When acquiring land in Costa Rica, a document memorializing the agreement must be signed by both the buyer and seller. Typically, this document is known as .
When acquiring land in Costa Rica, a document memorializing the agreement must be signed by both the buyer and seller. Typically, this document is known as a Purchase and Sale Agreement but sometimes it is called an Option Contract. The document should set out in detail the relative rights and obligations of the parties and any conditions required to be completed prior to the closing of the bargain. In Costa Rica, most buyers and sellers use corporate entitles to hold title and convey land.
Parties to an agreement should always consult an attorney to insure that the strictest standards are adhered to in order to protect their investments. Many contracts prepared by non attorneys are lacking the essential elements required by Costa Rican law to be enforceable. Some of the essential elements include: the full legal names of the parties or their corporate counterparts, the price (including escrow funds and incremental payment schedules, if any), the closing date, default provisions, designation of the Registered Escrow Agent and Conciliation or Arbitration Agreements. Other specifications that are unique to the particular transaction should likewise be documented in the Purchase and Sale Agreement.
Sometimes, when a transaction is based on “pre-construction prices”, care should be given by a purchaser to have the agreement reviewed by a competent attorney prior to signing. These types of sales carry the additional risk of the project not being completed on time or at all. Customized default/delay provisions are needed to protect the buyer. Further, Costa Rica, like other countries that adhere to the rule of law, requires permits for water, electricity, construction and other usual governmental regulatory requirements concerning the environment.
As our local Realtors are ethical and honest, they too believe that real estate transactions should be reviewed by attorneys to make sure that all the proper, relevant and necessary provisions are included to protect all parties. Title insurance is recommended. The title to the real estate should always be recorded in the Costa Rican National Registry by a licensed Public Notary.
Costa Ricans are sincere in their efforts to preserve the pristine beauty and the unique quality of life enjoyed by all who come to this wonderful land.