Buying property in Costa Rica step by step

1. Define your brief and overall budget

Distinguish between owner-occupation, a combination of personal use and letting, and a purely income-generating investment. Each scenario carries different requirements for location, management, liquidity, and documentation. Before selecting a property, you require a budget that encompasses ancillary costs, repairs or furnishing, and a contingency reserve for operating without revenue.

Clarify your time horizon as well. An off-plan apartment with stage payments during construction presents a different risk profile from a completed house handed over upon conveyance. A higher expected yield never justifies skipping title verification or disbursement conditions.

2. Before you sign an offer or reservation

Request identification of the property and the seller, basic registry documentation, a draft purchase agreement, and a breakdown of the price. For a development project, additionally request the construction phase, precise scope of delivery, and legal identification of the unit. The word 'reservation' says nothing about whether a binding commitment arises or whether the deposit is refundable.

An independent lawyer should review the document in its entirety prior to signing: deadlines, conditions precedent, responsibility for documentation, governing law, and dispute resolution. A written offer can have legal effect; it is not automatically a non-binding enquiry.

3. Agree on measurable due diligence

The due diligence period must allow sufficient time to obtain actual source documentation, not merely review photographs. Agree on when it commences, what occurs in the event of late document delivery, and which defects the seller must remedy.

• Legal title, mortgages, encumbrances, the seller's authority, and pending registrations.
• Boundaries, physical condition of the property, permits, and any discrepancies from approved plans.
• Water, access, electricity connection, and uso de suelo for the intended purpose.
• Condominium rules, budget, and any outstanding debts of the unit towards the administration.
• For construction, contractual milestones, infrastructure completion, and conveyance conditions.

4. Set up escrow and bank transfer controls

The selection of the escrow provider, the escrow agreement, and disbursement conditions form an independent part of the due diligence. Establish who holds the funds, under what instructions they release them, and how disputes are resolved. There is no universal rule that every escrow waits for final registration.

Verify banking details via an independent channel, particularly if a change was received by email. Anticipate source-of-funds checks and allow for the fact that an international transfer may take time. Do not remit the full purchase price before contractual conditions are satisfied simply because the signing date is approaching.

5. Prepare closing tailored to the specific transaction

The notary prepares the public deed (escritura pública) and submits it to the Registro Nacional. Prior to signing, it must be clear how mortgages, arrears, transfer costs, common fees, and handover will be settled. The buyer should also understand who selected the notary and the scope of their role compared to their own legal counsel.

For an encumbered property, part of the price may be applied to redeem the creditor's claim; this sequence belongs in the payment instructions. For an off-plan unit, it is crucial whether the individual unit can actually be conveyed at closing.

6. Monitor registration and physical handover

Request proof of filing and subsequently an extract demonstrating final registration. If the registry returns the document for correction, track who cures the defects and how this affects funds held in escrow. Mere confirmation that a document 'has been submitted' is not the same as completed registration.

The handover protocol should record the condition of the property, inventory, keys, utility meters, identified defects, and necessary administrative access. Arrange the transfer of utilities, insurance, accounting, and emergency contacts. Income-generating operations commence only once these practical steps are resolved.

Three questions that expose a weak contract

• Under what precisely documented conditions will my deposit be returned?
• What must be satisfied prior to each individual disbursement?
• Who remedies an issue with a permit, encumbrance, or registration, and by when?