10 things you should know when buying Tamarindo Real Estate
Pt. 1: Costa Rica Legal System
Buying any type of real estate is often a thrilling and nerve-wracking proposition. For most people, it is one of the larger investments they will make. Buying real estate in a tropical foreign destination is even more thrilling and nerve-wracking. It is more thrilling because Costa Rica is such a fun and magical place to spend time. You are buying something you know you are going to enjoy, and your smart investment feels like a well-deserved gift. On the other hand, the insecurities inherent in making a large investment are exacerbated for many by the legal, language and cultural differences from their home country.
In this ten-part series, we will cover topics that will help you understand the process of buying Tamarindo real estate. We will start the series with an overview of the Costa Rican legal system.
Costa Rica uses a Civil Law system of governance. Civil law is based on Roman law and its primary attribute is the primacy of statutes and codes as binding law. It is also known as Continental Law as the majority of nations in Europe follow this system. In comparison, the U.S. and England use a Common Law system of governance where both codes and case law (court decisions) have binding precedence. You don’t need to learn the Civil Law system in order to purchase property in Costa Rica. However, understanding that Costa Rica uses a different legal system is the first step in becoming comfortable in the property buying process. We will concentrate on the differences that are apparent when buying property.
The first distinction is that Costa Rica has two classes of lawyers. There are abogados and notarios. The former are litigators. They can represent you in court. They can also authenticate a signature that is signed in their presence. The latter are abogados that have completed an advanced degree in notary and registry law. Notarios have public faith and are allowed to make personal and real property transfers. Notarios can do everything an abogado can do, plus they can also do the things that require the public registry: marry and divorce people, transfer property, etc. To recap, all Notarios are abogados, but not all abogados are notarios.
When you purchase property in Costa Rica, you will first sign some form of purchase contract. Either a contract of sale (contrato de compra-venta) or, if one of the parties needs more time to close, a reciprocal promise to buy and sell (promesa reciproca de compra-venta). Whichever form is used, this document lays out the parties’ agreement. Once signed, your notario will draft an escritura de traspaso, which is the document that transfers the title into your name. The notario will present the escritura de traspaso to the public registry within thirty days. Once presented to the registry, the registry will record the transfer to the new owner.
The custom in Costa Rican real estate transactions is that a buyer paying cash may choose the notario to do the transfer. If the seller is providing financing for the majority of the purchase price, then the seller chooses the notario. If the seller is providing 50% or less of the financing, then the custom is for the buyer to choose the notario to complete the transfer and the seller to choose the notario to draft and record the hipoteca (mortgage document).
Notarios have public faith in Costa Rica. This means they have an obligation to be impartial in their transferring of property and recording of documents. Nevertheless, the notario is not responsible for finding you an appropriate property for your needs or ensuring that you get a great deal. That is the work of your realtor, who we will discuss in the next installment of this series.
You now have a basic outline of how property transfers are completed in Costa Rica and the vocabulary that goes along with it. Your notario should be able to answer any specific questions you have in regards to purchasing Tamarindo real estate. Knowing a little bit about the process is sure to make your buying experience less stressful.
PPV Tamarindo Real Estate is an Eco-conscious, residential Ocean View community located on Costa Rica’s beautiful Pacific Coast. Our development offers more luxury than you would ever expect at an affordable price. Our development is close to beautiful beaches; offers Ocean View Condos; lots offering panoramic Ocean views; and affordable tropical residential lots.