Costa Rica Real Estate Frequently Asked Questions (FAQs)
Disclaimer: The following questions are a collection of real questions formulated to GLC over the years which we believe represent some of the most common questions that individuals interested in purchasing real estate in Costa Rica normally have. Our answers ARE NOT in any way legal advice, they are just general information provided as a reference so that the general public might obtain a better understanding of the process of buying property in Costa Rica. Any unauthorized copying, alteration, distribution, transmission, performance, display or other use of this material is prohibited. As Costa Rican lawyers, we are not allowed by the Costa Rican Bar Association from providing legal advice without the prior existence of a client/attorney relationship, in order to obtain legal advice for your specific case we encourage you to seek specialized legal advice.
1. I am interested in purchasing a house in Costa Rica in a Condominium in Guanacaste. I need assistance with the formation of an LLC and with the purchase of land/house. Could you help?
Answer: Costa Rica has the advantage of having a centralized National Registry where an extremely high percentage of all the properties are properly recorded. In order to purchase any property in Costa Rica, it’s extremely important to hire the services of a specialized real estate attorney and/or law firm so that they can conduct the corresponding Title Search on the property. That Title Search will provide at least the following minimum information:
- Property Number
- Rightful Owner
- The existence of Liens/Encumbrances
- Pending Lawsuits or Disputes
- Declared Value of the Property
- Transactional History of the Property and Origins of the land
An experienced Real Estate attorney will be able to review all that information and properly assess the exact status of the land.
In GLC we provide our clients with a written legal opinion as a result of the Title Search which indicates if we advise our client to proceed and purchase the property and/or if certain adjustments are necessary prior to payment.
After the Title Search results positive we proceed to draft the Property Transfer Public Deed so that both parties can agree on the exact acquisition terms and conditions. After the execution of the public deed, we file a testimony or official copy of the transfer at the National Registry for it to have public effects. Depending on the exact transaction the National Registry should record the changes and issue a new property title in approximately 1 week.
It is also very common for buyers to previously form a local corporation or company, normally due to its simplicity the recommended type of entity is called an SRL (Sociedad de Responsabilidad Limitada). The SRL has been compared to an LLC (Limited Liability Company) in Common Law. The SRL offers all the advantages of the more traditional SA (Sociedad Anónima) of the limited liability, asset protection from personal claims and/or lawsuits plus the fact that an SRL can be entirely managed by a single Manager or Director instead of appointing a full Board of Directors that normally for such transactions is not necessary. Foreigners are allowed to control 100% of the stock with no need for Costa Rican citizens to be part of the company except for the inclusion of a Resident Agent, who is normally the Notary Public that formed the company for the client. The Resident Agent’s sole role is to receive legal notices on the absence of the Manager of the company, in that sense the Resident Agent does not have any power over the company.
The company formation process is very straightforward and with GLC it’s entirely conducted via email and the registration is achieved in a record time of 24-72 hours after filing. The client is not required to visit the country for the initial formation and it’s highly advised to form the entity prior to visiting the country so that it can be ready to open a bank account or to purchase the asset.
2. My husband and I hope to purchase a property in Costa Rica which we would like to finalize in the next month. The current owners have an attorney helping them where they live. They are selling it to us for US$200,000.00. Can you please provide information regarding how this transaction would work? We will be starting a corporation to purchase it and already have a local who lives in the area who has agreed to be on our corporation. Also, is there a way to make payments instead of sending the money in full and if so, what do we need to do to proceed in that direction? Lastly, what would the cost be for your firm to handle the sale of the property?
5. We have located property in Costa Rica. Owner is willing to finance. He gave us the following two options to purchase. A) By means of a sale option (Promise of Sale) recorded in the Registry, until the interested party cancels the entire amount, then they would perform the corresponding transfer. B) Transfer of real property with mortgage. How should I proceed?
8. My wife and I are looking into purchasing 1/10 fractional ownership of a new villa that is part of a luxury retirement community in Costa Rica. We have the contract and are looking for a Costa Rican lawyer who can examine the contract and give us advice on any issues you might see. We want a lawyer to examine the contract before we purchase the real property. Can you help?
10. Hi, we are looking to buy either a foreclosed property or a typical residential property in Costa Rica. We are not in Costa Rica and plan to make the purchase remotely. Which attorney or attorneys in your firm have professional experience with purchasing foreclosed real estate from a bank? We would require to grant your firm a power of attorney as the plan is to purchase the property under personal name.