Thursday, April 26, 2012

Some Legal Issues regarding Living or Investing in Costa Rica

Costa Rica Real Estate
Costa Rica is one of the most beautiful, socialized and welfare country of Central America. It is situated just south of Nicaragua and north of Panama. Costa Rica possesses some of the beautiful beaches, wildlife, waterfalls, rain forests and numerous thundering rivers, and excellent lakes for windsurfing and boating. There are some legal consideration for living and investing in Costa Rica. People who want to invest or live in Costa Rica must understand these terms and regulations.

For registration of Costa Rica real estate transactions, mortgages, vehicles and corporations it has centralized registration system called National Registry (“Registro Nacional”). This registration system is very advanced and the Registry records not only documents (like other Registries all along other countries), but it also registries rights inherent of those documents. Most properties in Costa Rica are registered in a computer system and each property has an identification number called: "Folio Real". For different reasons there are some properties that are not registered meaning they don´t have a Folio Real number and therefore cannot be tracked properly in the Registry.
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Before purchasing or buying any property in Costa Rica real estate it is advisable to perform a detailed study before the Public Registry. It includes checking Folio Real and also study of the transfer chain since the property was originally registered. Pending registrations are also present due to incomplete documentation, lack of payment of taxes etc. When you buy a business it is important to perform a more detailed study including: lease contracts, employment contracts, sales, income and property taxes paid to date, permits in place such as: Municipal permits, liquor licenses, Ministry of Health authorization, Insurance, Social Security, among others. Of course the advice of a lawyer and accountant are preferable in any case.

Property transfer in Costa Rica real estate require for buyer and seller to sign a deed before a Costa Rican Notary Public (whose concept is different than the one in many other countries such as the United States or Canada and is required to formalize all transactions dealing with real estate) and for such deed to be recorded at the Public Registry. Each property must have a registered map or survey to be locating the property in the field with exact measurement, actual boundaries, and description of buildings or structures. No property transfers can be made if the land does not have a registered map, and such map must be quoted in the transfer deed. If such map does not exist, it must be made by a specialized registered surveyor and then the transaction can be effectively achieved.
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These are the some legal conditions and rules regarding investing or living in Costa Rica. But these are not the final words. I recommend asking for an advice of a specialized professional in the legal area about Costa Rica real estate. 

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