Phases of a Real Estate Transaction In Costa Rica
April 16, 2021
Properties in Costa Rica
1.Identify the property you want to purchase through your real estate agent. Here the Properties of Costa Rica team, being the experts in the field, can surely and professionally assist you through all the process.
2.Coordinate with the selected escrow agent in order to have them on board in regards to the custody of funds that will be required for the upcoming transaction. Attorneys can assist in providing a qualified escrow agent duly licensed by SUGEF (the government entity which provides the licenses for companies that are involved in the financial and banking line of business).
3.Once the SPA is signed, then have your attorneys initiate the Due Diligence process during the term established in the SPA for said tasks to take place (a thorough review of the current standing of the property, which includes among others, a checking of the property taxes, HOA, etc).
4.We recommend constituting a corporation through which the investor will hold ownership of the property.
5.Once the earnest money deposit has been confirmed by the escrow agent, and the term established on the SPA has elapsed, then the public deed through which the title of the property is transferred can be signed by the parties with the assistance of a Notary Public.
6.At the same time, the final payment is coordinated to be canceled through the escrow agent.
7.Next, the public deed testimony is sent by the Notary Public to the Public Registry in order, to begin with, the inscription and registration process of the property transfer. This stage entails the payment of the property transfer tax, the National Registry legal stamps, duties, and registration expenses.
8.Finally, once the National Registry finishes the inscription and registration process of the property transfer (it may take between 2-4 weeks), the purchased estate will now appear at the National Registry under the name of the new owner. Therefore, based on the registration and publicity principles that support the Costa Rican real property rights, the new proprietor has now full ownership over the estate and the government protection that comes with said title.
It is important to confirm that the property can be purchased even if the client cannot attend closing physically. The way for that to happen is through an extra step in which the buyer would grant a power of attorney to a representative in Costa Rica that will be enabled to specifically sign the purchase public deed in name of the buyer’s corporation. This extra step is a service that an Attorney can and usually provide to a client, both by preparing and coordinating the power of attorney, plus by providing the representative that will execute the purchase in name of the client´s corporation.
In conclusion, these are the main stages that a real estate purchase transaction will be facing in Costa Rica. Of course, if there are further legal questions or instructions on your behalf, please feel free to let us know about them so we can help out clarifying. In the meantime, We wish for you to have a sensational experience through the phase of looking for the right property in which your dream to invest here in Costa Rica becomes true.
Article Provide by RE&B Attorneys
Jose Alejandro Martínez-Castro