BUYING PROPERTY IN COSTA RICA
Many people wonder what is involved when buying property in another country. In Costa Rica, foreigners have the same rights to buy and own property as native Costa Rican’s. Below is a breakdown of the legal process of buying property in Costa Rica. At TropicoLegal, we have a great deal of experience helping foreigners purchase property all over Costa Rica. We also specialize in doing a complete and very thorough due diligence to make sure there are no surprises, and you are buying a property that is safe, and free of legal issues. We know that peace of mind is worth a lot when making a large investment like property.
Below is a breakdown of the process so that prospective clients understand what to expect. If you have any questions, please contact us, we will be happy to help you.
PURCHASE & SALES PROCESS
THE FIRST STEP – STARTING THE PROCESS
The first step required in order to begin the purchase process is that a sales and purchase agreement is signed by the parties and delivered to the Escrow Agent with an Escrow deposit. At the same time, the Due Diligence Term is agreed to by the parties. Once the term is agreed to, a title search is performed.
THE SECOND STEP – DUE DILIGENCE
The second step is Due Diligence. The Closing law firm and other experts hired by the buyer performs their Due Diligence. Due Diligence is an in-depth process which includes many parts. The Main components of the Due Diligence components are listed below. For a complete list, you may download the complete process document PDF at the bottom of this page.
Title Search to Confirm:
- Escrow deposit and term.
- New corporation Registration.
- Closing cost estimate.
- Clean title.
- Property Survey.
- Home Insurance.
- Seller´s legal representation.
- Contents of any liens, easements and encumbrances.
- Legal access.
- Water rights and easements.
- History of the title.
- Luxury home tax.
If the Business is Active:
- CCSS and INS policy´s ad reports.
- Company Books.
- Shareholders agreement.
- Workers information.
- Tax research.
- Government entities research.
Resurvey of the Property to Confirm:
- Road Access.
- Land size.
- Environmental Zones and other restrictions.
- Maritime Zone location.
- Water source, line and inlet meter location and number.
- Electrical lines, transformers, posts located on site, inlet and meter number and location.
- Private entrance location.
- Easement location.
- Municipal parks or restricted areas.
- Common areas.
- Buildings location and exterior size.
- Environmental protection zones, such as rivers, spring and wells.
- Neighbor’s surveys recollection and review.
- History of the registered Survey.
Home Inspection to Confirm All Conditions of the House.
Local government and other entities research to confirm:
- Land taxes owed.
- Building Permits.
- Fees fines or penalties.
- Land Tax declaration. (Every Five Years).
- Green Zones existence or restrictions.
ENVIRONMENTAL research with Minae to confirm no active cases against the property.
Water Concession research with Minae to verify:
- Existence and term of the concession.
- Payments required.
- Other beneficiaries.
- Copy of concession file.
THE THIRD STEP – CLOSING
The third step is closing and it is a step which is completed at the end of the process in a meeting between the seller, buyer, lawyers and the Escrow company. The purpose of this meeting is to achieve the effective transfer of the property and delivery of the price. This includes but is not limited to:
Closing statements, and schedules the closing.
- Payments from Escrow:
- Mortgage holders.
- Transfer fees and notary fees.
- Land taxes.
- Payments from Escrow:
Transfer of Services.
Transfer of Concessions, if any.
Change of Companies Registration Information and Bylaws if Required.
THE FOURTH STEP – POST CLOSING
The post closing is in our opinion, one of the most important. It is celebrated entirely by the closing law firm, but it is also recommended that the buyer and sellers follow up 15 to 30 days after closing to make sure that the following have been completed:
• Transfer Registration
• Concession Transfer Registration
• Tax Payment
• Municipal Tax Declaration
• Document Delivery
• Yearly Payments
• Escrow Account Continuity
• Building Permits
• Earth Movement Permits
• Environmental Permits
• Residency Services
You can download the complete TropicoLegal-Purchase Sales Process here.