If you are interested in buying real estate in Costa Rica, apart from location and price, “the” most important issue for you to know and be aware of is Costa Rica real estate law.
First of all, you have to be clear of the fact that United States, and most of Canada inherited the Common Law system from the British, while Costa Rica, and the rest of the countries of Latin America inherited the Civil Law system.
What is the main difference between both? There are many, but the main difference is:
- Common Law is based on court precedents and
- Civil Law is based on written compilations of laws, the codes and laws.
Can anybody say if one is better than the other? In my opinion, Civil Law is a more logical and structured system, however, it does lack the flexibility that Common Law can have.
Also litigation in Civil Law is more structured, less theatrical than in Common Law, which is good in that it never allows a Jury to decide a case, in Civil Law cases are always ruled by one or more professional judges.
Regarding Real Estate, there are also some important differences, two that are relevant here. First in the Registration System in Costa Rica there is one centralized Registration Office, the “Registro Público”, where all Real Estate is recorded and tracked. The database of such system, by the way is available on-line here.
Second the Notaries. In Common Law, a notary is any neighbor that asks for a seal and his commission is approved. In Civil Law, the labor of a Notary Public is regarded as a profession, so much, that in order to become a Notary, one has first to be a lawyer, and some of the courses in University are on the particular field of Notarial Law.
There are countries, like most of continental Europe, and much of South America where the Notary is selected by the State in fiercely competitive exams, to exclusively hold office for a period of time, in a certain jurisdiction.
In Costa Rica the system is open, since any lawyer with post degree studies in Notarial Law, can freely be a Notary Public acting, like a liberal professional on such field.
In this way, almost all lawyers in Costa Rica you will find, are also Notary Publics, and they practice both, as an attorney and as a notary in their own private office without any separation.
Nonetheless, there is a clear distinction in their labor, their responsibility and in their fees, when they perform as one or the other, but most of their clients, mainly foreigners, do not have that distinction clear.
Notaries must work and record their deeds on their protocol book, or “Protocolo” in Spanish. They are responsible for being impartial when performing their labor, since they are only performing a delegated function, which indeed should be provided by the State, and for that reason also, notary fees are set and fixed by law.
Nevertheless, since notaries are lawyers and are hired by a client, it is always advisable to use your attorney as your notary public for transactions in which you are buying land.
There is a fixed amount of fees any notary is obliged to charge for his services, without being able to charge more, or less. Each act or type of labor has a fixed fee as in Real Estate purchases, estimated as a percentage of the transaction value.
Notaries are also under very, very, strict supervision of his labor, on part of the DGN, or National Directorate of Notaries, an office of the Supreme Court.
While on the other hand, lawyers must not be impartial, but represent the interests of their clients, are not under so much supervision, and their fees can be set more freely between attorney and client.
You can read Costa Rica Real Estate Law – Part 2 here.
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