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introduction
property types
buying process
protection
escrow
title insurance
squatters
financing
construction
corporation
residency
conversion chart
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title insurance
(continues from previous page) Since Costa Rica follows the doctrine of first in time, first in right, recorded instruments regarding land for sale presented to the Public Registry are given priority according to the date and time of registration. For purpose of the transfer of 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 registrations issued by the Public 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.
Unlike in the United States or Europe, Costa Rican Law states that once the title is clear and a property is
transferred to a new owner or corporation in Costa Rica, all past claim that were not properly registered in
the National Registry, can not be placed on the new owner/corporation!
Obviously, every situation differs and in some cases a review of the Public 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. Some buyers feel more comfortable though purchasing title insurance, in which case the title guaranty company will take care of the search. Please note that the title insurance costs 1% of the purchase price of a property. That's not all. Total fees for search transfer and closure excluding the insurance itself are in-between 1 and 2 % higher than performed with own notary. |
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