Buying real estate abroad can be complicated as processes, ownership, title and possession rights can create varying levels of risk depending on the country. Costa Rica is a country that has a well establish and relatively easy system. Although Costa Rica is considered one of the best Latin American countries regarding foreign investment and ownership rights, there are things to look out for.
Ethics and Accountability
If you don't have the time or the know-how to properly investigate the market, including fair market prices and values and potential hazards like zoning laws, then it is best to deal with quality professionals.
Like all Central American countries, oversight is tenuous in Costa Rica. Although Costa Rica has made great progress in this regard, incompetency can still be a factor. Costa Rica has registry systems for certified real estate agents, but there are many "agents" with no official training or registration.
The best way to ensure that the details of the buying process is properly handled and done in a timely fashion, is by working with a national level real estate agency that works with a broad inventory and a specialized lawyer.
Legal systems can be difficult for many to navigate. Your lawyer will need to be sure that procedural details are meticulously attended to. Make sure your lawyer is a specialist in real estate and foreign buyers. Title, ownership options, zone laws, corporations and right of possession are key points to understand and address with your legal representation.
Your lawyer should make certain that all prior mortgages and liens are clear and the documentation of cleared judgments are in the file before any money is exchanged. You should request to see all service, utility and tax statements to confirm go-forward fixed costs and that those bills are up to date.
Costa Rica's Civil Code grants the right to possession to those people who have occupied and "improved upon" non-cultivated land; these people are known as "squatters." After buying property, "possession" rights must be protected from being contested by third parties or so-called "squatters."
If you are buying property, especially in rural areas and you will be an absent owner, you must study the legal conditions and rights of any workers found on the property, prior to any transfer of money. If there are any property keepers, they should be fully paid and compensated by the seller. You should not walk into any situation in which ownership or possession could be disputed by property keepers or former workers on the seller's payroll. If are going to be an absent owner you will need a dependable caretaker as an employee - with full benefits.
Real Estate Climate
Know the market before investing. This sounds like an obvious statement, but you would be surprised at the number of people, especially during the early boom days, that came to Costa Rica for the first time and bought immediately. In Costa Rica there is no MLS (multiple listing service), which is a centralized, national database of all real estate for sale. For this reason it is advisable to go with a large, reputable agency that has a diversified national portfolio of properties for sale.
Understanding the real estate climate is also important if you are buying income properties, or if the investment is for land-banking purposes and may not be as important if you are buying for lifestyle, planning to retire, or are purchasing a second home with no intent to resell.
It is important to do your research and due diligence -- work with a reputable, national real estate agency, hire an experienced legal firm that specializes in real estate and working foreign buyers and investors -- to own your own piece of paradise in Costa Rica.
Michael Klein works as a writer for three of the leading Costa Rican on-line English news publications, as well as Costa Rica Real Estate. He and his wife Dyan also own and operate San Ramon Properties, the #1 ranked website for their region.