Friday, September 21, 2007
Owning As A Foreigner
Costa Rica listings- Great local realtor company
| By Bernal Navarro | |
| Bernal Navarro is a partner at the law firm André Tinoco Abogados. Born in San José, Mr Navarro has a PhD in Administrative Law from the Universidad Complutense de Madrid. He can be contacted at bnavarro@andretinoco.com | |
Costa Rica ranks in fourth the world level as an ideal environment for foreign investment, because there are very few restrictions on foreigners owning land.
Foreigners enjoy the same rights as Costa Ricans and do not require any special conditions to purchase property within the country. The only exception is the so-called terrestrial maritime zone.
There are some restrictions for land use, and that’s the reason why we recommend each property must be carefully researched, to determine whether the location, ground conditions, ecological problems, etc, are appropriate for the use you require.
Advice from professionals on these subjects is a must, experts such as engineers, real estate brokers, and different governmental entities, depending on the location and use. Those include the Ministry of Agriculture (MAG), the National Institute of Housing and Development (INVU), the Ministry of Health, the Ministry of Energy and Environment (MINAE), the Ministry of Housing and Human Resources, the National Water and Sewage Authority (AyA), the Ministry of Public Works and Transportation (MOPT), and the corresponding municipality.
Likewise, it is important to know if there are declared zones such as “reserve” (forestry, ecology, etc), which impose restrictions on the land use. For example there are water reserve zones where only ten per cent of the land can be used for construction or “Agricultural Vocation”, where it is prohibited to construct buildings and yet others of the forestry reserve which limits cutting of trees.
Present before a notary public legal identification documents, which include a Cedula Identification card for Costa Ricans and Passport or Proof of Residency card for foreigners. In the case of corporations, the company identification and the authorized legal representative holding a current (30 days) Personería Jurídica.
You will need municipality clearances according to the location of the property.
These typically include documentation that shows the owner has paid municipal and property taxes, and proof there are no other debts within the municipality.
An updated survey of the property is required and documentation from the public registry showing it is free of liens and encumbrances.
If one of the parties is not present, he or she can give authority to another so they can be represented before the notary public. The special and general authorities are signed before a notary public or before a Costa Rican Consul, if it is outside the country, and it should be in the record book.
The “special authorities” are not registered in the Mercantile Registry, because they are granted for a specific use which expires when a certain condition is met-i.e. the sale or purchase of property.
Ninety per cent of the properties in Costa Rica are registered in the “Public Property Registry”.
These registrations are made by a notary public. The system is fully computerized and indexed with 80 per cent of the properties identified by a title registration number known as the Folio Real.
These can be searched from any place via the Internet: www.registronacional.go.cr
The registry report provides detailed information on a particular property including the name of the title holder, the boundary lines of the property, liens, annotations, declared value of the property and other recorded documents which affect title. The Public Registry can issue certificates of title or provide a registry report on a particular property.
The folio real is the “number of the property”, it should be placed before the number of the province in which it is found at the end a hyphen identifies a sub registration which can be three zeros (001,002,003 etc) indicating the number of people with rights to the property.
A right of way is the right of a party to pass over a property. These rights of way can be for air, water and much more. Nevertheless, it is important to note that when a property shows a right of way, it may not be valid any longer, , which is shown as a “transferred right of way”. The main property and all the sub divided lots will appear with the same note, but in reality it has no effect on them. It is prudent to have a professional review the property before making any buying decision.
Another important document we should get is the “Survey”, which can be obtained in the same building as the “Public Registry”, in the “National Survey” section. The Survey map will indicate the exact location of the boundaries of the property.
It is possible that sometimes important differences can be found between the “Survey” and the “Registry Report”. This is because the property is recorded in the Registry by a notary and this represents true right of possession. With regards to the survey, an owner may make modifications to the property, then forget to update it in the registry thereby creating the difference.
