In Costa Rica
The information provided here is by no means an exhaustive look at land ownership in Costa Rica. It is intended simply to introduce some of the issues you need to be aware of when investing in our lovely country.
Costa Rica's total land area is 51,100 square kilometers. There are still some areas for which no one holds legal title. And yet, the total area of legally titled land in the national registry is over 62,000 square kilometers. Certainly, cases of fraud (such as multiple sales of a single property) account for some of this discrepancy. Another reason is that, until about 25 years ago, a formal survey was not required for the sale or purchase of land, so property that has not changed hands in recent years may not be accurately represented in the Registry.
Another issue is that Costa Rican law favors those who make use of the land; if a piece of property is "abandoned" and consequently occupied or "invaded" by squatters who cultivate the land, then after a period of time, the squatters can file for legal ownership of the property. (They can attain some rights in less than a year, and after five or ten years can own it outright.) An absentee land owner may not even realize that this has happened and, in trying to sell the land, may find out that he/she is no longer the legal owner.
In order to avoid this, absentee owners need to provide for upkeep such as marking and maintaining the boundaries, keeping back the overgrowth in cleared areas, etc. When buying land that the seller has not personally inhabited, it is especially important to verify both the physical and the legal status of the property.
When preparing a survey to submit to the national registry, a surveyor is required to go into the field and physically measure the land and identify the boundaries that define it. If the property (or part of it) is occupied by squatters, or if a boundary encroachment has developed with a neighbor, these issues are discovered at that time.
Costa Rican law also requires that the surveyor be accompanied by someone who is personally familiar with the property and is able to identify its physical location. This may be the prior owner or a caretaker who has provided upkeep. It can also be a farm hand who has worked on the property, or the owner of a neighboring property. This person (or people) must sign the surveyor's protocolo, or official ledger, attesting that the property has been identified to the best of their knowledge.
One potential problem is that some surveyors are willing to draw up a survey on paper, without actually visiting the site. Although it is illegal to do so, it is possible to draw up a survey of what should exist in the field, based on topographical maps, aerial photographs and prior surveys (some of which are extremely informal by today's standards, and may not be accurate themselves). The resulting survey may be accurate, or it may not.
Unfortunately, with the exception of some urban and a very few rural areas, no overall map or mosaic has been created to show the patterns of property ownership in the country. As a result, when a survey is submitted, the National Registry is often unable to check it against the surveys of neighboring properties to rule out overlap or other discrepancies. This means that the existence of a registered survey (known as a plano catastrado) does not guarantee the existence or saleability of a given property. The registered survey must be compared to the legal title (known as the escritura), and to the physical reality as seen by an on-site visit.
Fraudulent intentions and inaccuracies aside, a surveyor who does not visit the site will not be able to report any physical problems with the property: it is already inhabited, the neighbors' fence has been nudged over by a few feet or yards, etc.Red flags
Any of the following situations should be taken as an indication that caution and further investigation is in order:
Obviously, if you have not yet made the purchase, find out as much as you can before making any legal or financial commitments.
First, get in touch with a surveyor who is legally licensed to work in Costa Rica and ask for a field inspection and/or measurements to verify the real area of the land to be purchased.
Likewise, contact a licensed attorney to do a title study to identify any restrictions, liens or rights of way that affect the property.
As the buyer, you have the right to select your own surveyor and attorney, rather than using the seller's contacts. By making your own contacts, the professionals who work with you will have a commitment to providing you with full and accurate information.
Third-party title search, title guarantee and escrow services are also available.
When you have made the decision to purchase, always have a surveyor visit the property and verify the measurements before making a final commitment. In a case we saw recently, the property showed none of the red flags mentioned above. The seller's survey was recent and appeared to have been conducted in a professional, responsible manner. The buyer requested that the property be re-surveyed in order to verify the boundaries and total area before purchase and a mathematical error was discovered. The boundaries were accurately represented on the survey, but the total area was off by about a hectare (about 2.4 acres). Discovering this difference in acreage prevented the buyer from over-paying for the property by half a million dollars.
When buying land in Costa Rica, the most important step you can take is to verify the legal and physical status of the land by physically visiting the property (either in person or by having a surveyor do it on your behalf). Meet with the owners of neighboring properties to verify that the person who is selling is in fact the current owner of the land. A thorough title search should also be conducted in order to to check for any existing liens, and for any discrepancies between the legal title, the registered survey, and the physical reality.
The following links may assist you in researching a potential property investment.
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