by Ivo Henfling
GoDutch Realty’s real estate agents all check title before listing a Costa Rica property for sale but we still like to share our knowledge with buyers as well as sellers of Costa Rica real estate. Many of you do not speak Spanish and it is not too easy to know where to get started on a website you are not (yet) familiar with.
Anyone who owns property in Costa Rica should check at least once a month if his/her property is legally in good shape or not. It takes only 10 minutes of your precious time. Put it on your agenda, so you won't forget and read this blog so you can learn how to pull a title search online.
Costa Rica property can be purchased in one person’s name, jointly, or in the name of a corporation or Sociedad Anonima. It is very common in Costa Rica for individuals to put property in the name of a corporation in which they own all the shares, although since 2012 you have to pay corporation taxes if you own a corporation.
You should discuss this asset protection with your tax accountant and real estate attorney so that you will be informed of the tax implications and other issues before you purchase Costa Rica real estate or make an investment.
Costa Rican law requires that all documents relating to an interest and/or title to real property be registered in the property section of the National Registry (Article 460 of the Civil Code). Most Costa Rica real estate has a titled registration number known as the Folio Real, and the property records database can be searched with this number, by name index or ID number. Properties located in the Maritime Zone function differently. When you go to the National Registry website, you’ll find what is in the image below. Click on where the red arrow shows.
That will take you to the next screen, where you click on “Bienes Inmuebles” which means real estate.
That will take you to the next screen where you need to click on what you want to do next
Here you have several options. You might not be able to find your property by one search or by the other, that's why you are given several options. If you do NOT find your property, it doesn't mean it doesn't exist, you just might be giving the system the data in a different way than the registrar gave it. You will be mainly interested in the following ways of doing your title search:
First, use the scroll down meny to choose the Province where your property is located, the property number (finca) then you type in the property number as you have it in the deed. If your property is duplicate, you need to fill it out. If you don't know what that means, don't fill it out. If you property is a condominium, you need to put "Horizontal" as F and if you property is the mother farm of a condo you fill out M. If you have a signle family property, don't fill out anything. If you share ownership (derechos) fill out 001 - 002 etc. and if it's only you or your corporation, fill out nothing. Fill out the Captcha - they are impossible to read and you can click for a new one untill you drop dead - make sure you use the two words with the space in between - and click "Consult".
Choose Personal Name (nombre fisico) or Corporate name (nombre juridico) by using the scroll down menu to the correct one. Fill out names as below, name, first family name and second family name. If you have only one family name, try all the options using any of your first names as a first family name and your second family name as you correct family name. If you choose the corporate option, the screen will change.
If the owner is a corporation, do NOT type in SA or S.A. or Sociedad Anonima, just use the name as is. You might have trouble with the correctness of the name because the registrars in the Register do not bother checking if there are any typos. Therefore I find it easier to search by cedula number or property number. In both cases, fill out Captcha and hit "Consultar".
Choose the type of ID by using the scroll down menu. There are several options. Use the option of the document that you used when you bought the property. Passport numbers probably change in your home country but not in Costa Rica, therefore you need to make sure you use the old passport number. fill out Captcha and hit "Consultar".
The registry report (informe registral) provides detailed information on the property, I’ll show you as an example my condo in Sonesta One Jaco and detail on the image what each part of the report means.
I have deleted some of the numbers, for obvious reasons. The report gives you the title number, the location, the name of the owner (individual or corporate), boundary lines, tax appraisal, liens, mortgages, recorded easements, and other recorded instruments that would affect title. Since Costa Rica follows the doctrine of first in time, first in right, recorded instruments regarding land for sale presented to the National Registry are given priority according to the date and time in which they are recorded.
For purpose of the transfer of Costa Rica real estate this means that any mortgages or liens which are not recorded at the time that title is transferred are invalid. Since the certificate of title issued by the National Registry is prima facie evidence of the condition of title on the date issued, any instrument not recorded at the time the certificate is issued is invalid. This eliminates the need for title insurance since any instrument omitted from the report is deemed invalid, to my opinion.
In this case, this condo in Jaco has a suit pending or lis pendens. The term “lis pendens” is Latin for “suit pending.” A lis pendens is filed against a real property to indicate that the title of property is in question, or that some sort of lawsuit involving the property could occur in the near future. When someone files such a notice, it serves as a public notification that the property is involved in a lawsuit.
Obviously, every situation differs and in some cases a review of the National Registry record will not be enough to uncover all encumbrances. That is why it is important that the buyer have her or his own attorney conduct an independent title search and investigation rather than rely on the seller's attorney. A good and responsible closing attorney will pull a title search on the day of the real estate closing. A GoDutch Realty agent is ahead of the game and will pull the title search when he/she lists the property. Contact a GoDutch Realty agent right now.
Some buyers feel more comfortable purchasing title insurance, in which case the title company will take care of the search and insure the title or not. In case you are looking to take title insurance, many of the attorneys we recommend on our website are star attorneys for a title company, so you can do your Costa Rica property purchase and everything else all in one office with your trusted closing attorney.