How is the buying process for the titled property?

Costa Rica properties guide. (Titled property and Registro Nacional. Public Registry)

Titled property is owned in fee simple as it is in the United States and other foreign countries. First of all, you should know that all Costa Rican citizens and foreigners have same rights under the law. What means fee simple? It's means that the owner of the property has the complete right to materially own the property. The only matter is if the owner bought the land as part of a government program or in case of Maritime Zone land and Concession Land. You need to follow some steps once you've made a decision to buy a property in Costa Rica:

A- Sing a “PROMESA RECIPROCAL DE COMPRA-VENTA”

The objective for signing a Reciprocal Promise to Buy and Sell with the seller is to avoid that nobody else buy the property while the process of due diligence on the title. A lawyer is present at the signing of this Agreement. This agreement will also delineate the agreed upon deposit amount (typically 10% but not always). At the signing of this agreement, the buyer will give to the seller the deposit which will be held in escrow until the closing date.

B – DUE DILLIGENCE

Agreement the property goes through the due diligence period or the “title search” as we are familiar with after the signing of the Option to Purchase.  All properties are registered with the Public Registry. The Registry can provide a Registry report that provides information on which the owner is the boundary lines of the property and liens or encumbrances that may be bestowed upon the property and any other recorded documents that affect the title of the property. The attorney will search the title back to the beginning of the property to make sure that the property title is clean and there is proper ownership by the seller.

The attorney will research the property in the Public Registry to make sure that the title is clean. Each property has a “Folio Real” (folio number) in which the properties can be searched in person or online to make sure that there are no “gravamenes” (liens or encumbrances) on the property. Title Insurance is not required to purchase property in Costa Rica. However, there are many reputable title companies such as Stewart Title and a few others that you may purchase title insurance if you wish to do so. Although title insurance is not necessary to purchase in Costa Rica, we always recommend that you do so.

Recommendation: Buyer must checks with the municipality to make sure that all property taxes have been paid and are up to date. It is good to have the title searched just before closing to make sure that no “gravamens” have been added since the first search.

C- CLOSING

If the title and property is free and clear of any liens or encumbrances, has been searched and correct ownership, confirmed then you are ready for the closing. At closing the Buyer and Seller will execute the “Escritura De Traspaso” (transfer deed) before a Notary Public which transfers ownership of the property from Buyer to Seller. In Costa Rica, in order to be a Notary Public, you must first be an attorney. It is much different than a Notary Public in the United States or other countries which have limited powers. Costa Rican Notaries are given powers to act on behalf of the state.

The registration process should take almost 45-60 days. Once registered, the Registry National will back the original deed with the approval signature because the Registrar approved the document and logged the authorization with their security code in the computer records and the property when searched in the National Registry will show up under your name or your corporate entity. Once the Escritoire De Traspaso has been executed, then it must be filed with the Registry National. The Notary Public who handles the closing is responsible for filing the Escritura with the Registry National