Many people come to Costa Rica for a week long travel adventure and end up falling in love with this lush, tropical paradise. Really, who could blame them?

Offering beautiful mountain vistas, long stretches of sandy beaches, exotic flora and fauna, and a mild climate, what’s not to like about Costa Rica? However, before you take the next step to make a purchase in paradise, there are a few things you need to know to help avoid costly pitfalls.

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Purchasing real estate in Costa Rica is very similar to buying real estate back in the United States, or any other part of the world for that matter.

However, doing your due diligence and being knowledgeable about how the system works can save you a lot of time, money, and heartache. Time that can be better used exploring this beautiful country and learning first hand about what the locals refer to as ‘pura vida‘ (aka ‘pure life’).

What is considered “real property” in Costa Rica?

For those of us from the United States, real property includes the land, any improvements thereon, as well as what is above and below the land, such as water, oil, gas, air rights, etc. However, in Costa Rica, that is not the case. All of those ‘extras’ like water, gas, and oil are reserved by the government for the people and require ‘permission’ in the form of a concession for their use and exploitation.

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Does title insurance exist in Costa Rica?

Title insurance is all but nonexistent in Costa Rica. There are a few properties that qualify for title insurance, but those are rare cases. In Costa Rica, your attorney is not only your closing and escrow agent, but your ‘title insurance’ as well.

Knowing how titles transfer and how the National Registry works is imperative. Hiring a well respected and reputable attorney goes without question.

How does the National Registry (Registro Nacional) work?

Understanding how the National Registry works is vital for both the buyer and the professionals involved in the transaction. Just like back home, there are checks and balances in place that are in the public record in Costa Rica. Everyone has access to the National Registry via their website at: Registro Nacional

First of and foremost, all properties in Costa Rica are referred to as farms (‘fincas‘), regardless of size. In addition, all properties in Costa Rica have a folio number (‘folio real‘) that is a long number divided into three parts; for example: A-BBBBBB-CCC.

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The first part is for the province that the property is located in (San Jose = 1, Alajuela = 2, Cartago = 3, Heredia = 4, Guanacaste = 5, Puntarenas = 6, and Limon = 7.) The second part is a series of numbers set by the public registry. The last part is the amount of ‘owners’ of the property.

If there is just one owner, then the numbers will be 000. If there are 8 owners, then the numbers will be from 001 to 008, with each number corresponding to an owner. This is important to know because if you are buying a property with multiple owners, they all must agree to sell and, if not, there is no sale.

There are two more terms that are important to be aware of. Duplicate (‘duplicado‘) is used for corrections in a case where two properties may have been given the same ID number. ‘Horizontal’ is the term used for properties that are condominiums.

What information can be found on a property in the National Registry?

With just a few documents you can glean a plethora of useful information that will help you make an informed decision about the property you are going to purchase:

  • The property certification is a summary about the property such as ownership, size, liens, restrictions, mortgages, etc.
  • The history report indicates all activity that has been recorded on the property at the national level.
  • The survey shows the size of the property. This should match the size recorded on the property certification as well as the plot map.
  • The survey report shows any subdivisions, past or present, that effect the property.

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Last, but not least, annotations and liens (anotaciones y gravamenes) are important terms that are sometimes confusing, especially the use of the term lien. In Costa Rica, the term lien can either be positive, such as to record an easement, or negative, to record such things as debt. Annotations can also be tricky but are often used to note pending legal action against the owners.

If the property you are considering is owned by a corporation (S.A.) or LLC, then you need to have a certification of ownership (certification de personaria juridica). This document gives vital information about the company as well as showing who has legal power of attorney to sell the property. Keep in mind, the person with power of attorney to represent the company may not be one of the owners of the stock in the company.

To avoid fraud, knowing that the share holders want to sell is a vital piece of information. If you are going to purchase the company along with the property, you want to know that the company is clean and clear of all debts and encumbrances. When you buy a S.A. or LLC, you are taking responsibility for the good and the bad that is attached to the company.

In conclusion, you can see that taking a little time to do your due diligence before purchasing a piece of paradise is imperative to having a positive buying experience.

By meeting and working with knowledgeable professionals and using the tools available to you, you can make an informed decision about how to proceed with your new purchase and begin to enjoy your new life in Costa Rica. This is the best way to truly experience what the locals refer to as ‘pura vida‘!

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Understanding How The National Registry Works Is Crucial When Buying Costa Rica Real Estate.

Article/Property ID Number 4694

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