Costa Rica Real Estate – This is part of our series on buying real estate in Costa Rica. We hope to provide information needed to make an informed decision about purchasing land, condos, houses or commercial property in Costa Rica. If you want more information about this property or buying real estate in general you can request the free e-book, “Secrets of Buying Real Estate in Costa Rica”
Purchasing real estate property in a foreign country is not a joking matter as it involves a lot of hard-earned money which you have saved for the most part of your professional life so you should proceed with caution and utmost care.
In Costa Rica, purchasing real estate is easy, transparent and the process is very similar to that of your home country. If the steps provided by the Costa Rican government are followed to the letter, then your investment will be a guaranteed success. However, if the transaction is not executed properly and legally, then loss will occur.
To avoid potential loss and ensure the security of your investment in Costa Rica you need the help of a reputable and experienced notary, make use of an escrow account and purchase a title guaranty. Let us discuss each requirement in detail.
- Public Notary – under Costa Rican law, all transactions involving the buy and sell of real estate property in Costa Rica must be executed before a Notary Public who is licensed to perform legal acts with public faith. The Notary is also responsible for providing legal advice and representation to the buyer all throughout the process to protect the buyer’s interest. Other responsibilities of the Public Notary are pay the applicable transfer taxes, record the property transfer deed and deliver the transfer deed to the buyer once the transfer has been completed and recorded in the Public Registry.
- Escrow – when buying a property in Costa Rica you must always use an escrow account – no exceptions! An escrow service is a third party bank account or agent that holds and manages the fund, sees that all agreed upon terms are followed to the letter to prevent mishandling or manipulation of funds prior to closing and does all administrative work required to execute a closing. It is critical that all monies are safely transferred from the buyer to the seller as scams and schemes are usually perpetrated during the payment phase. It is imperative that you secure a proper representation and escrow service to make sure that all funds are distributed to all parties involved, (buyer, seller, attorneys and brokers) in a timely manner. Escrow services are available through recognized companies like Stewart Titled Latin America, but no matter which company you go to make sure that the escrow account you will use is registered with Costa Rica’s financial system regulator SUGEF (Superintendencia General de Entidades Financieras).
- Title Guaranty – getting title insurance for the real estate property you have purchased is not really mandated by Costa Rican law, however, it gives you ample protection against defects in the title, liens or other matters of public records that may affect the ownership of the property. It can and will protect you against financial losses that may be brought on by hidden ownership claims, provide payment for legal expenses in the event there is a need for the title guaranty provider to defend the property against claim in any local courts and give you the peace of mind that you will not incur unwanted or unexpected debts from your newly acquired property. It will give you security, not backed by just a promise but by a company with financial stability, that you have a clear title to your investment and that you are protected in the event of defect.
The process of issuing a title guaranty entails the issuance of a title commitment that permits the buyer t review the legal status of the property and give them a tool to examine and evaluate if the property is in proper condition for purchase. The final title guaranty is issued after the closing and it is based in the title commitment. Once a title guaranty is acquired, it will remain in place as long as you own the property.
Types Is the Property Really for Sale?
What is the Maritime Zone?
Myths About Squatters
Construction, Architects & Engineers
Purchasing Under a Corporation
And so much more……..