Tuesday 22 June 2021

Purchasing Property in Costa Rica

Purchasing property in Costa Rica requires a higher level of due diligence in order to avoid the pitfalls that are presented. A Purchaser requires the assistance of both a skilled Realtor and Attorney/Notary, in order that the proper inquiry is made prior to any Purchase Agreement being entered into.

Photo courtesy First Realty CRE

As Realtors are not licensed, or regulated by the Government in Costa Rica, it is particularly important that a Purchaser do their due diligence of the Realtor that they choose. There are many good Realtors in Costa Rica, but it is important to choose both a competent Realtor and a Realtor who is knowledgeable in the area of Costa Rica where you intend to buy. No MLS system exists in Costa Rica and the knowledge of listings in a particular area are usually only those personally known to the Realtor that you choose.

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Although Attorneys and Notaries are licensed and regulated by their professional bodies, it is equally important to choose an Attorney/Notary who specializes in property purchases. Following the initial negotiations to establish the price and a closing date for the purchase transaction with the Seller, the Attorney/Notary acting for the Purchaser, will prepare the Purchase Agreement setting-out the terms of sale.

The Purchaser and Seller will sign this Agreement and the Purchaser will usually pay into escrow with their Attorney/Notary, a deposit of approximately ten percent of the purchase price, to be held subject to various specified contingencies being satisfied, following which the deposit would become firm and non-refundable to the Purchaser.

Photo courtesy First Realty CRE

When purchasing an existing house, or condominium which has been constructed and the property has a registered title in the National Registry, the Attorney/Notary will conduct a Title Search of the property in the National Registry to determine if there are any liens, or other annotations on the property, such as mortgages, which need to be cleared from the tile at closing. In addition, a review of the property Survey Plan will be made. If the Survey Plan exceeds ten years from the date of issue, it is advisable to have a Land Surveyor conduct a check of the property boundaries to determine if there are any irregularities such as encroachments.

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When purchasing raw land for building, it is particularly important that the Attorney/Notary conduct additional due diligence, such as obtaining a copy of a Land Use Permit (Uso de Suelo) from the applicable municipality to determine the use to which the land is zoned and to insure that appropriate access to the property may be made from a public road, or that an easement exists connecting the property to a public road. Depending on the type of development being considered, inquires may have to be made of the Government Environmental Agency (SETENA), the Government Housing.

Original article by Rick Philps (rphilps@plawcr.com)
Source: Solutions Costa Rica



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