A guide to buying a home in Nosara
Since Nosara began making to appear on the tourism radar in the early 1970’s, the number of people who have fallen in love with the area and made the snap decision that they’d like to invest has grown by the year. Buying a property, whether at home or abroad represents one of the biggest decisions the average person will ever make. While the majority of Nosara investors experience a smooth, trouble free buying process there’s also been plenty of horror stories where unwitting real investors have been badly burned, and in some cases lost their entire investment. In a market where the number of self proclaimed real estate ‘professionals’ is increasing at an alarming rate, it is crucial that you choose one who truly has your best interests at heart. Luckily, this situation has improved over the years. However, it remains essential that anyone who decides to buy property understands the potential pitfalls and the correct processes for investing here.
So, we’ve put together the following informative guide as a means to inform potential buyers as to how to invest in a way that will ensure a stress free, safe, secure transaction.
Step One: Hire the right real estate agent
When it comes to buying land in Costa Rica, unless you’re a seasoned veteran, then having the right real estate agent in your corner will be essential to negotiate the pitfalls and hurdles of a land purchase in Nosara.
Step Two: Find a lawyer
In Costa Rica there seems to be a lawyer around every corner so finding one isn’t who says they can handle your purchase isn’t difficult. However, finding one who can actually do what they claim they can may be a little tougher. If you choose to find a lawyer independently be sure to ask around and look for the following characteristics:
Are they notaries? Your property will need to be registered with the Costa Rican National Registry. To do this a notary will require the services of a notary. Although a lawyer (particularly a property lawyer) may also be a qualified notary this is not always the case so it is important to check beforehand.
Are they Bilingual? This ones a no-brainer. Luckily, Costa Rica is one of the most highly educated countries in the Americas and the English skills of most natives, particularly professionals is excellent. Remember, any contract will ultimately be in Spanish. Unless you speak Spanish perfectly, a bilingual lawyer capable of word perfect contract translations is essential.
Word of mouth: Speak to those you trust with a track record of purchasing property in Costa Rica. If they recommend someone, ask that lawyer to produce testimonials or contact details for previous clients they have worked with.
Step Three: Form a corporation
When buying property in Costa Rica, it’s highly recommended that the purchase is made in a corporation’s name. In addition to simplifying the entire process, it will ensure lower capital gains tax and pave the way for increased flexibility in future transactions ranging from buying a vehicle to opening a business. Although forming a corporation may sound complicated, it’s actually a simple, straightforward process. The basics of setting up a corporation are:
-Decide on an original name
-Select a board of directors (president, secretary and treasurer). The initial incorporators may occupy these positions.
-Decide how the capital profits of the corporation will be divided among the incorporators.
Step Four: Due diligence
If by this time you have the services of a good lawyer then the following steps can be handled by them.
-Title search: Each property is given a ‘folio real’ number. This number is specific to one property and is an essential requirement in ascertaining whether the property is debt free, has no liens against it, and is not subject to dispute.
-Plano: This is the land survey document. The details contained therein must match those on the title search. If they don’t then run for the hills.
-Suelo: Building a structure on your land requires a ‘use of land’ (suelo) letter from the local municipality that provides specific legal permission to build.
-The fine print: Check whether the land or property comes with basic utilities such as electricity, telephone and access to water.
Step Five: Make an offer
Submit an offer taking into account the items present on your last visit to the property. This will ensure that any verbal agreements concerning exactly what is included are adhered to. Often an offer may be written up with a minimal ‘good faith’ deposit that may be raised to 10% within a month. The offer must be submitted on a genuine Costa Rican legal document.
Step Six: Stock checking
Make sure the legal purchase details includes the following:
-A due diligence schedule including provisions regarding what happens if the property fails the due diligence. Lay out clearly the due diligence period and provisions if it fails to pass.
-A detailed schedule of all closing costs.
-Full names of buyer and seller.
-Terms and conditions of sale.
-Legal description of the property.
-Full payment schedule including amounts to be credited and withdrawn from the escrow accounts on the agreed dates.
Step Seven: Close the deal
-Prior to closing:
The seller must produce receipts detailing payment of any fees attached to the property, including, but not limited to:
Receipts showing that utilities have been paid.
Any applicable fees such as condominium or HOA.
If everything is running smoothly then the deal closure should proceed something like this:
The signing of the legally drafted Transfer Deed takes place.
Buyer makes payment as per the agreement of purchase.
In order to update the property tax record, the buyer’s attorney must advise the Municipal Government of the transfer.
You’re almost home. Although the property is now yours, in order to have it fully signed, sealed and delivered don’t don’t forget to square away the following:
Buyer’s attorney records the Transfer Deed in the public registry.
When registered, official ownership documents are delivered to the buyer.
Buyer informs the municipal government of the property transfer so that they may update the municipal property tax record.
Step Eight: Congratulations, and welcome home… Pura Vida!!!!
If you are not a Costa Rican citizen or resident, banks in Costa Rica will not allow you to open a bank account until you are. Meanwhile, if you are buying a property, escrow is a perfect way to transfer your money to Costa Rica to make your real estate transaction possible.
Things to Remember
The Law of the Land
Although the Nosara real estate landscapes lack of official zoning plans has caused problems for real estate buyers in the past, nowadays, experienced real estate agents know enough to recognize any warning signs before they present a problem. These include construction regulations, residential permits and more.
The Lay of the Land
One thing to investigate before you sign anything is the topography of the land you intend to buy. Things to be on the lookout for include soil erosion and potential drainage issues. Do you intend to build on a sloped lot, and if so will you build at the top or the bottom? If in doubt hire a topographer.
Are power and water available at the property’s roadside, and if not is the necessary infrastructure in place to deliver these? As Nosara grows water supply issues become of increasing concern. To receive a building permit from the municipality you will need an official document from your local ASADA (water co-op) that your property is eligible to be connected to the town’s water mains. It’s essential to receive confirmation that this is possible before you sign anything.
In the past situations have occurred in which individuals have bought land and built the home of their dreams, complete with sweeping panoramic views of Playa Guiones, only to discover in due course that their neighbors have every legal right to build a property in front and obscure these views. Before you sign anything instruct your lawyer to produce a “view easement” to ensure this won’t be a problem.
Due to land disputes that date back to the eighties, there are certain sections of land in Playa Guiones where the titles are disputed by one or more parties. Although this issue remains isolated to a small, select number of properties it has proven disastrous for certain buyers who mistakenly believed their ownership of this land was free and clear. Make sure your attorney conducts a thorough title check before purchasing any piece of land in Nosara.
Ensure that the property dimensions on the registered survey map correlate precisely with the property map filed with the national registry. If in doubt, hire an independent surveyor, particularly for large properties which have not been measured for many years.
Squatters rights in Costa Rica are a complex area, and one in which a number of property investors have been burnt over in the past. Squatters have been known to enter land parcels which appear abandoned. Once they have settled, removing them can become a legal nightmare which is best avoided by taking the necessary steps when required. To avoid this issue it’s best to maintain the property, erect fences, and pay your property taxes.
After purchasing the property make sure your heirs and your attorney have both hard copies and digital copies of the following documents.
• The property deed
• Official title search
• Survey map
• Your will and testament
• The power of attorney document
• The corporation papers which your property is registered under
• The passport or residency papers used during the property purchase
Do you any more tips for making the process of buying a house in Nosara the best experience?