by Ivo Henfling

GoDutch Realty’s real estate agents all check title before listing a
Costa Rica property for sale but we still like to share our knowledge with buyers as well as sellers of
Costa Rica real estate. Many of you do not speak
Spanish and it is not too easy to know where to get started on a website you are not (yet) familiar with.
Anyone who owns property in Costa Rica should check at least once a
month if his/her property is legally in good shape or not. It takes only
10 minutes of your precious time. Put it on your agenda, so you won't
forget and read this blog so you can learn how to pull a title search
online.
Costa Rica property
can be purchased in one person’s name, jointly, or in the name of a
corporation or Sociedad Anonima. It is very common in Costa Rica for
individuals to put property in the name of a corporation in which they
own all the shares, although since 2012 you have to pay
corporation taxes if you own a corporation.
You should discuss this asset protection with your tax accountant and
real estate attorney so that you will be informed of the tax
implications and other issues before you purchase Costa Rica real estate
or make an investment.
Real Property
Costa Rican law requires that all documents relating to an interest
and/or title to real property be registered in the property section of
the National Registry (Article 460 of the Civil Code). Most Costa Rica
real estate has a titled registration number known as the Folio Real,
and the property records database can be searched with this number, by
name index or ID number. Properties located in the Maritime Zone
function differently. When you go to the
National Registry website, you’ll find what is in the image below. Click on where the red arrow shows.
That will take you to the next screen, where you click on “Bienes Inmuebles” which means real estate.
That will take you to the next screen where you need to click on what you want to do next
Here you have several options, but you will be mainly interested in the following ways of doing your title search:
-
By Property number or concession - Por Número de Finca o Concesión
-
By Personal name or Corporate name - Por Nombre Físico o Nombre Jurídico
-
By Identification number - Por Número de Identificación
The registry report (informe registral) provides detailed information on the
property, I’ll show you as an example my condo in Sonesta One Jaco and detail on the image what each part of the report means.
Title information
I have deleted some of the numbers, for obvious reasons. The report
gives you the title number, the location, the name of the owner
(individual or corporate), boundary lines, tax appraisal, liens,
mortgages, recorded easements, and other recorded instruments that would
affect title. Since Costa Rica follows the doctrine of first in time,
first in right, recorded instruments regarding
land for sale presented to the National Registry are given priority according to the date and time in which they are recorded.
Title Insurance
For purpose of the transfer of
Costa Rica real estate
this means that any mortgages or liens which are not recorded at the
time that title is transferred are invalid. Since the certificate of
title issued by the National Registry is prima facie evidence of the
condition of title on the date issued, any instrument not recorded at
the time the certificate is issued is invalid. This eliminates the need
for title insurance since any instrument omitted from the report is
deemed invalid, to my opinion.
In this case, this
condo in Jaco has a suit pending or lis pendens. The term “lis pendens” is Latin for “suit pending.” A lis pendens is filed against a
real property
to indicate that the title of property is in question, or that some
sort of lawsuit involving the property could occur in the near future.
When someone files such a notice, it serves as a public notification
that the property is involved in a lawsuit.
Liens and incumbrances
Obviously, every situation differs and in some cases a review of the
National Registry record will not be enough to uncover all encumbrances.
That is why it is important that the buyer have her or his own attorney
conduct an independent title search and investigation rather than rely
on the seller's attorney. A good and responsible closing attorney will
pull a title search on the day of the real estate closing. A
GoDutch Realty agent is ahead of the game and will pull the title search when he/she lists the property.
Some buyers feel more comfortable purchasing title insurance, in which
case the title company will take care of the search and insure the title
or not. In case you are looking to take title insurance, many of the
attorneys we recommend on our website
are star attorneys for a title company, so you can do your Costa Rica
property purchase and everything else all in one office with your
trusted closing attorney.