Researching Your Property
Once you’ve explored the local real estate market, from the cool mountains to the sunny coast, and have found that perfect building site, investment property, or even your dream home, you’re ready! The property suits your needs and is on the market at just the right price.
Before committing to purchase, you must hire an attorney experienced in real estate law. Ask your friends for recommendations, or search trustworthy sources for experienced real estate lawyers. Costa Rica's property laws may differ from those in your home country, so a local, knowledgeable lawyer will be indispensable during this process.
Whether you are purchasing land or a home, begin by making a close, personal inspection of the property. Note the lot boundaries, the location and condition of fences or property markers, home features, and general condition of fixtures, flooring and walls. If there is a pre-existing structure on the grounds, check closely for leaks in the ceiling and walls, and look for any water damage. Always survey the surrounding areas for potential building projects to avoid disruptive construction near your new home or property.
After you have reviewed the property, bring in a surveyor or home inspector to look things over. Ask for information about your neighbors and talk to them in person. Study the conditions and amenities of the property, such as topography, electricity, water drainage, telephone services and restrictions on land usage. If the home or lot is located in a gated residential community, inspect the condition of community features. If public utilities are not yet connected, speak with the respective companies. These services take time to connect, and may require additional expense.
If you are purchasing the property as a short-term investment, call in a third-party realtor experienced in investment properties. He or she will understand local market trends, and can discuss with you average return on investment, market conditions and other important information relevant to an investment purchase.
Next, visit the Public Registrar and run a title search on the property. To do this, you will need the title registration number (folio real). The title search will determine whether there exists a legal title to the lot, and whether any liens or encumbrances have been placed against the property. Please note that if problems arise that are not addressed, you could lose possession of the property.
In addition, a title search will help determine that the deed (escritura) and the cadastre (catastro) are in agreement regarding the property's dimensions and other features. The deed describes the property in words, and the cadastre is a map that outlines the property's physical features. Problems may arise because changing one document does not necessitate change in the other, so one may be dated and the other current. To determine the accuracy of the property map, always hire a licensed topographer to review the cadastre. Any discrepancy must be reconciled before continuing with your purchase.
At this stage, you may want to consider purchasing title insurance or hiring a title investigation firm to wade through the paperwork and provide legal support and local know-how. Title insurance protects the buyer, indemnifies him or her against any eventualities that could arise, and guarantees the financial investment.
Your lawyer will advise you on current zoning restrictions, which are constantly evolving. Each municipality has its own rules, and prospective buyers should pay attention to regulations regarding maritime, riverfront and other special property types.
You must take steps to ensure that the property is not located in a national park or on untitled beachfront without a municipal lease. Search for national park restrictions in the Ministry of Environment, Energy and Telecommunications and the National Park Service. Check the property records at the Roads and Transportation Department to determine that no new, planned roads will vivisect your future home.
If the property is located within 650 feet of the beachfront, check public records for a municipal lease. Without a lease from the local municipality, any existing or future structures may be illegally located. Additionally, check with the Forestry Department to make sure that you can use and modify the property without breaking any forestry laws. Certain plants and trees are under strict protection, and you will need special permits to prune or cut them down.
A good lawyer will welcome questions, answer each one thoroughly, and keep you advised of each step in the purchase process. Even with a responsible lawyer, you should remain vigilant and follow each detail closely. For closing, you must supply a copy of the property tax receipt (impuesto territorial) to prove that all taxes are current, that all liens, mortgages and encumbrances are paid, as well as a certificate from the municipality where the property is located and sufficient funds to pay taxes, notary fees and registration fees due on the property.
With preparation and perseverance, your dream will soon become a reality. A good lawyer and a trustworthy real estate agent are key, so search for recommended professionals that you can trust.