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If you are referring to real estate the title of which is not registered in Costa Rica’s National Registry, the advice is a resounding [b]”NO!!”[/b][size=200][/size].
Unregistered land could be a nightmare that you might never resolve. And it is possible that, once you have bought and paid for it, there is some legal obstacle to having it registered. There is no reliable way to tell who actually owns the property and whether it’s that party you’re actually dealing with.
Save yourself the potential of many, many headaches. Only buy property that is registered in the National Registry. Have an attorney of your own choosing, not the real estate agent’s attorney or the seller’s, research the title thoroughly. And if the loss of the purchase price would be a serious blow, have a second attorney of your choosing check the work of the first. It’s cheap insurance.
Or after you find one… go to Stewert title or Chicago title and they can do alot of the work… it might even be cheaper and a lot more trustworthy!
I don’t know what you mean by “finca titled”. As far as I know, all property in Costa Rica is identified in the Registro Nacional by finca number. It’s part of the legal description.
There are two separate documents recorded for each property. First is the escritura (deed). Second is the plano catastrado (registered survey map). Evey property should have both documents recorded. If not, or if they are not up to date or contain errors, you have a potential title problem which must be solved prior to closing.
Also, there are serious potential problems with the law of adverse possession (squatter’s rights) in many parts of Costa Rica. You should always physically inspect the property and have the survey updated with the boundaries clearly marked and be certain that there are no encrochments or trespassers on the property.
Title insurance is not yet very common in Costa Rica and I haven’t ever used a title company here so I can’t comment on their services or prices. I recommend that you use a competent real estate attorney to examine title and rely on his advice. Do NOT use the seller’s attorney to examine title. Hire your own attorney for this.
Jim, I’m not so sure that each and every real estate parcel in Costa Rica is, in fact, registered in the National Registry. As long as a parcel doesn’t change hands, why would the owner go to the expense of registering it?
Anyway, I stand by my advice to only purchase well researched property that is already registered in the National Registry. And ticorealtor’s advice to purchase title insurance, which is available here, is good, too.
[quote=”DavidCMurray”]Jim, I’m not so sure that each and every real estate parcel in Costa Rica is, in fact, registered in the National Registry. As long as a parcel doesn’t change hands, why would the owner go to the expense of registering it?
Anyway, I stand by my advice to only purchase well researched property that is already registered in the National Registry. And ticorealtor’s advice to purchase title insurance, which is available here, is good, too.[/quote]
David, Article 460 of the Civil Code requires that all land titles be registered in the Registro Nacional. This law has been on the books now for many years and most properties are in compliance although obviously some titles are still not registered.
Anyone who buys a property without a registered tile is a fool and I won’t waste my time trying to give them advice.
I also don’t agree with the advice about relying on title insurance or title companies without also having a competent real estate attorney.
The problem is that there are too many exceptions to title policies that the layman doesn’t generally understand. For example, title insurance won’t protect you against any loss for matters which would be disclosed by an accurate survey, claims of parties in possession, etc. Additionally, even though a loss may be covered under the policy the claims process and actual payment of the claim are another matter all together.
Title insurance is no substitute for having competent legal representation. If you want to pay for title insurance as additional protection, fine, but my point is that you shouldn’t rely on title insurance alone. You need an attorney. Again, he should be hired directly by you, not be the attorney for the seller or for the title company.
PS: I have over thirty years experience as a real estate attorney, title examiner and real estate law professor in the US. The laws and practices in Costa Rica are very different than in the States but offer good protection to buyers provided you use due diligence and follow the best recommended local practices, which include using an attorney to represent you.
Jim, I was aware of the legal requirement to register real estate in the National Registry. What I’m skeptical about is whether there is universal compliance. That would be a first for Costa Rica in any venue.
I also never intended to suggest that title insurance should substitute for the services of a good real estate attorney (or maybe two). I just meant that it might provide an additional layer of protection and it is, in fact, available here.
I have approached many attorneys and requested an article about how useful (or useless in many cases) title insurance is in Costa Rica however, since most of them have established business relationships with title insurance companies – not because they want to but, because their clients sometimes request title insurance – they are naturally hesitant to do this…
Scott
Nobody should by property in Costa Rica without reading Scott’s book three or four times. He provides the road I used when I purchased my property. By the time I got to the lawyer’s office I sort knew what we were going to do. Please don’t sit by an not get your lawyer to explain what you don’t understand. Purchasing property in Costa Rica is far different then showing up at US title office and do your closing.
The last thing should do on your way to Costa Rica is re-read Scott’s book, he tells all!
Later,
Tom in Portland
A happy property owner in Costa RicaThere are no escrow bonds in Costa Rica so the Title companies imply that their parent companies escrow bond is in force. And it is, in the US only!.
Now actual title insurance is a placebo. My consultant has taken the fine print to several lawyers who basically agree that its says that they are not responsible for any unregistered defects (basically meaning any title defect that cannot be found in the public regestry). The excludes a lot of potential problems.
Remeber, attorneys have a big stake in the real estate closure and many will not do sufficent due dilligence (research/investigation) that may stop the deal and their paycheck from closing. I have heard peopl say that they trust their attorney but my reply is that you have found a 1 in 10 attorney. (there are nine selfinterested attorneys to the one that will look out for your interests). English only speakers should use attorney fluent in Eglish. So now finding a fluent and self – less attorney in Costa Rica is a hard thing to do. I use a consultant to verify everythiong.
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