services are now available
through Stewart Title Guaranty Company, based in San Jose de Costa Rica, the
capital. Stewart Title advertises escrow and title guaranty services to protect
the consumer throughout the process of acquiring land, and to indemnify him/her
for losses that may be incurred. Stewart Title is a 105-year-old U.S. company
based in Houston, Texas, with over 3,500 offices in the U.S. and abroad.
|
