ILN: BUYING AND SELLING REAL ESTATE - AN INTERNATIONAL GUIDE

[BUYING AND SELLING REAL ESTATE IN COSTA RICA]

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KEY FACTS OF REAL ESTATE ACQUISITIONS UNDER COSTA RICAN LAW

General Real estate law in Costa Rica is governed by the principles established in the Costa Rican Civil Code for acquiring, selling and in any way disposing of property. The official registration of real property is made through a registry system, which is administered by the Real Property Registry of the Costa Rican National Registry. This system consists of a registration deed system, which provides for the public registration of instruments affecting land. Non-Resident Ownership Property ownership in Costa Rica is an individual right legally protected by our Constitution, which states that no person can be deprived of his or her property unless it is for a necessary public use, in which case it will be compensated. The constitution grants the same rights to foreign citizens. A person or legal person that has acquired property can dispose of it in any way by selling, renting, encumbering, mortgaging, or using it for any desired purpose, as long as it is in accordance with the law and the regulations for land use. All physical or legal persons, whether Costa Rican nationals or foreigners, may purchase, sell, own and in any way dispose of property that belongs to them. Land Use Planning Local governments known as Municipalities, govern the use of land in the towns, cities, and rural areas of their jurisdiction. These entities levy and collect real estate ownership taxes, and they pass bylaws and legislation to determine the use that will be allowed for private and public properties. As a consequence, local governments can regulate matters such as the type of construction that can be built, its height, density, and other building requirements. They also issue building and remodeling permits, requiring that interested

parties wishing to carry out any type of construction comply with the established regulations, including zoning laws. Some Municipalities, due to lack of funding, have not been able to legislate on subjects such as land use planning and building requirements. In such cases, the Costa Rican Construction Code and the regulations issued by the National Institute of Housing and Urban Planning will govern construction. Most Municipalities that do have regulations on building and construction abide by the standards and regulations contained in the Costa Rican Construction Code, but specific laws, such as those passed by the Municipalities will prevail over general legislation such as the

Construction Code. Title Registration

As it was stated above, title registration in Costa Rica is based on a Registry System. This system applies to the entire territory of Costa Rica and therefore all properties must be registered in it. The Real Property Registry contains the registration of all real estate properties and those liens or encumbrances that affect them, such as easements, mortgage liens, encumbrances, and any other sort of limitation on property rights. In order for a property to be sold, it must be duly registered in the Costa Rican Public Registry and possess a registered land map that describes it. Transfers of property as well as the registration of all kinds of deeds relating to real property must be carried out through a Public Notary, who will draft the deed for the desired property transaction, which will require that all interested parties participate in the granting of the deed. Once the deed has been prepared, reviewed, and signed, the Notary will pay all the required duties and taxes and will submit it to the Real Property Registry, in order to have it registered.

ILN Real Estate Group – Buying and Selling Real Estate Series

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