BiggerPockets

Due Diligence in Costa Rican Real Estate Transactions

Saturday, April 02

Anyone who has bought or sold real estate knows the importance of Due Diligence. And the process is just as important when buying or selling properties in Costa Rica as it is anywhere else in the world.

First, let’s look at exactly what Due Diligence is: This refers to the process of researching the physical and legal status of a property you are interested in buying, before you buy it. As one might expect, performing a thorough Due Diligence can save you a lot of major headaches and heartache down the road, not to mention a lot of money.

It is important to not rely 100 per cent on a real estate broker or owner for the Due Diligence information; this is one of the many times during a real estate transaction where a good Costa Rican attorney will prove to be invaluable.

During Due Diligence, you are essentially confirming that the property is what the seller says it is, that the property has no legal orders against it, and that you will be legally allowed to use the property as you plan.

It is always a good idea to have a good lawyer conduct this search for you, no matter who the owner of the property is, no matter the size of the property transaction, and no matter what your plans are for the property. If you prefer, your lawyer can even arrange the appointment of a Due Diligence professional and subsequently monitor the data that person collects. In some cases, your lawyer may need to hire a site surveyor as part of the Due Diligence process.

Here is a list of some of the basics aspects of the process:

·         Make sure you know the real value of the property – not just what the asking price is.

·         Make sure the property you are about to purchase is not part of a national park or subject to restricted use. There are rainforest areas, for example, where it is forbidden to cut any trees.

·         If you are purchasing property in a remote region make sure there are electricity and water connections to the land.

·         Do not rely on a verbal contract if you decide to make an offer. Get everything in writing.

·         Hire a home inspector or engineer to make sure any building is structurally sound. Check the plumbing, wiring, roof, water pressure and septic or sewage system.

For more information on Costa Rica, contact Lic Giovanna Barrantes at 1-800-979-4174                or at info@lawyerofcostarica.com, or go to Barrantes & Associates.

Costa Rica Property The Southren Zone

Sunday, March 27

Real estate opportunities in Costa Rica include many different types of properties in many different environments – in every region.

Many flock to the Central Valley, home to Costa Rica’s largest city and capital, San Jose, and also home to many top real estate developments.

But those wanting to really get away from it all also have several regions to choose from in Costa Rica, where they can feel like they’re the only person on the planet.

One of those is the Southern Pacific Costal Zone, which includes the Golfo Dulce, the Osa Peninsula region, and the mountainous rural inland areas of Agua Buena and San Vito. What creates the beauty of this area is the constantly changing terrain. It shifts from rainforest to mountains to beaches.

The southern coastal area’s Pacific Ocean border is dominated by the Osa Peninsula and the Golfo Dulce (Sweet Gulf), a large bay ringed by rivers. In this area are the Golfo Dulce Forest Reserve, and Piedras Blancas National Park.

The Osa Peninsula juts into the Pacific Ocean off the coast, and is considered by many one of the greatest paradises in the world. It is home to a wide variety of species. This is where the jungle meets the ocean. The terrain moves from lowland tropical rain forests to secluded white-sand beaches. It is known as the last wild frontier in Costa Rica.

Most of the lowlands surrounding the Golfo Dulce are home to tall evergreen forests, and they’re not hard to spot, as  the area includes some of the tallest trees in Central America.  But it’s still a rainforest, and that means an average annual rainfall of 150 - 200 inches.

Visitors and would-be residents will find plenty of real estate opportunities to choose from, including ocean view lots, beach front houses, farms, and commercial business.

Prospective real estate buyers should note that in most cases, outright ownership of beachfront land is prohibited, but they can be leased from local municipalities. Costa Rica has a real estate category called Maritime Concessions that prevents private ownership of oceanfront property but long-term leases can be negotiated. This does not affect properties near beaches.

Of course, you can always move inland, to the southern mountainous region of San Vito, which offers incredible views of the distant Talamanca Mountains to the north and Panama's Volcano Baru to the southeast. This sweeping rural landscape is mixed with old coffee plantations and small farms.

Costa Rica Real Estate Pacific NorthWest

Sunday, March 27

Retirees and others looking for a prized piece of real estate in Costa Rica have six regions to choose from, and one of them is the Northern Pacific zone, which encompasses the northwest region of Costa Rica.

The Northern Pacific zone is made up of vast plains and is drier than the Central Valley, where the capital of San Jose is located, as well as the regions of the central and southern coastal zones. But Costa Rica’s Northern Pacific zone boasts some of the country's most beautiful beaches, breathtaking views, history, culture and, that’s right, nightlife.

At the heart of the region is the city of Liberia, the capital of the Guanacaste province, which is home to all of the above attractions.

Liberia, located 125 miles north of San José on the Pan-American Highway, is one of Costa Rica’s fastest growing cities. It is known for its colonial architecture, and is a growing cultural Mecca with restaurants, hotels, several museums, lots of shopping, a public hospital and the Daniel Oduber International Airport, which offers more than 40 weekly flights to the United States.

The city is good stopping-off point to Guanacaste's many beaches, which are now more accessible with the new Tempisque Bridge, which opened in 2003. The bridge, which replaced ferry across the river, spans 780 meters and serves as a launching point for major development of the Guanacaste region.

This bridge has helped to gap the gulf between the Nicoya Peninsula and San José and the rest of the country. The bridge and other infrastructure improvements have helped make the region a hot spot for real estate development.

Another big development in the region is a new wild animal park, Africa Mía, a 100-acre open-air zoo with free-roaming animals.

Real estate buyers will find a wide range of condominiums in the region, on both isolated and popular beaches, with prices ranging from $100,000 to $750,000 depending on location. Some new developments also include gated communities and golf resorts, always popular with retirees. For those wanting to build their dream home, undeveloped beach and oceanview properties are available in some areas.

A number of high-end hotel and resort developments have been built in Guanacaste in recent years, like the Four Seasons Resort on Playa Blanca, the 370-slip La Marina Papagayo on Manzanillo Bay, a new 200-acre upscale hotel at nearby Punta Cacique, and the new $15 million Marina Papagayo.

Besides beautiful white sand beaches and the swimming, diving and fishing opportunities they offer, visitors and new residents will find lots of restaurants, bars, discos and casinos throughout the province of Guanacaste.

For more information on Costa Rica, contact Lic Giovanna Barrantes at 1-800-979-4174                      or at info@lawyerofcostarica.com, or go to Barrantes & Associates.

Costa Rica Real Estate The Purchasing Process

Friday, March 04

Real Estate in Costa Rica, The Purchasing Process

You’ve found your dream home or lot in Costa Rica, and now you want to make an offer.

Here are the five main steps a purchaser must take to acquire land in Costa Rica:

• Sign an Option to Purchase/Sale with seller
• Deposit funds into escrow (if available)
• Title research performed by a law firm or Notary Public
• Closing – Execution of Transfer Deed, Endorsement of Shares and/or Mortgage Deed and disburse funds
• Register new owner with Public Registry

Before you even make an offer, though, you would be wise to find a good Costa Rican law firm or notary to help you navigate the purchasing process.

Even with good guidance, there are still a number of things you should know for yourself, like the main terms in the process:

Folio Real: Essentially, this is a unique number that identifies the property that would be on file at the Public Registry of Property in San José. All titled properties must have a Folio Real.

Transfer or Conveyance Deed (escritura de traspaso): An important document that includes basic information about the buyer, seller, the property, and any special terms of sale, such as easements or mortgages. This document must be prepared by an attorney or notary, and must be recorded in a Notary Book and the Public Registry of Property.

Survey Plan (Cadastral Department): After the Public Registry of Properties, the next most important registry for buying property in Costa Rica is the Cadastral Office, which holds all of the property surveys. Because the Public Registry and Cadastral Office are separate entities, there are instances when surveys for an older property will be on file at the Cadastral Office.

Foreigners buying land in Costa Rica should also strongly consider buying through a corporation, something that is very common in the country. Setting up a Costa Rican corporation is not complicated, but, again, a law firm should be consulted before proceeding.

There are many advantages to going this route, particularly the ability to protect an asset anonymously, and, if a property is acquired through an existing corporation that already owns the property, there are no government transfer taxes and stamps to pay.

For more information please contact the law offices of Barrantes & Associates, a full service Costa Rican Law Firm located in San Jose since 1999, at info@lawyerofcostarica.com or by calling 011 506 2 256 3807.