The #1 mistake Americans make when buying property in Costa Rica

by | Oct 19, 2022 | Business Division, GLC Abogados

Costa Rica is one of the best real estate investment destinations in Latin America. As it is well known, the country is a solid democracy and also a respected State of Law where you can rest assured that your assets are properly registered in a reputable centralized digital registry system.

Having said that, its legal & business environment is different from that of North America, originated in Spanish Law and with other influences, it is necessary for a foreign investor to obtain advice from a qualified Costa Rica real estate attorney who understands such differences. At GLC, we have more than 20 years of experience protecting the interests of foreign clients that have successfully invested in our country. With the expert guidance of our Partner Manuel Porras and our Senior Associate attorney Diego Elizondo, our clients benefit from their experience and understanding of the challenges of international investing.

So, what is the #1 mistake Americans and other nationalities make when buying property in Costa Rica?

It is very simple yet extremely important. You see when a Costa Rican citizen is buying a property, he or she will do it with the advice and protection of his lawyer of trust, never with the attorney referred by the real estate broker! Why? For us, it is logical, we want an independent attorney in our corner to make sure that our investment is going to be protected properly. On the other hand, it is a common practice for North Americans to work with the attorney referred to him by the real estate agent/broker and/or developer.

Working with the attorney referred to you by the person or company interested in selling the property could create a conflict of interest, Costa Rican property transfers are handled entirely by Costa Rican attorneys acting as Notaries. Notaries are supposed to be impartial, but it’s logical that if the attorney/law firm has an ongoing commercial relationship with the Seller, it might not be in his best interest to be meticulous and thorough in the necessary Due Diligence prior to the Closing.

Before buying properties in Costa Rica, it is necessary for the specialized real estate attorney to conduct a serious Due Diligence in order to carefully study the title and investigate possible: liens, restrictions, encumbrances, and many other legal aspects that have to be addressed.

GLC is an independent full service business law firm with Real Estate as one of our core practices, we provide independent professional closing services for real estate purchases in every corner of Costa Rica.

 

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