Property Fraud – Protect Your Costa Rica Real Estate with a Title Guarantee

Some property owners have had their property stolen from under them.

Fraud begins with corrupt lawyers who take advantage of public trust and work with delinquents to transfer property. Unscrupulous lawyers do this by creating false documents or falsifying signatures.

Public trust grants lawyers the right to claim that all documents are true and legal, even before the documents reach the Public Registry.

Many of the victims of property fraud have been foreigners, who invest in a property but do not live here. Or because of lack of knowledge or misinformation, buy a property that does not exist.

To protect against this, there are now a few different title companies in Costa Rica that offer a mechanism that guarantees land ownership.

The plan protects both buyers and sellers of real estate. It is not insurance, but rather a title guarantee.

Typically there are two types of guarantees can be purchased from the company.

1. One lasts for as long as the owner keeps the property.
2. The other is renewed yearly.

Before any sale or purchase, the company investigates the property at the National Registry to verify that it is free of mortgages, liens or other legal problems. Only when they are absolutely sure that the person selling the property has clear title to it, do they guarantee.

If a fraudulent transfer does occur, the title company pays the beneficiary the guaranteed amount or will pay (according to the guarantee value) for legal costs involved in recuperating the property.

Fees vary according to the size of the title guarantee or the value of the property and range from 0.3 percent to 1 percent for a long-term guarantee.

For example, for a $35,000 home, the cost would be $350 while for a $150,000 home, the cost would be closer to $1,000.

Another guarantee, renewed yearly, is “follow-up.” and consists in constantly monitoring property to assure that it has not been the object of fraud, nor mortgaged or sold by a third party.

If an anomaly is found, legal steps are immediately taken and the Costa Rica title company informs the Registry to stop all movement on the property.

The guarantee is helpful because the Courts have two separate ways of resolving these cases.

One law protects the buyer. Another law states that if a fraudulent document has been used, the buyer loses his rights to the property. Sometimes more than one person has been fraudulently sold a piece of property. After a resolution, depending on the date of the fraudulent documents used, one of them is going to lose his investment.

Clues:

When investigating a property, watch for these anomalies.

1. False transfers or false names
2. Very old legal documents dealing with associations.
3. Special powers which were not made clear by the lawyers.
4. In the case of foreigners, old passports or personal descriptions that do not match the person.

Our thanks to Gloriana Gomez and our friends at La Nación – Costa Rica’s largest Spanish circulation newspaper for their permission use this article.

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Andrew Makarik

to@welovecostarica.com

Andrew Makarik is the main editor of WeLoveCostaRica, a fan of this sunny country. He is also a loving husband and a has a lovely daughter. By being a devoted family man and the biggest Costa Rica fan, he wants to make more people feel at home there. WeLoveCostaRica unites people and helps them find new home or a new travel destination. This website is a friendly community where everyone can find not only information, but also new friends and travel pals. Andrew is also passionate about IT and programming, so he himself maintains a friendly atmosphere in this cozy environment of WeLoveCostaRica.com.