Is Title Insurance available in Costa Rica?
No. It is not.
|These Title Insurance companies can offer escrow accounts or title searches, but not Title Insurance.
Mostly because the opened insurance brokerage market here in Costa Rica is heavily regulated and the law makes it practically impossible to get through with the licensing required to issue Costa Rican Title Insurance. (The insurance market is opened to competition since 2009 with The Central American Free Trade Agreement “CAFTA”).
So what is left to secure your purchase?
If you can’t get title insurance in Costa Rica, your homework/due diligence becomes your title insurance.
I have been meticulously looking for ways to secure buyers when they purchase land in Costa Rica. Here is a list of steps that can’t be skipped, to complete your due diligence:
Hire Real Estate Professionals and Competent Lawyers.
Choose The Best Realtor:
Knowledge only comes with experience, knowing the local history is KEY number 1. Don’t go too fast to choose your people, these are the people who can make your purchase a fun time or an incredible nightmare. Choose somebody that can answer your questions.
Educated is better, meaning, Realtors are supposed to be able to write pre-contracts. Realtors also need to be able to navigate through the bureaucracy here in Costa Rica. Your realtor must be up to date with the laws such the ones about the public road, segregation, easements etc., and the general red tape involved in every real estate transaction.
Computer knowledge is a Must, a lot of info pertaining to your real estate can be checked online. Multiple languages is highly recommended (reading and writing). Have your own tests to check the integrity of your Realtor, I am not kidding: I’ve met many greedy ones over the past years, and they would sell their own mother so Buyer Beware.
Also a good Realtor should provide a helpful follow up. The relationship with your Realtor doesn’t stop at closing. Pick his or her brain on all the steps of both your transaction and your move.
Choose The Best Lawyer:
The most expensive Lawyer is not categorically the best Lawyer. Get referrals. I recommend to use a local lawyer closer to your home and to the municipality your property depends on: it is more convenient. Again, your Realtor should be able to refer you to good Lawyers. (Remember – All Lawyers are not good Lawyers…) Your lawyer is in charge of the property title search, he or she is actually required by law to complete it.
A Costa Rican Lawyer could lose his or her license temporarily for negligence. Complaints and lawsuits about bad practice can be presented at the Chamber of Lawyers. http://www.abogados.or.cr/
The title at the National Registry of Costa Rica: Do a title search and investigation.
Owners, easements, mortgages and liens or any clouds on title should be verified. Also see below about the survey check: make sure there is no multiple surveys superimposed. Look up at the title issue date: the older the better.
New title can be contested within a three year period after its issue date. It doesn’t mean it will, but just be aware that this is a law concerning new title, especially if you are in an area with land disputes. Again here, your Lawyer is in charge and responsible for the title search. Verify his search right here: https://www.rnpdigital.com/
It is also always a great idea to verify the boundaries and the size of the property you are buying. Even though a property may have an existing survey . Surveyors now work with accurate modern tools, so surveys are much more precise than 10 years ago.
Make sure your surveyor is a licensed surveyor. Many fly under their cousin’s or mother-in-law’s surveyor license, and this is not legit. First, it is illegal, and secondly, you will end up losing your time and money. A good Realtor should have a favorite surveyor.
One major due diligence issue (THIS IS HUGE) is to verify that there is no other survey on the top of the lot you are buying. This is done by your surveyor, for a fee, at the Costa Rican National Registry in San Jose, in the Catastro section.
A 120 acres farm is unoccupied, but has a survey from 1973. In 1988, Squatters came and settled down on 20 acres of the 120 acres farm. They got a survey for those 20 acres. At the time, The Costa Rica National Registry was not computerized, so it was pretty hard to connect those two different farms on paper.
Nowadays, all the surveys are recorded by a computer. Your surveyor can ask for a copy of all the surveys belonging to a same area, and create a mosaic of surveys. He will then analyze which farm is encroaching another farm.
Property taxes if due by the sellers should be paid prior or at closing. Property taxes are prorated. The property taxes are payable at the municipality. It is pretty easy to find out if the property owes taxes. That is one of the tasks your lawyer should complete. Your Realtor can also find out for you.
Electricity and water.
Those utilities access should be part of your due diligence.
If the lot is not connected to the National Electric system (ICE), see how far it is. You have three options to get electricity:
In our area, most of us have a well. Some of us are connected to a neighborhood water system. Playa Zancudo has an official water system (AYA). In Pavones, we don’t have an official water system yet although its design and budget are ready. The project should be done within two years. So Legal water in Pavones is not quite available. The municipality in Golfito, knows it and still issue building permits, but requires a water bacteriological analysis.
Protect your investment:
If you don’t live on your land, make sure you or a trusted friend check your land every two months. That will keep you clear off squatters.
Maintain your land, cut the grass. A permit from Minae is required to cut a 4 years grown jungle.
Pay your property taxes every year.
Check on your title twice a year. You can do it on line: https://www.rnpdigital.com/
You may hire a property manager to complete those tasks.
Follow those steps and advices, enjoy life in the Costa Rican jungle and remember to avoid the snakes.