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Hidden Dangers Of Investing In Costa Rica Real Estate
US foreign investors are often attracted to Costa Rica, but need to beware because although Costa Rica is a democracy, the way it executes its laws is very different than the US court of law and the United States cannot offer very much protection to citizens who decide to invest in land in Costa Rica. If you decide you want to invest anyhow, there are
One of the main problems that results from investing in real estate is that if a foreign investor is not knowledgeable in how real estate sales are processed in Costa Rica it becomes very easy for them to be the victim of a scam. There are extensive amounts of paperwork that need to be filled out correctly because a simple misstep can result in a foreign investor completing a sale but not really having the rights to the land according to Costa Rican law. Unlike the US, a property deed does not mean much as far as proving who owns land and real estate once it is purchased. Therefore, when completing a sale be very careful that the every piece of the sale is documented with a trained attorney watching over the sale every step of the way. Every record needs to be changed to reflect your name as the property owner and there are two very important records that need to be altered to be in your name, the public registry and the catastro map which documents the specifics of the land. It is also important to make sure there are no liens on the land you are buying (unpaid taxes) or you could end up paying a lot more than you planned.
One of the bright sides about deciding to invest in land in Costa Rico is that gaining temporary residency is fairly easy. Most foreign investors apply for one of two types of residency, either as a retiree or a citizen with a guaranteed income that ranges from 600 for the formal and 1000 for the latter a month. You also must agree to exchange that rate into the Costa Rican currency known as colones and agree to spend 4-to 6 months living as a physical resident in Costa Rica. Becoming a resident is probably the easiest part of the whole investment process.
The other two pesky problems with owning real estate in Costa Rico is squatters and the expropriation. Expropriation is a far less likely problem to have to deal with as the government does not frequently force people off their land for the sake of preserving nature and/or building reserves. However, squatters are a whole issue upon themselves. After purchasing land you have three months to find any squatters on your land and legally have them removed. Although it is suppose to be as simple as having the cops remove a squatter, the cops rarely do their jobs in these regards as they are suppose. After three months have passed, if a squatter maintains they have been living off "uncultivated" or undeveloped parts of your land, they can take you to court to try to win your land from you in what is known as squatter's rights.
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