I belong to a really “exclusive club” of two, or three Attorneys in Costa Rica, that have a similar legal and academic practice history.
During my fourteen years of practice in Costa Rica, I’ve found several real estate cycles finished. Metal Buildings Homes are very hot in Central America. Right now, although there’s been a steady progress in the U.S. Market from the 2008 decline, the effects of this development have yet to be felt in any substantial trend in Costa Rica. The real estate market in Costa Rica is now “ unusual” that is slow in regards to property deal, making it a “Buyers’ Market” cost-wise.
Choosing this “lag-time” variable into account and the upcoming U.S. Election in November, my prediction is that the Costa Rica real estate marketplace is “on the cusp” of transforming into a “Sellers’ Market,” beginning late this year and continuing into 2017. So, property costs will increase consistent with the “Sellers’ Market” states arriving. To put it differently, if Hillary Clinton wins, it’s going to be Republicans and needless to say, if it’s Donald Trump, it’ll be the Democrats.
I’ve found this occur formerly following U.S. Elections, but with the significantly more emotionally energized Election and the large sections politically which exist in the U.S., I anticipate this routine to be amplified this time around. Having set the scene for a possible Costa Rica property purchase, what should a property purchaser be looking for and what fundamental due diligence should be followed, to prevent pitfalls? In my opinion, just documented title properties in the National Registry, should be considered for buying. The Costa Rica Government ensures the state of the property title as enrolled in the National Registry, except in the instance of-of fraud. A Costa Rica Notary must prepare the Property Transfer Deed.
In Costa Rica, it’s not impossible to hold property by way of a “Right of Possession”. In that scenario, a Private Title may be prepared by a Costa Rica Notary to a third party purchaser of those rights, without enrollment in the National Registry, the possession rights of a present property possession holder. Sadly, the Right of Possession obtained by the purchaser, in that scenario, is just as great as no other party with a better Right of Possession to the property exists.
Also, Concession Sea Pines Real Estate found in the Maritime Zone (Beachfront), also present their set of issues. Concession rights to beachfront properties, all possessed by the Costa Rica Government, are given on a “lease-basis” to a private, or commercial holder, for a span of twenty years and are presumably sustainable (no guaranty). The Concession Agreement is administered by the local Municipality. Foreigners must have legal Costa Rica Residency for a span of five years to hold a Concession property within their name. So, a Trust Agreement must be entered into to facilitate the holding of the Concession with a bulk Costa Rican interest stipulated, until this Residency condition is satisfied, Costa Rica Real Estate Brokers is a great resource.
The larger issue appears in Estate Planning, because if the Residency condition is met by the present Foreign Concession holder, the heir must additionally fulfill this condition at the time of the bequest happening, or a Trust Agreement that is new needs to be entered into to facilitate the same. This is a negotiable item as part of the overall property purchase transaction and may not be appropriate in particular property purchase transactions of a “firesale” nature.
As the Real Estate business isn’t controlled in Costa Rica, nor is there any MLS, it’s very crucial that you select a Realtor with local knowledge in the place where you’re looking to carefully assess their certificate and to buy a property; reputable references are essential.
Similarly, it’s equally vital that you choose Notary and a qualified Property Attorney represent your interests as the purchaser and to manage the purchase trade. Property Title Insurance isn’t accessible, nor do Title Businesses exist in Costa Rica. You must rely upon Notary and your Attorney to carry out the required legal due diligence for your property purchase transaction.
An Attorney/Notary having a Government registered and controlled Escrow Account is not unimportant, to safeguard both the purchase down payment cash before the balance of the purchase cash for the Close and Close. The Attorney should be kept from the beginning of the property discussions, and no down payment or purchase cash should be paid to a seller before the Close from escrow.