Don’t Get Scammed When Buying Costa Rica Real Estate
Costa Rica is one of the most beautiful tropical countries in Central America. It has some spectacular land buying opportunities for Costa Rica real estate investors. But buying land or property in this tropical paradise does come with it's share of risk. The unfortunate fact is that the risk is pretty great if you fail to do your homework.
The Harsh Reality
There have been complaints from foreigners that have purchased property in Costa Rica and have subsequently ran into title problems or have even lost their home due to fraud or being sold homes where sellers provided false documents, misleading information, etc.
Some home buyers have lost their homes in regions or areas where Costa Rica laws and government regulations fail to protect the interests of home buyers or where local laws are in direct conflict with national legislation. Perhaps they bought a home which was allowed by a local regional government entity but was in direct conflict with national law and was therefore unlawfully built.
A great deal of people have lost their properties to so called Squatters.
Squatters are basically people or groups of people that simply invade your property and start living there without permission. The crazy thing is that Costa Rica law favors squatters, especially if they invade property which could be considered agricultural.
The laws may determine that if someone invaded your piece of land and uses it for agricultural purposes they can apply to take YOUR title away and make the land legally theirs. Costa Rican courts have historically leaned toward favoring squatters over wealthy investors.
These expropriation events are more frequent in Costa Rica's Zona Marítimo Terrestre areas which is a popular real estate investment haven.
There is a Bright-side
The Costa Rica coastline is synonymous of paradise on earth. It is a country with very attractive real estate opportunities, especially for international retirees, ex-pats and foreign property investors. Home and land value has a long history of showing steady appreciation and growth.
Even with the global recession, Costa Rican home prices are expected to behave pretty well. There may be ups and downs in the real estate scenario but long term investors and experts affirm that Costa Rica real estate is a safe and profitable investment for long term buyers.
5 Tips to Help Mitigate the Risks Involved With Costa Rica Real Estate Investments:
So, if you are one of the many people who have fallen in love with the country and want to own your own piece of paradise on earth, these tips can definitely minimize the risks associated with buying land and property within this nation.
1. An exhaustive title search is a must and should only be done at the Central Depository or Registro Publico as it is known in Costa Rica.
2. Make sure these two very important documents, namely the deed (escritura) and the land registry (catastro) are completely the same. Discrepancies in these documents may well make you a "lose your home candidate" so make sure any differences between these documents are taken care of and fixed way BEFORE you write the check.
The reasoning is that simply because you have a legal document to support your ownership rights it doesn't mean another legal document cannot take those ownership rights away. So watch your behind and get this right.
3. Determine if squatters are present on your property. If they are, stay clear of this land deal. It doesn't matter how cheap or spectacular the deal sounds. Remember the rule that says "If it seems too good to be true then it probably isn't."
Reminder: There are people that will greatly lower their asking price and try to sell you their property fast when they find out squatters have invaded their land. They will offer you irresistible prices, terms and conditions to get you to buy quickly. However, buying land that has been invaded by squatters will likely turn out to be a nightmare for you.
4. Make sure no conservation or "green" laws are in direct conflict with property ownership in the area you wish to buy. This is especially true if you are looking for property in the Zona Maritimo Terrestre. Local or municipal law may permit the sale of property but national or country wide law may forbid it. So make sure your piece of paradise on earth allows for private ownership at both the local and national levels.
And even if no conflict of laws exists now it doesn't mean some new law in the future wont restrict your use of the land or take it away. So staying in tune with the latest legislation is a must.
5. Research, research, research! Do your homework before making any payments. Study real estate rules and regulations and also find out whether the property owes anything in terms of taxes, mortgages, liens, old unpaid utility bills, etc.
Final Words of Advice
Following the tips above can save you many headaches and mitigate much of the risk involved in buying Costa Rica property. It won't however, shield you 100 percent. Remember, Costa Rica is a developing nation with it's own laws and regulations. That may sometimes be in direct conflict with your status as a foreign land owner.
On the other hand, the beauty and the peace that comes with an investment of this sort makes it well worth it for most of us. You just have to be aware that dangers do exist. Hiring a good attorney will save you potential headaches.
This Article was originally published on VivaRealCostaRica.com Photo used on this entry taken from flickr, provided by user stitch
The Harsh Reality
There have been complaints from foreigners that have purchased property in Costa Rica and have subsequently ran into title problems or have even lost their home due to fraud or being sold homes where sellers provided false documents, misleading information, etc.
Some home buyers have lost their homes in regions or areas where Costa Rica laws and government regulations fail to protect the interests of home buyers or where local laws are in direct conflict with national legislation. Perhaps they bought a home which was allowed by a local regional government entity but was in direct conflict with national law and was therefore unlawfully built.
A great deal of people have lost their properties to so called Squatters.
Squatters are basically people or groups of people that simply invade your property and start living there without permission. The crazy thing is that Costa Rica law favors squatters, especially if they invade property which could be considered agricultural.The laws may determine that if someone invaded your piece of land and uses it for agricultural purposes they can apply to take YOUR title away and make the land legally theirs. Costa Rican courts have historically leaned toward favoring squatters over wealthy investors.
These expropriation events are more frequent in Costa Rica's Zona Marítimo Terrestre areas which is a popular real estate investment haven.
There is a Bright-side
The Costa Rica coastline is synonymous of paradise on earth. It is a country with very attractive real estate opportunities, especially for international retirees, ex-pats and foreign property investors. Home and land value has a long history of showing steady appreciation and growth.
Even with the global recession, Costa Rican home prices are expected to behave pretty well. There may be ups and downs in the real estate scenario but long term investors and experts affirm that Costa Rica real estate is a safe and profitable investment for long term buyers.
5 Tips to Help Mitigate the Risks Involved With Costa Rica Real Estate Investments:
So, if you are one of the many people who have fallen in love with the country and want to own your own piece of paradise on earth, these tips can definitely minimize the risks associated with buying land and property within this nation.
1. An exhaustive title search is a must and should only be done at the Central Depository or Registro Publico as it is known in Costa Rica.
2. Make sure these two very important documents, namely the deed (escritura) and the land registry (catastro) are completely the same. Discrepancies in these documents may well make you a "lose your home candidate" so make sure any differences between these documents are taken care of and fixed way BEFORE you write the check.
The reasoning is that simply because you have a legal document to support your ownership rights it doesn't mean another legal document cannot take those ownership rights away. So watch your behind and get this right.
3. Determine if squatters are present on your property. If they are, stay clear of this land deal. It doesn't matter how cheap or spectacular the deal sounds. Remember the rule that says "If it seems too good to be true then it probably isn't."
Reminder: There are people that will greatly lower their asking price and try to sell you their property fast when they find out squatters have invaded their land. They will offer you irresistible prices, terms and conditions to get you to buy quickly. However, buying land that has been invaded by squatters will likely turn out to be a nightmare for you.
4. Make sure no conservation or "green" laws are in direct conflict with property ownership in the area you wish to buy. This is especially true if you are looking for property in the Zona Maritimo Terrestre. Local or municipal law may permit the sale of property but national or country wide law may forbid it. So make sure your piece of paradise on earth allows for private ownership at both the local and national levels.
And even if no conflict of laws exists now it doesn't mean some new law in the future wont restrict your use of the land or take it away. So staying in tune with the latest legislation is a must.
5. Research, research, research! Do your homework before making any payments. Study real estate rules and regulations and also find out whether the property owes anything in terms of taxes, mortgages, liens, old unpaid utility bills, etc.
Final Words of Advice
Following the tips above can save you many headaches and mitigate much of the risk involved in buying Costa Rica property. It won't however, shield you 100 percent. Remember, Costa Rica is a developing nation with it's own laws and regulations. That may sometimes be in direct conflict with your status as a foreign land owner.
On the other hand, the beauty and the peace that comes with an investment of this sort makes it well worth it for most of us. You just have to be aware that dangers do exist. Hiring a good attorney will save you potential headaches.
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