Buying Property in Costa Rica: Why the First Step Shouldn’t Be Viewing the Property
Buying Property in Costa Rica: Why the First Step Shouldn’t Be Viewing the Property
Authored by: Bernardo Gómez, Legal Partner | BDO Costa Rica
In Costa Rica, buying real estate may seem straightforward: you find an attractive property, negotiate the price, sign before a notary and register it. However, when it comes to business projects, installations under the Free Trade Zone regime or industrial expansions, the process becomes much more than a transaction; it is a strategic decision. Just like any good decision it has to start with the right information.
The BDO Legal team sees this everyday: companies arriving in the country with enthusiasm and structured plans, but, since they do not conduct a thorough review right from the beginning, end up facing avoidable obstacles. That is why BDO consistently emphasizes that real estate due diligence is the most important step of this entire process. Even though it may sound obvious, it is not always carried out this way.
This analysis does more than just confirm whether the seller is the rightful owner of the property, or whether it is free of mortages. It goes much further because it entails understanding whether the zoning allows the intended activity of the project. This analysis also verifies whether there are mandatory setbacks, if the land is subject to environmental restrictions, if the water availability is guaranteed, or if there are easements that may limit access to the property. It also involves visiting the municipalities, cross-checking the data with the cadastre, and reviewing approved plans.
There have been cases where multimillion-dollar investments are put on hold, or fall apart entirely, because the property was partially located in a wetland. In other instances, this happened because the only access to the land was a communal easement that could not be expanded. Projects can fall apart because it was not confirmed in time that the local water system did not have the capacity to service a new plant.
A proper due diligence can prevent these unpleasant surprises in most cases, and allow for informed decision-making right from the start.
It is also crucial to think about the structure of the purchase. Will it be carried out under a personal name or a corporation? Will the property be registered under the Free Trade Zone regime? What implications does this have with the Ministry of Foreign Trade (COMEX) and the Trade and Investment Promotion Agency (PROCOMER)? Every legal decision has operational implications that must be aligned from the start.
Without a doubt, everything comes together at the signing: public deed, registration, taxes, stamps, and fees. If you reach that stage without having done the groundwork, the closing may just be the beginning of several headaches to come.
In summary, buying a property is not just about what you see on a map or during a site visit. It is about what you can validate beforehand, what you project into the future, and what you can build on those solid foundations.
At BDO Legal we are passionate about guiding our clients through their property acquisitions right from the start, since that is when the project truly begins.