Costa Rica Real Estate Law
Costa Rica Real Estate Law recognizes the full right to ownership of the real property to nationals and foreigners equally. With a centralized property recording system, the government operates a public National Registry which provides a clear view of the exact status of specific properties, including details such as ownership of Costa Rican title to land, existing liens, annotations, and/or mortgages among others; which might exist against the property.
Steps to Purchase a Property in Costa Rica
Even though it is a must to consult a qualified Costa Rican real estate lawyer, the following basic step by step procedure towards purchasing property in Costa Rica will allow you to better understand the details involved:
Step 1: Costa Rica Title Search
Once you have identified a specific piece of property of your interest, please request the seller to provide all the basic information of the property including the complete name of the registered owner, property title number, and copy of the registered survey map. With that information, your specialized Real Estate Attorney and Notary Public should carefully review and analyze the results retrieved from the initial Costa Rica title search in order to clearly establish the status of the property towards a possible purchase.
Step 2: Purchase Offer or Option to Buy
In most cases, if the title search results are positive, it is suggested to have your Costa Rican real estate attorney draft an Option to Buy to place an earnest money deposit. The Option to Buy will set forth the conditions and the terms of the offer to the seller. If the parties agree mainly on a specific price and on a timeframe to achieve this, the agreement will be signed, a deposit will be made with a Costa Rican escrow or with the seller, and once the obligations are reached, the parties will be ready for the next step.
Step 3: Closing
The buyer’s Real Estate Lawyer who is also a Notary Public is normally responsible for drafting a public deed acting on behalf of the State. Even though Notaries are supposed to be impartial, and in that sense, you could have the seller’s Notary conduct the closing in practice, it is safer to have your own Costa Rica real estate attorney protecting your interests and reviewing all the certifications, deeds, and other necessary documents required for the transfer to take place.
In our opinion, it just does not make any sense to purchase any property directly under your name if instead you can, for asset protection purposes, transfer it to a Costa Rican limited liability corporation under your control. In this sense, take into consideration that currently the minimum processing time for a Costa Rican corporation is between 2-3 weeks, so if you know that it is just a matter of time and finding the right property for you to invest in Costa Rican real estate, please proceed to incorporate prior to signing any document. We normally have Costa Rican companies in stock so that our clients can purchase property directly under a Costa Rican shelf company; however, if you plan with time, you can avoid higher fees and start your own new Costa Rican entity which will give you many regulatory advantages following proper Costa Rican real estate law considerations.
Once the public transfer deed is properly signed by both parties, the acting Notary will submit the document for registration in the National Registry and, normally within a period of two weeks, will provide an official registered title to the new owner.
- Closing costs: real estate transfer tax, stamps, and legal fees.
- Special regimes exist for certain beach properties located in the Maritime Zone
- It is important for you and your lawyer to have a clear understanding of existing easements in selected properties.
- Develop a clear understanding of the entire Costa Rican real estate law process with your Costa Rican real estate attorney to avoid inconsistencies.
- Costa Rican Title Insurance is available through us from recognized US American Title companies.
Our firm has extensive experience and understanding of the existing risks in real estate investment, a combination of Costa Rica’s safe and respected registry with a professional Costa Rican real estate attorney will ensure your interests are protected.
Basic Checklist towards Purchasing Property in accordance with Costa Rican Real Estate Law
- Request the property number along with the survey map number.
- Have your Costa Rican real estate lawyer conduct a Costa Rican title search.
- Check the status of property taxes and municipal taxes.
- Arrange property inspection by a qualified engineer or specialist.
- Follow the instructions of your trusted Costa Rica Real Estate attorney.