Costa Rica Real Estate Law (Part II)
In a previous commentary, I explained how Real Estate law works in Costa Rica, stressing mainly the role of the attorneys on the buying and selling processes.
Most attorneys in Costa Rica are also Notary Publics. However, since the enactment of the “Código Notarial“, as of 2003, the license to be Notary Public is not automatic for new attorneys. If they want to be such, they have to obtain a Master’s Degree in the field of Notarial Law to apply for the job.
Foreigners must be aware also that even though all Notary Publics must be attorneys, their professional activities are regulated by different governmental bodies: The Bar Association for attorneys and the DNN for Notaries.
Why Is This Important?
If a prospective client wants information about the standing of any given professional, inquiries would have to be directed towards each institution, depending on the work he/she is going to perform for the client.
Let’s say the client is interested in a litigation process, that work would be handled by attorneys. If the client needs to set up a corporation and buy Costa Rica real estate, that work is done by the attorney but acting as a Notary Public.
- If a professional misbehaves as an attorney the Bar Association will be the one called to disbar him.
- If he misbehaves as a Notary, the DNN will be called to impose sanctions and retire his license.
As we are here dealing with real estate let us focus on Notary Publics:
The main instrument given to the Notary to perform his duty is the Protocol Book.
That is a book consisting of 200 protocol paper sheets, normally loose bindable sheets that can be run through computer printers. Still there exists the possibility of using bind sheets that have to be handwritten, as in the old times.
The protocol paper is a heavy 8 by 14 inches sheet, with a crest on the upper margin that reads “Protocolo”, sequential number, and a frame with 30 lines, inside where printing should occur, and never outside of such margins.
Due to the antiquated system the government uses to print on such paper, every time a Notary gets a new volume of 200 pages, margins change, and adjustments must be painstakingly made to the printing software.
The Protocol Book is of the utmost importance, since it is there where all deeds are recorded and signatures are stamped.
Originals are never given to the client or anybody else. Once the 200 pages are filled, it should be promptly returned to the National Archives for perpetual keeping.
Every time a Notary is given a new volume, it should be run first by the DNN, where an opening statement is written on the first page. Both the DNN Director and the Notary must sign such statement.
Then the Notary can use the Protocol.
The format of each deed is clearly established and must be strictly followed by the Notary.
Every deed should begin with the pertinent sequential number, parties should be clearly identified, and if they appear representing a corporation or somebody else, the Notary should make reference and assert the truthfulness of the data where such representation is based upon, then the business itself should be stated, then a closing for the deed should be placed at the end, where it should be stated that the parties understood the document, and that all of them sign, at the hour minute and date that corresponds.
It is very important to state, that for foreigners that do not speak Spanish, a translation to the language they speak, should be provided and the fact that such translation was done, either verbally or written must be noted before closing the deed.
Sometimes it is not recorded, for the reason that it might be, that is a mistake, which can produce the annulment of the deed (sale, corporation etc).
If the document should be registered on public records, then the Notary is under the obligation to issue a true copy of the deed, called in Spanish “Testimonio”. This is the document that at the end of the process should be given to the client.
The Testimonio is an exact copy of the original deed that is recorded in the Protocol. That original is called “matriz”.
The testimonio does not need to have original signatures of the parties, only of the Notary Public, who upon issuing it, must state that signatures appear on the Protocol, and close the statement writing the number of the deed, and the number of the volume of the Protocol where it appears.
I have an ongoing case in the California Probation courts, where a very illustrious US Judge refuses to accept the last will and testament of a US citizen, made in Costa Rica, with all formalities, because he can not see the original signatures of the now deceased party or the witnesses. He has not changed his mind, not even after certified copies from National Archives of the matriz with all original signatures, was sent to his court.
The notary is under the obligation of filing with the DNN an index of deeds, every fifteen days. Such index indicates the Protocol volume in use, beginning and ending page of each deed, as well as number, hour, date, parties and kind of deal. Lack of filing index is reason for suspending a Notary.
Regarding the obligation of the notary to record the deeds, it is important to say that failure to do so in an expeditious manner can be the ground for a suspension of the Notary, for a period that can be of few months to several years.
The only excuse for a Notary not to record a deed on public records is if the client has not paid in full his fees, the taxes and the expenses.
That is the reason why every client must ask the Notary Public to issue a detailed receipt of all moneys given to him related to a real estate deed.
So, knowing a little bit more of what the Protocol is and how it works in Costa Rica, should give foreigners some leverage to be treated properly.
By the way, let us say that one of the first and foremost reason for suspecting of a Notary Public is if he, without any valid explanation, does not use his own protocol book. It can mean he is suspended and using somebody else Protocol to keep on working.
You can read Costa Rica Real Estate Law – Part 1 here.
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