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  • TicoNET Real Estate - Costa Rica Properties
    Colon San Jose Central Valley Type Land Price 75 000 Beds Baths Good Lot for a Home 1 000 sq mt 0 25 acre Ciudad Colon San Jose Central Valley Type Land Price 75 000 Beds Baths Bargain Nice Homesite 937 sq mt 0 23 acre Santa Ana San Jose Central Valley Type Land Price 95 000 Beds Baths Nice Lot w Lake Views Good Location 4 750 sq mt 1 17 acres Lake Arenal Guanacaste Northern Region Type Land Price 153 000 Beds Baths Excellent Residential Lot with Views 1 127 sq mt 0 28 acre Escazu San Jose Central Valley Type Land Price 163 000 Beds Baths Great Lot Great Views to Lake Volcano 5 432 sq mt 1 34 acres Lake Arenal Guanacaste Northern Region Type Land Price 180 000 Beds Baths Lovely 1 Ha 2 5 acres Parcel with Great Views Puriscal San Jose Central Valley Type Land Price 187 000 Beds Baths Residentiala Lot with Views 2 671 sq mt 0 66 cre Santa Ana San Jose Central Valley Type Land Price 215 000 Beds Baths Residential Lots for Sale in Santo Domingo Heredia Santo Domingo Heredia Central Valley Type Land Price 225 000 Beds

    Original URL path: http://www.ticonet.co.cr/listings/index.php?action=searchresults&pclass[]=3 (2015-06-03)
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  • Investor's Guide: General Instructions
    in this guide The procedures are presented graphically and logically in each one of the diagrams In order to facilitate the process we recommend the user begin by consulting Diagram N 1 How to establish a business enterprise and Section 2 How to establish a business enterprise in Costa Rica Both sections offer an easy step by step notion of the sections to be consulted For each procedure a complete description is presented including the requirements terms forms and legal basis The forms have been translated to the English language with the objective of facilitating comprehension however for official purposes they must be filled out and submitted in the Spanish language The legal basis references to laws decrees and regulations of the different procedures is located at the end of each section and can only be found in the Spanish language To obtain laws in addition to those that appear in the digital guide please refer to the electronic addresses of the Judicial Power and the Attorney General of the Republic http www poder judicial go cr or www pgr go cr scij The information contained in the digital guide is updated periodically The updates are available in the web

    Original URL path: http://www.ticonet.co.cr/costa-rica/investments/index.html (2015-06-03)
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  • TicoNET Real Estate - Real Estate Information - Buying a Business in Costa Rica
    you are interested in Thus legally as well as technically this corporation will continue to own the business operation Before taking this step you must carefully scrutinize the real situation as best you can On the psychological side is the perceived honesty of the seller which is either enhanced or prejudiced by how orderly and clear the business records are On the business side you will need to examine the records to judge the legal and financial health of the business The following aspects are basic Public legal corporate records such as recorded articles of incorporation bylaws type and amount of capital stock and powers of attorney These are best checked by a knowledgeable corporate law attorney Private legal corporate records such as current stock ownership possible pledges of same and stockholder and board resolutions not on public record These are also best checked by a knowledgeable corporate law attorney Corporate accounting These records should clearly show the true income and expense situation fixed and liquid assets intangibles such as a business name and short and long term liabilities This accounting should also include the mandatory tax accounting books with updated information These records are best checked by a certified public accountant Tax situation at the national level including yearly income sales corporate stamp property taxes monthly sales taxes and hotel lodging taxes These are also best checked by a certified public accountant Tax situation at the local level including municipal road taxes and commercial license fees Local municipal charges for services such as waste removal street lighting and street cleaning should be checked simultaneously These may be checked either by a certified public accountant or a knowledgeable attorney at law Permits including the local health authority permit and the municipal business license These should be checked for the specific activity currently being carried out special licenses for the sale of domestic or foreign beers wines and liquors permit for late hours functioning and registration with the Tourism Board for lodging tax and recognition of a tourism quality restaurant These permits are best checked by a knowledgeable attorney at law Employee records including written contracts specifying employee particulars with responsibilities and salaries along with up to date social security and worker s compensation insurance payments Here it is best to insist on payment of benefits mandatory vacation Christmas bonus and severance pay accrued by the employees to the date of closing These records may be checked by a certified public accountant or a knowledgeable attorney at law Property title and plot map studies Ascertain that the property is recorded in the name of the corporation as well as checking for the presence of liens encumbrances mortgages and judicial claims The recorded measurements on the property title should agree with the actual measurements on site This information is best checked by a knowledgeable real estate attorney in conjunction with a topographer where needed Lease contract when the business locale is rented rather than owned Check whether the lessor is the current

    Original URL path: http://www.ticonet.co.cr/real-estate/business.html (2015-06-03)
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  • TicoNET Real Estate - Real Estate Information - Buying? Building? Here is what you need to know
    fees have been paid it is the obligation of the notary who drafted the transfer deed to ensure that the deed is presented anotado and registered inscrito in the Property Section of the Public Registry I have stressed the words presented and registered to highlight the importance of following up with the notary to ensure registration Although presentation guarantees your priority i e first in time first in right it does not automatically guarantee registration The Public Registry will not register a transfer deed unless all taxes and registration fees are included a certified copy from the Finance Ministry Ministerio de Hacienda is provided certifying that the seller s property tax impuesto territorial payments are current and a municipal certification is provided from the municipality where the property is located certifying that both buyer and seller are current on municipal tax payments Likewise any prior instruments that encumber the property i e mortgages liens judgments etc must be lifted before your transfer deed will be registered Once a transfer deed is accepted for registration the Public Registry will return the original document with all the documentary stamps affixed to it and properly sealed Assuming no defects in the transfer deed it should be registered by the Public Registry with 45 to 60 days after presentation It is therefore important to follow up with the notary to ensure registration otherwise you will run into problems in the future when you decide to resell the property and find out that your sale was not registered I want to build What do I do In order to build in Costa Rica you will likely face a bureaucratic maze of governmental regulations The law requires that any application for a construction permit be presented by a licensed architect or engineer Article 83 Law of Constructions Article II 2 Construction Regulations It is therefore advisable to contact a reputable licensed architect or civil engineer to guide you through the construction process What do architects and engineers charge All architects and engineers in Costa Rica must be licensed by the Costa Rican Association of Engineers and Architects Colegio Federado de Ingenieros y Ingenieros y Arquitectos CFIA This governing body establishes the fee schedule that can be charged by its members Most fees are based upon a percentage of the value of the construction project According to the regulations of the CFIA Reglamento para la Contratacion de Servicios de Consultoria en Ingenieria y Arquitectura the involvement of a licensed architect engineer in a construction project is separated into two phases Phase 1 is construction plans and permits and phase 2 is control and execution Phase 1 Construction plans and permits This phase is further subdivided into several distinct professional services that can be provided to the client by the architect engineer The percentages cited below are those that the CFIA has established as minimum chargeable fees Preliminary studies estudios preliminaries 0 5 percent These studies may or may not be required depending on the scope of the

    Original URL path: http://www.ticonet.co.cr/real-estate/buying.html (2015-06-03)
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  • TicoNET Real Estate - Real Estate Information - Legal Tips, Tricks, and Traps in Costa Rican Real Estate
    property taxes Even in terms of avoiding complicated inheritance situations it is usually best to draft a Costa Rican will to make provisions for handling a local residence in the event of the owner s passing away A simple and properly formalized will guarantees a smooth and fairly rapid court procedure for transferring such property to an heir s If one desires nonetheless to avoid the court procedures entirely and use a corporation as a holding company for the property it is absolutely necessary to ensure that the heir s hold a majority of the stock or have registered powers of attorney allowing them to dispose of the property Unless this is done the heir s would again be subjected to court procedures which in the absence of a proper will could be difficult in order to claim the company shares and or have to register powers of attorney after holding a stockholders meeting to that effect plus other attendant notarial formalities Finally in terms of avoiding property transfer taxes by transferring the stock of the company holding a property I see little purpose since a careful attorney will advise a purchaser to transfer a property out of the corporation and pay the transfer taxes rather than risk taking on any liabilities not reflected on the company books Generally I only advise forming a business corporation for properties meant to be exploited in a business enterprise and then only when truly legally necessary Before purchasing a property for a business venture do consider that according to the Costa Rican Code of Commerce a foreigner cannot carry out business in his own name unless he or she has accumulated at least ten years of legal residency The foreigner may however carry out business through a Costa Rican corporation which he may wholly won and fully represent This is so because a Costa Rican corporation that is formed and registered in Costa Rica is by definition a Costa Rican legal entity and specifically created for organizing business ventures here Yet certain business areas most notably the mass media advertising banking and shoreline tourist projects have severe restrictions on foreign owned corporations Each of these examples requires very careful research with qualified consultants before committing to a corresponding real estate transaction It is also worth mentioning that mortgages in foreign currency have recently been allowed by a Constitutional Court decision however the debtor always retains by law the right to pay in local currency at the current real value of the foreign currency specified in the mortgage This applies unless the debt is registered as originating in foreign commercial financing Concerning rural properties the U S Consulate advises purchasing a rural property only when you plan to live on it not for purely speculative purposes This is because Costa Rica takes a generally peaceful approach to the not uncommon squatter problems that usually involve absentee owned properties The law actually provides for mandatory government expropriations for land disputes when squatters have put the

    Original URL path: http://www.ticonet.co.cr/real-estate/legal.html (2015-06-03)
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  • TicoNET Real Estate - Real Estate Information - Property Rights and Foreign Investment in Costa Rica
    Terrestre the unavoidable reality of squatters and the possibility of expropriation More space will be dedicated to the Zona Marítimo Terrestre as it is by far the most convoluted and misunderstood hazard of property ownership Zona Marítimo Terrestre Costa Rica is famed throughout the world for its beautiful untainted beaches It is therefore no surprise that beachfront property is actively sought by American developers retirees and those looking for vacation homes The significant caveat regarding beachfront development is that it is rarely the bargain it appears The principal problem is that no private ownership of beachfront property is allowed The Costa Rican government owns the first 200 meters of the beach front area known as the Zona Marítimo Terrestre or the Maritime Zone and it is governed by the Ley sobre la Zona Marítimo Terrestre hereafter referred to as ZM The first 50 meters are public beaches on which absolutely no construction may take place or any concession be granted The remaining 150 meters may be developed via special concessions that are granted by a governing Municipality ZM Art 35 In order for any construction to take place on this 150 meters the area must be part of a Plan Regulador or a special zoning district created by the Instituto Costarricense de Turismo ICT It should be noted that some privately owned beachfront property does exist due to the fact it was registered prior to the 1977 Maritime Zone law which has a grandfather provision providing for such ownership ZM Art 6 Before actually attempting to obtain a concession for developing rights in the Zona Maritimo Terrestre a foreign investor must first be in compliance with Article 31 and 47 of the Ley Sobre la Zona Maritimo Terrestre Carballo 28 June 1995 interview Article 31 specifies that at least fifty percent of the development capital must be Costa Rican ZM Art 31 In addition foreign investors must have resided in Costa Rica for at least five years ZM Art 47 Such discrimination concerning foreign ownership could possibly be questioned on a constitutional basis in the Sala Constitucional or the Constitutional Court Article 19 of the Costa Rican Constitution CRC explicitly states that foreigners have the same individual and social rights as Costa Ricans CRC Art 19 However Article 19 does contain ambiguity with the inclusion of the clause with the exceptions and limitations that the Constitution and its laws establish thereby creating the window for Article 31 of the Ley de Zona Marítimo Terrestre which allows discrimination against foreign investment CRC Art 19 and ZM Art 31 Inevitably there are methods employed by those who seek to circumvent the restrictions of foreign ownership as established by Article 31 Carballo 27 June 1995 interview A common procedure entails establishing a Costa Rican as the legal owner of a parcel of land by recording his her name on the necessary documentation Frequently the name of the attorney or one of his her staff is used as the local owner on the concession Needless to say such measures have a certain amount of inherent risk For example in July 1995 the Municipality of Golfito threatened to pull the concession rights of many foreign investors on the grounds of Article 57 which states that no person together with his her spouse and minor children will be able to have more than one concession ZM Art 57 The fact that many foreign owners use the same lawyers and hence have the same names as the legal owners of their concessions is now creating a major problem in the Golfito region Such non compliance with the law may result in the nullification of concessions without compensation The first step for a foreign firm or individual interested in developing the 150 meters of the Zona Marítimo Terrestre is to contact the Municipality that has jurisdiction over the desired coastal areas ICT 7 July 1995 interview It is absolutely imperative that the area proposed for development be covered by a Plan Regulador created by the ICT and that its zoning requirements be compatible with the proposed development project Beware of so called rights of occupation granted by Municipalities Such rights are only tentative and must ultimately succumb to the zoning requirements of a Plan Regulador when or if it is created by the ICT making rights of occupation too volatile and susceptible to corruption to be recommended for development If the ICT has already created a Plan Regulador in an area the developer must abide by the arrangements of the Plan or risk losing the concession If a Plan Regulador does not exist a firm wishing to develop the area must write a proposal for the implementation of such a Plan The proposal is in essence an environmental impact statement that must include detailed information about possible damage to the environment proposed rights of way and other necessary infrastructure developments By law the Municipalities are unable to grant concessions in the Zona Marítimo without the aforementioned development plan ZM Art 38 and without the consent of the ICT ZM Art 37 Foreign investors wishing to develop tourist areas in the Zona Marítimo may seek tax incentives from the ICT The granting of such incentives are governed by law No 6990 of 30 July 1985 which was amended by law No 3293 of April 1992 Regulations for tourist areas are governed by Decree No 9387 of 8 January 1979 ICT 7 July 1995 interview Keep in mind that the ICT has the sole faculty to declare tourist zones and such zones are published in the Diario Oficial La Gaceta ZM Art 27 An understanding of the law and its inherent ambiguities is absolutely necessary before purchasing concessionaire rights Obviously one should not heed hearsay or follow the advice of friends and neighbors Such behavior could result not only in the loss of the concession but also that of improvements such as a house on the property without compensation from the Municipality The following are some principal points of the

    Original URL path: http://www.ticonet.co.cr/real-estate/rights-investment.html (2015-06-03)
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  • TicoNET Real Estate - Real Estate Information - Protecting Your Property Rights
    under more restrictive conditions On the other hand there is no doubt that the increase in rural population and the need for jobs together with the increase in real estate prices will push even more people toward squatting Therefore rural property owners should be even more attentive in protection their properties In the event of squatting problems the owner must immediately react with legal measures This means presenting within three months of the date the problem started either a civil procedure known as interdicto or a criminal action charging usurpacion A late response from the owner can lead to lengthy and costly procedures and worst of all to the possibility that the de facto tenants will control the property As a buyer you should carefully study the situation of the property you are acquiring If the property is registered at the National Registration Office you should take the following basic steps Through your lawyer carefully review the ownership status of the property at the National Registration Office Since there have been some laws that inadvertently protect the tenants of de facto occupants over the legal owner you must ensure that both ownership and tenancy possession rights are uncontested Otherwise if possession rights are challenged in a local court or if you must seek legal remedies to gain back control of the property you will be in a much more risky position The owner or seller of the piece of should hold the possession rights Under normal circumstances buying registered property is more secure Certainly however the mere fact that the parcel has been registered does not necessarily mean there are no squatters de facto possessors or other contingencies that could affect its ownership But in the event of a legal claim it is easier for the owner to defend a registered parcel than a non registered one Review carefully the legal status of current workers or the situation of any property keepers prior to executing the purchase Prior to any transfer of money you must study the legal conditions and rights of any workers found on the property If there are keepers of any kind they should be fully paid and compensated by the seller You should not walk into any situation in which ownership or possession could be disputed by property keepers or former workers on the seller s payroll If your decide to keep any of the current workers on your payroll after the purchase agreement is executed a written waiver from the worker reflection payment of all previous working benefits is a must In addition you should issue a simple written contract that spells out clearly the date on which the worker is being hired his or her salary and job benefits any other conditions of employment and most importantly the fact that he or she is a worker and not a possessor A tremendous mistake can occur when the new owner is not careful and simply makes verbal agreements with the former property keepers or workers

    Original URL path: http://www.ticonet.co.cr/real-estate/rights.html (2015-06-03)
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  • TicoNET Real Estate - Real Estate Information - Purchasing Real Estate in Costa Rica
    have nothing to fear and can purchase the property This is true in most cases but not in all As title insurance is not currently available one should pay special attention to have a thorough title search and property study Once you have purchased your property it will be registered In order to ascertain that registration has taken place you may get the testimonio or copy of the closing document with the seals showing its registration or a certificate certificación from the registry showing registration in your name Due to changes taking place in the Registry at this moment the microfilm section will disappear in the near future possibly being substituted for a scanning section Other similar changes are being studied and may be adopted Getting Professional Help Real Estate Agents or Brokers You may already have a property in mind or may want to look for one If the latter is the case you will make your first important decision finding a real estate agent or broker agente or corredor de bienes raíces Such an agent or broker will usually receive a commission from the seller of between 5 and 10 of the purchase price if the sale is closed Most agents or brokers will have their own list of properties for sale Such a list should not be confused with what you might know as listed properties Some real estate agents or brokers have executed legal documents establishing their right to act as agents for the seller most have not In Costa Rica not all persons acting as real estate agents or brokers are licensed There are few regulations as to the process and almost anyone can act as an agent or broker although there are some very good agents and brokers with a long track record When you look for a real estate agent or broker it is advisable to check his or her reputation You can also check if he or she is a member of the Costa Rican Chamber of Real Estate Agents Cámara Costarricense de Corredores de Bienes Raíces or the Costa Rican American Chamber of Commerce AMCHAM Remember the agent or broker is paid a commission by the seller for the sale of the property and therefore has a vested interest in the sale The real estate agent or broker has no legal obligation to you as a buyer other than helping reach an agreement between you and the seller Needless to say he must not misrepresent the property to you Most will also act as intermediaries in the negotiation of the price and conditions of the purchase Some will on their own initiative have studies made in the Registry in reference to the property Very few will go beyond that point If possible obtain written statements from real estate agents or brokers or sellers as to those special characteristics you want the land or house you are purchasing to have It is surprising how statements differ when put in writing it is also the only way to have legal recourse if such statements prove to be untrue Attorneys and Notaries While you are looking for your property or once you have found it you will need an attorney abogado Choosing your attorney is your second important decision Your attorney will be the person who will protect your interest during the negotiations and the closing The attorney will check the property s registration at the Registro and inform you of its registered legal status its owner and which if any liens and encumbrances are registered or in the process of being registered against it He will also advise you as to the conditions and clauses of the contract for sale When you reach the point of closing the seller and buyer must select a notary notario The notary will be responsible for drafting and registering the purchase documents Legally the notary is working for both parties and should look after both parties interests In fact this obligation is often not complied with since the notary tends to be a trusted person of the party selecting the notary If you are paying in full upon closing you as the buyer have the right unless otherwise agreed to select the notary If your purchase is financed by the seller he will have such right unless agreed differently Selecting the notary may be the subject of negotiation If nothing is agreed the notary will be designated by the parties as stated according to statutory provisions If you are financing your purchase with a lending institution the institution will want to designate the notary as a condition to the financing If you wish to select the notary it is advisable that you make known your feelings to the seller during the negotiations Another possibility is the use of two notaries in the closing deed or a notary for the purchase and another for the mortgage if any although this last case may be more expensive in stamp taxes registry and notarial fees Notaries under Costa Rica s civil law system have much greater responsibilities than under common law In Costa Rica notaries must be attorneys before they are accepted by the Supreme Court to act as notaries It is this Court that regulates notaries and their conduct Notaries are responsible for studying the property in the Registry and seeing that it does not have liens or encumbrances or any other limitation registered or in process of being registered of which the buyer does not have knowledge The notary in effect makes the equivalent of a limited title search Also the notary will make sure the property you have selected is duly registered in the alleged owner s name and that such owner has the right to transfer title If there are liens encumbrances or any other restrictions registered he must let you know so they are accepted in the closing contract The notary or notaries responsible for the closing must draft the purchase contract The document will be incorporated into the notary s register commonly known as a protocol book protocolo under a specific deed number for execution Once signed the notary is responsible for registering the purchase in the Registry as soon as possible He may not be able to do so and is not responsible for final registration until all needed documents and monies are provided to him by the parties and his fees are paid in full In a normal transaction the documents needed are 1 A legible copy of the land tax impuesto territorial receipts paid up to the quarter trimester of the date of purchase provided by the seller 2 A certificate constancia municipal issued by the municipal authority of the Municipality where the property is located stating that all taxes and fees for municipal payments are current provided by the seller An identical certificate as the aforementioned one but for the buyer provided by the buyer 3 Enough funds to pay all taxes and registration fees of the transaction Usually provided in equal amounts by both parties 4 Full payment of notarial fees usually provided in equal amounts by both parties 5 Other necessary authorizations needed to segregate a section of land from a property whenever this has not been done before the closing and is necessary to transfer the section you purchase or to cancel a prior mortgage lien or encumbrance in order to transfer free of liens and encumbrances or any other document or payment required due to prior transactions registered or in process that are not the responsibility of the notary provided by the seller 6 Powers of attorney poderes when needed provided by the party acting with the powers or other corporate documents The referred documents and monies are to be provided to the notary on or before the execution of the closing deed If the notary is not provided with all the above he is not responsible for finalizing the registration although he is responsible for presenting the deed to the Registry if it has been executed When one or several of the documents or monies are not given to the notary or paid in full on time it is within his right not to execute the deed The notary must finalize registration once he has been provided with all such documents and monies There is relatively new legislation making it compulsory for all parties involved in registered transactions to be current with all their taxes Since several different procedures have been adopted to comply with such requirement some of the documents listed may vary and others may be added to the list Refer to your attorney for an updated list within sufficient time before closing Presentation of the deed to the Registry commonly referred to as the annotation anotación will protect the buyer since he will have priority over those documents that might affect his rights presented to the Registry after his Your attorney if he is not also the notary will review the deed and suggest those changes he may deem necessary to protect your interest and reflect clearly the intention of the parties Be aware that if you request a notary to prepare a deed for execution and then do not wish to do so because of reasons different than those in which the notary may be at fault he has the right to collect from you a fee equivalent to 25 of the fee he would have collected if the document had been executed Other Professionals It is a good practice to have other professionals or companies aide you in your decision such as surveyors engineers appraisers etc Always make sure the property you are shown and the one you are given legal registration information about are the same Always request a registered plot map plano catastrado We know only of Propstdy for comprehensive property studies in Costa Rica If possible find individuals with a track record Be sure to have references with respect to these professionals Try not to use those proposed by the seller or broker Costs If you use an attorney either because you wanted him to advise you while looking for the property or because the seller selected the notary and you wish to have additional advice he will charge you a fee for his services This fee is in addition to the notarial fees collected upon closing It is best to agree on this fee at the beginning of the attorney client relationship It can be a fixed amount a percentage of the transaction price an hourly fee or a combination of these It is advisable to ask for a quote at the beginning and have your agreement in writing as this will eliminate the possibility of future misunderstandings As stated in addition to legal fees when closing takes place notarial fees must also be paid for the notarization and registration of the closing Notarial fees have a fixed rate established by executive decree As of today for real estate transactions the rate is 1 50 of the first one million colones of the price of the transaction and thereafter an additional 1 25 of the remainder of the agreed price You must also add to that cost a 3 property transfer tax stamp taxes and Registry fees See Exhibit I a total of approximately 5 28 of the price For mortgage costs see Exhibit II The buyer or seller need not have both an attorney and a notary since as previously stated notaries have both titles It is advisable to have both or request additional advice from the same person since notarial work only includes advising on drafting and registration of the final closing deed Having an attorney early in the process will allow you to know what is the real legal status of the property you wish to purchase and have advice available when options or other pre closing legal documents are to be executed In many cases in order to eliminate possible future problems it is also advisable to have additional studies made A common practice which should be avoided is to state a lower purchase price in the closing deed than the true agreed price This is done in order to pay less transfer tax and tax stamps upon closing allowing also for a lower valuation for land tax purposes thereafter This practice aside from being illegal may be considered as tax fraud by the tax authorities hamper the buyers right to claim for damages as well as create problems for the accounting of the transactions in the buyers records If the price stated in the transfer deed is lower than the registered price at the time of presentation to the Registry additional taxes will have to be paid and the notary has the right to collect his fees based on the increased value Declared values in the closing deed are never diminished The Purchase Process Once you have found a property you will want to know its legal status If you already have an attorney he will make a Registry study to determine the status If all is well you can either go ahead with negotiations with the seller and agree on price and closing conditions or take additional steps to assure yourself that the property is what you want Some of these steps may include those necessary to discover other possible nonregistered restrictions and assure yourself that all your needs e g sewer water electricity etc are supplied in the area where you are purchasing for a list see Exhibit III It is advisable not to rely only on the oral statements of the seller or any intermediary You should request written evidence of their statements If you wish you can also obtain an independent appraisal The appraised value is usually only a reference and may not reflect the actual value of the property If an option is to be signed do not offer more money than is strictly necessary Options are usually not registered and if not complied with have to be taken through a lengthy court process to have them honored If you wish to register the option against the property be aware it may be expensive but is the most common way to insure the option will be honored It is prudent to have your own legal counsel available for options and other related pre closing documents It is also an excellent practice to allow yourself and your attorney ample time between the moment you make the decision to purchase and the closing Use this time to check the property thoroughly Always make sure the property you see is the one you are buying Ask for a plot map if one is not available or you have doubts as to its exactness have a new one made If necessary get professional help from a surveyor or property research company Once all matters of concern are agreed in principle you will need a notary or notaries who will study the property in the Registry draft the closing deed and execute it by signing it with the parties All deeds are in Spanish If you do not speak Spanish fluently you have the right to have an interpreter present who can be the same notary and to have the deed reflect the fact that it was translated and explained to you in your native language The notary has the obligation to allow for the interpretation The interpreter will be an additional cost for you and is not included in the notarial fees Upon execution the notary has the obligation to present an original copy of the deed as soon as possible to the Registry so that it is annotated against the property This is very important since if another sale of the same property were to be annotated before yours the first one would have priority and you would find yourself with the only alternative of suing the seller for fraud Once your deed is registered you have the right to obtain proof of registration usually the original copy of the deed testimonio duly registered The registration seals must be visible on the copy they will have the relevant information as to where the transactions are registered Your property will have a folio real number showing you are the owner Anyone can obtain a copy of the folio real at the Registry The folio real is a public record Also available are computerized registry statements which are not legal certificates but show what is registered An independent notary can also certify your property ownership If you are in doubt it is advisable that you make sure registration has taken place If your purchase is not fully registered and is only annotated you most probably will have problems transferring the property afterwards You will have to finalize registration before a new transfer can be registered Property in General Means of Holding Property Property can be owned individually jointly in trust as household property or in the name of corporations or a combination of these It can be owned and held either by one or more individuals or in the name of one or more companies For reasons pertaining to limitation of liabilities and estate planning the most common and advantageous way to own property in Costa Rica is through a corporation Costa Rican corporations can have all issued stock owned by one individual Share sale income if not part of normal business is not taxable There is no capital gains tax in Costa Rica Share sales pay no transfer tax Different Property Rights Property rights differ depending on the kind of title and ownership Our Constitution grants foreigners the same rights as property owners that nationals have with few exceptions one being ownership of beachfront property leases Others are specially titled property with transfer restrictions see Other Encumbrances Origin of Title One can have full property rights or restricted ones Joint property can be physically localized upon the land or be a percentage of all the property Property may also be under condominium ownership In the case of certain beachfront property or other government owned lands it can be held not owned through a concession granted by the government These concessions are sometimes thought to be leases because these holdings are referred to commonly as leases arrendamientos although technically they are not Private property can also be held by lease by usage agreements as a squatter de facto occupant or occupant with permission from owner without rent payment as well as in several other ways Property owned and held in different ways is regulated by different statutes For specifics on these subjects you should refer to competent attorneys Titled and Untitled Property All property registered under the Costa Rican civil law system is titled property Untitled property can not be registered The ownership of untitled property is uncertain It is true that possession is important but not until the property is titled will there be certainty as to the legal ownership of the land Even when possession is apparent it may not be legal possession It is possible to purchase the rights to possess untitled property but this entails a substantial risk since there is no way to know if the seller is the legal owner of such rights and can legally transfer them There is a court proceeding información posesoria which allows in most cases a legal possessor of land who has been either in possession uninterruptedly for ten years or who has acquired the rights to such ten year possession to title and register the land If land has been recently titled there is a special three year period when third parties not involved in the titling process may go into court and assert a claim to a superior right to the property After such period a claim is possible but is more difficult The statute of limitations for such a claim is ten years A word of caution Stay away from untitled property This is one of the areas of real estate transactions where I have seen many problems No matter what you are told there is no sure way to establish legal ownership of untitled land For a secure transaction land must be legally titled and registered in the National Registry Constitutional Protection of Private Property Traditionally Costa Rica has protected private property one of the pillars of its democracy Not even in the worst times of Latin America when the generalized trend was to expropriate the property of foreigners was Costa Rica a part of such practice There have been some expropriations in the past and some have not been paid even today but this is the exception and not the rule With our new Constitutional amendments and the Sala Cuarta it is difficult for such a thing to happen nowadays Article 45 of our Constitution provides for protection to private property No one can be deprived of his property if it is not for a justified public interest legally proven in which case the person must be previously and justly compensated Limitations to property and property rights can only be enacted if the law establishing them is approved by the vote of two thirds of the legislature All other restrictions are unconstitutional and can be taken to Constitutional Court to be declared as such In Costa Rica after a constitutional amendment that took effect in October 1989 it is relatively easy and inexpensive compared to other countries to file a constitutional case and in most cases stop the Government from taking property before just compensation is paid Due to the constitutional procedure now available we can safely say that private property is well protected in Costa Rica Problems arising from expropriations although few in the past are not the general rule Most Common Registered Liens and Encumbrances Liens A Lien is a charge hold claim or encumbrance upon the property of another as security for a debt or charge It is not a title to property but rather a charge upon it the term connotes the right which the law gives to have a debt satisfied out of the property by the sale of the property if necessary There are several different kinds of liens in Costa Rica among them are Consensual Mortgages Bond Mortgages Legal Mortgages Tax Liens Registered Mortgages These will be checked by your lawyer and the notary of the transaction Usually upon your request they will be explained to you as to their cause and effects Mortgages normally are Normal Consensual Mortgage Hipoteca Común This mortgage is a security for a loan If the loan is not paid the property is sold through the court and the amount and costs of execution are paid from the proceeds It can be executed even if it is only annotated against the property it need not be fully registered to have full legal effects Title to this kind of mortgage can be assigned but such transfer will have the same or similar costs as a new mortgage If the amount owed is not fully covered by the proceeds from the sale of the property once the mortgage is executed the creditor can claim from the debtor the unpaid balance of the debt Bond Mortgage Cédula Hipotecaria This kind of mortgage is under a document form The legal owner of such document has the right to collect a certain amount from the debtor and if it is not paid he has the right to auction the property through the court and pay himself with the proceeds It differs from a normal consensual mortgage because the ownership of a bond mortgage can be transferred by simple endorsement of the document of title and it can be used over and over again to secure loans or other transactions without the necessity of registering a mortgage every time a guarantee for a secured transaction is needed Also if the sale proceeds of a bond mortgage are not enough to pay off the secured debt the creditor can not go after the debtor for the unpaid balance A word of caution due to the fact that in past years inflation in Costa Rica has been high and bond mortgages must be registered for a fixed amount having a life of ten years often the property s market value is much greater than the bond mortgage amount Because of this some people may not want to use their bond mortgages as security due to the small amount of the market price of the property that the bond mortgage represents Mortgages Considerations Mortgages may have been agreed to in such a way that some fixtures not normally considered as part of the mortgage are included under the mortgage Since mortgages have to be annotated or registered against the property to affect it these conditions should be found during the title search Goods attached to the soil machinery trailers without their wheels etc are examples of such fixtures Some mortgage agreements restrict certain rights of the owner of the property mostly prohibiting transferring or encumbering the property for a given period For the same reasons stated such limitations or restrictions should be found in a good Registry study Also chattel mortgages can be imposed upon crops or goods found on a property that shows free and clear title in the Registro This is common in coffee farms where the crop the chattel has been mortgaged to the local coffee miller to finance the coffee operation This can also be the case for future crops Such chattel mortgages will not be found registered against the property but may be found in other sections of the National Registry Chattel Mortgage Registry Judgment Liens These liens are annotated upon the property to which they refer They are court ordered when the property is attached or when the right of ownership use or any other rights pertaining to the property are being questioned in court Depending on the kind of court case they refer to they can go from minor matters to a loss of the property Unregistered Mortgages Legal Mortgages or Tax Liens These liens are established by law usually for non payment of national or municipal taxes or transfer taxes If property taxes transfer taxes or other taxes have not been paid in time the property against which those taxes were assessed becomes legal security for payment This is true even when the owner is no longer the same as when the taxes were not paid Under this case we find 1 Road tax Detalle de Caminos Should appear on the municipal certificate showing taxes owed Usually unregistered 2 Transfer tax Impuesto de Traspaso Evident only when a pending transfer is annotated against the property 3 Land tax Impuesto Territorial Usually unregistered Applied on land and constructions on the land as well as other improvements This tax is annual and is an amount equivalent to the registered value multiplied by 0 3 to 1 17 It is paid in quarterly installments 4 University and Charity stamp tax Timbre Universitario y de Beneficiencia Although some properties might still show these pending taxes they are no longer important as they have long since been abrogated and the ten year statute of limitations has gone by in all pending cases 5 Luxury home tax Impuesto a las Construcciones de Lujo Homes of a value higher than an amount stated by the luxury tax law must pay an annual tax Such amount is currently colones 5 000 000 but may vary every year Value excludes land value and only constructions are considered for this tax Currently there are proposals in our legislature to modify these taxes Transfer tax could be diminished to 1 land tax to a rate not yet determined Luxury home tax could be abolished These changes are subject to congressional approval Other Encumbrances An encumbrance is a right to interest in or legal liability upon real property which does not prohibit passing title to the land but which diminishes its value Encumbrances include easements leases privileges restrictions of use homestead privileges etc Annotations Anotaciones An annotation is not an encumbrance by itself but is a sign that something is in the process of being registered against the property Once an annotation is found against the property it should be studied carefully in order to establish the right or rights being registered Easements Servidumbres An easement is a right created by an express or implied agreement of one owner of land to make lawful and beneficial use of the land of another not inconsistent with any other uses already being made of the land Easements should be registered in order to affect third parties i e a buyer Though rare certain properties could have an easement right against them even though it is not registered This may be because another property has acquired the right to such easement through its use over a period of time but the easement has not yet been granted by a court Easements are of different kinds They may be apparent or nonapparent Apparent ones can be seen if you are on the property such as electric lines water canals private roads rights of way windows with rights of air and light etc Non apparent ones are more difficult to see such as underground pipes non apparent rights of way etc Since they are mostly all registered with the exceptions mentioned the effects on the property are easily determined A word of caution In some instances the description of the easement or its conditions are not those in reality being practiced on site Since easements can legally change by practice through time it is wise to make sure that both are the same and that in those cases where they are not a solution to the problem is reached before you purchase Leases Arrendamientos A lease is an agreement by which a property owner or holder turns over use of the property to another usually for a given period of time for consideration commonly called rent In Costa Rica you will find two different kinds of leaseholds One is referred to as urban leasehold contrato de inquilinato and the other as the common leasehold arrendamiento civil Each kind of leasehold has its own law applicable to it In the first case inquilinato the tenant is fully protected by a statute applicable to urban property leased for housing office space industrial or commercial purposes ley de inquilinato Under the Ley de Inquilinato or inquilinato as it is called for short it is almost impossible to evict a tenant Eviction with few exceptions can not take place as long as the tenant pays his rent on time and complies with certain very basic obligations If there is no agreement as to increases in rent in the lease contract increases can only happen every five years with the intervention of a judicial authority if the landlord and the tenant are not able to reach an agreement Exceptions to the eviction rule are a when the owner is going to use the property for his own personal or immediate family use and can prove that neither he nor his family has lived in a house of their own in the near past or b when the building leased is to be rebuilt or refurbished in which case the evicted tenant has a priority to lease in the new building c when tenant does not pay rent Other similarly onerous obligations are imposed by statute on the landlord under this kind of leasehold and can not be contractually waived by the tenant Property rights are limited because of lease contracts and their effects on the property must be well known before a closing is executed These leases need not be registered to affect the property The only way to determine whether they exist is by physically inspecting the property and questioning the person that has possession Currently legislation is being discused to amend this law The second kind of leasehold the civil lease is more of a contractual lease in which the parties agree freely to their contractual obligations They are regulated by the civil code and are very much restricted to what is said in the contract This kind of lease is normally found in farms and other agricultural property not leased for residential industrial or commercial purposes These may also be registered or not Unregistered leases are common in Costa Rica Most leases are not registered against the property A word of caution It is wise to have all tenants evicted before the purchase of the property takes place If not one may find himself in court for a long time without being able to use the purchased property other than leasing it to the tenant already there Water Rights According to the local Water Laws Ley de Aguas all property below other property must give right of way to waters coming from a higher property Also based upon the same law restrictions as to construction lines near water ways rights of way to clean or inspect water ways restrictions as to what can be cut next to waterways etc may be found registered against the property Restrictions Due to Future Roads or Projected Road Expansions Restricciones a la construccion por congelaminetos para caminos Restrictions of this kind may be found registered against the property Most of these restrictions will not be found when the title search is performed since they are not registered To obtain the construction line and other similar types of limitations both the governmental authorities in charge of transport as well as the municipal authorities must be consulted Some of these restrictions may be unconstitutional but until declared as such will remain in force Private Roads converted into Public Roads Caminos Privados convertidos en Públicos According to the Public Roads Law Ley de Caminos Públicos if a private road is left open to public use for more than a year such road is then considered to be a public road and cannot be closed to public use The owner of the land may lose his right to own and use that part of it on which the road stands In our opinion this article of the law is unconstitutional As this guide is being written this issue is before the Constitutional Court and time will let us know if we should worry any further because of this statute In most cases such a circumstance will not be registered against the property Zoning Zonificación Although the current zoning law has been in effect since 1974 it has only begun to be enforced in recent years Zoning restrictions are not registered against the property and must be researched separately A word of caution Pay special attention to zoning Party Walls Medianeras Party walls are those walls where both property owners have a right to a part of the same wall This is more common in old properties If party walls are encountered one should remember that they are subject to certain special legislation found in the Civil Code Condominium property is different from the law of party walls Origin of Title Titles have different origins Some are several hundred years old These titles were granted by the King of Spain and in some cases include beachfront property up to where the water reaches the horse s midriff while in the sea Many titles have been registered by a judicial titling process known as Información Posesoria Through this process the court establishes that a person has exercised possession of a section of land publicly peacefully and as the owner for more than ten consecutive years or has acquired such rights from someone with such possession Also good faith is required bona fide possession This means that the person or persons exercising the possession do not know of any other person with a better right to the section of land in possession It also

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