Real Estate Purchase and Sale in Costa Rica
Buying property in Costa Rica is not the same transaction it is in the United States or Canada. There is no title insurance industry in the American sense, no closing agent standing between the parties, and the person who transfers the property is not a lawyer in the common-law sense but a notary public — a public officer who gives faith and executes the deed.
We represent the buyer, and only the buyer, from offer to registration.
What the process involves
A purchase properly handled runs through defined stages: verification of title and encumbrances at the National Registry, review of the cadastral survey against the physical reality of the lot, confirmation that the seller has capacity to transfer, drafting of the purchase agreement with the conditions that actually protect the buyer, placement of funds with a registered escrow agent, execution of the transfer deed before a notary, and registration.
Each of those stages has a way of going wrong that is specific to Costa Rica. A survey that does not match the fence line. An easement nobody mentioned. A seller who is one of four heirs. A corporation whose books were never properly kept.
Who we work with
Most of our clients are buyers from the United States and Canada acquiring residential or investment property on the Pacific coast — Tamarindo, Flamingo, Nosara, Santa Teresa — and in the Central Valley. Many have visited the country a handful of times and are about to wire a substantial sum to a jurisdiction they do not know.
Our job is to make sure that when the money moves, the title moves with it.
The stages, in order
- Offer or letter of intent. Usually prepared by the broker. It fixes the price, the deposit and the due diligence period, so it should be reviewed before it is signed, not after.
- Due diligence. Title, survey, water, zoning, municipal and tax standing, condominium documents and, where a company holds the property, its books. See legal due diligence.
- Purchase agreement. The binding contract. It sets the conditions under which you may withdraw and recover your deposit, the seller’s representations, the closing date and the consequences of default.
- Escrow and compliance. Funds are wired to an escrow agent registered with the Costa Rican financial regulator. Expect to document your identity and the origin of the funds; we prepare that file with you early so it does not hold up closing.
- Closing. The transfer deed is executed before a Costa Rican notary public. If you are abroad, you sign through a special power of attorney.
- Registration and handover. The deed is filed at the National Registry. After registration we update municipal records, property tax declarations, utilities and, when a company is involved, its corporate filings.
Frequently asked questions
Is there title insurance in Costa Rica?
Title insurance is not part of the ordinary Costa Rican closing the way it is in the United States. Where an international underwriter offers a policy for your transaction, you may choose to take one, but it does not replace due diligence: a policy compensates for certain defects, it does not tell you whether the lot has water or whether you can build on it.
Can I close without travelling to Costa Rica?
Yes. A special power of attorney, granted with the formalities Costa Rican law requires for a property transfer, allows a person you trust to sign on your behalf. We draft it and guide you through signing it where you live. See notarial services.
Who pays the closing costs?
That is set by the purchase agreement. Closing costs are made up of the transfer tax, registry stamps and notary fees fixed by an official tariff, plus escrow fees. We give you a written estimate for your transaction before you commit.
Should I buy in my own name or through a company?
It depends on how you will use the property, who will inherit it and where you pay tax. We cover the options under corporate structuring and recommend one only after we know the facts.
How is my deposit protected?
By two things: an escrow agent that is independent from the seller and the broker, and an agreement that states precisely when the deposit is refundable. The second matters as much as the first.
Munduss Legal — José David Garro Castro, Attorney at Law and Notary Public. Office in Tamarindo, Guanacaste. Request a consultation.
