Key aspects of a real estate transaction in Costa Rica

Key aspects of a real estate transaction in Costa Rica

We are pleased to know that you are interested in investing a real estate property in our country; we are confident that your experience in this high-value market will be pleasant.

We believe it is important to give you a brief overview of the Costa Rican legal frameworks related to the transaction you’re planning. Our regulations mandate several preparatory and subsequent steps to successfully conclude a property purchase, which we proceed to describe:

1. Choose a property: Both online and in the market, there are various real estate agents who can guide you through this process. Typically, their commission is paid by the seller, so this service will not incur any additional costs for you.
2. Subscribe a purchase option. Is not unusual than a letter of intention precedes this document, usually, given by the Realtor in charge of the deal. Anyhow, the option to purchase typically serves as the starting signal to fully engage in the business.
3. Coordinate escrow account opening. Hiring an escrow agent to ensure the earnest money deposit and the final payment to the seller are fundamental parts of this business. Our regulations involve some bureaucratic steps to validate the origin of the funds, which you might not be accustomed to. Therefore, having an intermediary between you and the escrow agent is advisable.
4. Legal due diligence studies: Our regulations include a Real Estate Registry where (almost) all properties are registered, along with their histories and encumbrances. However, there are various public and private institutions from which very relevant information must be obtained to ensure the condition of the property you wish to purchase (such as utilities, tax status, HOA fees, etc.) Consequently, the confirmation of information should be carried out by a professional with extensive legal experience.
5.  Transfer deed: As soon as the due diligence confirms that the property to be purchased is suitable for your interests, you should proceed with the closing, which must be conducted before a Costa Rican public notary to ensure that the purchase is registered in the Real Estate Registry. This act will involve the payment of various taxes; you should ask for a confirmation that the tittle of the property is updated; this procedure takes about 1 to 2 weeks getting done.
6. Further steps: As soon as the property is registered on your behalf in the Real Estate Registry, you shall update its information before the utility’s providers, the local government and perhaps, other institutions; we recommend that you negotiate with your legal advisor to include these tasks as part of the closing process.

Other important matters:

Using a company as the property’s holder: Many foreign investors prefer to have the property they purchase owned by a Costa Rican company, particularly for the ease it provides in being represented in various normal situations in our country, especially if they will not be spending most of their time in the country. The process of incorporating the company is straightforward and typically takes between 1 to 3 days.

Bank account: Whether under the name of the holding company or your personal name, opening a bank account in the country facilitates and reduces costs related to property maintenance. Banking requirements are somewhat strict, both legally and financially, and will depend on the bank you choose. It is important to have local guidance to assist you in successfully navigating this process.

Relocation: There are several ways to obtain a residence or another legal status in our country, if you are interested in these services, please check our specific article.

We will be please to advise you in the deal you’re planning; we will diligently safeguard your interests and ensure optimal experience in these dealings. Feel free to contact us at realestate@ghp.cr, via WhatsApp at +506 8585 4141, or visit our Playa Tamarindo office in Centro Comercial Plaza Conchal, office 18b.