Due Diligence in Costa Rican Real Estate Transactions

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 , or go to .