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.

Sections:

• What are some of the complexities of land ownership in Costa Rica?
• What does a survey mean, and where does it come from?
• Red flags
• What should I do if I suspect the validity of an investment?
• How do I avoid these problems?

What are some of the complexities of land ownership in Costa Rica?

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.

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What does a survey mean, and where does it come from?

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.

In one case we have seen firsthand, surveys were prepared for a series of neighboring properties by a surveyor who did not travel to the site. These surveys were used to sell plots of land to foreigners who built homes on their land and lived there for several years.

Aware that their surveys did not seem to reflect the physical boundaries that they knew knew defined their property, some of the owners asked us to re-survey the land, even though it was not changing hands. Permanent boundaries such as roads and streams were surveyed and rendered to correct the--sometimes extreme--inaccuracies in the registered surveys. Boundaries that existed only conceptually were recreated to reflect the existing surveys as closely as possible.

The measurements taken in the field demonstrated the true shape of each property. Some were only slightly different from what their surveys showed, while the shape of at least one was so different as to be unrecognizable. The area of each property was also different than what was officially recorded and, of course, what was paid for at the time of purchase. Some were larger, some smaller. The one that had changed most drastically turned out to have just half the area reported on the earlier survey.

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.

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Any of the following situations should be taken as an indication that caution and further investigation is in order:

• In our experience, long straight-line boundaries (for example, of 300m or more) are very rare in rural areas. Property lines are almost invariably defined on the basis of roads or natural features such as streams, mountain ridges, etc. The reason for this becomes obvious when you consider the topography of Costa Rica, which is very hilly and makes straight-line boundaries impractical to establish or maintain. A boundary such as this may indicate a survey prepared on paper, or one conducted in the field with drastically insufficient attention to detail. We have seen extreme cases of as much as two kilometers (over a mile), which is practially impossible in physical reality.


• Old surveys (more than 20 years) date back to the time when agronomic engineers, civil engineers, or surveyors' assistants to present surveys. These surveys were generally very informal and/or imprecise and, although legally registered, should not be considered reliable for modern-day transactions.


• If you are aware that the surveyor who signed the survey did not do the fieldwork him/herself.


• A seller who seems to be in a hurry to push the sale through and urges you not to bother with field visits and other due diligence.


• When the legal title shows a significantly different total area than the registered survey.


• We have seen several cases of foreigners who have purchased property in Costa Rica on the basis of photographs and other documentation (often provided online). Although the seller has legal title and a registered survey, the seller is unable to put the buyers in contact with anyone in Costa Rica who is familiar with the property and can attest to its location. Since this is a legal requirement, the surveyor is unable to create a survey for the individual parcel(s) purchased, and the buyer is unable even to find the property - if it in fact exists - much less make use of it. Furthermore, if a buyer were able to locate the property, it could well be inhabited by squatters who have acquired legal title to it.

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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.

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How do I avoid these problems?

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.

• Property Rights and Foreign Investment in Costa Rica
  http://sanjose.usembassy.gov/proprigh.html

  This is a report prepared in English by an intern at the US Embassy in 1995 and updated by Embassy personnel in 1998. It provides an introduction to some of the issues surrounding property ownership by non-Costa Ricans.



• National Registry of Costa Rica
  http://196.40.22.13/

  This government site is entirely in Spanish. It offers the public a means of consulting the government's databases of registered property and can provide a starting point if you are looking at a specific proprty and want to verify the information you have recieved.



• Colegio Federado de Ingenieros y de Arquitectos de Costa Rica
  http://www.cfia.or.cr/

  This is the official organization of Engineers and Architects of Costa Rica, including surveyors (see below).



• Colegio de Ingenieros Topógrafos
  http://www.colegiotopografoscr.com/principal.htm

  This is the professional organization for all licensed land surveyors in Costa Rica.



• Costa Rica Real Estate Brokers Board
  http://mls-cr.com/


• Colegio de Abogados de Costa Rica
  http://www.abogados.or.cr/

  This is the professional organization for all licensed attorneys in Costa Rica.

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