Titled property vs. concession: the difference

What titled property means

Titled ownership is a freehold property right recorded in the Registro Nacional. It does not automatically guarantee the absence of liens, planning restrictions, or third-party rights. The registry extract and documentation must clarify not only legal ownership, but also what the owner is entitled to transfer and subject to which encumbrances.

Investors should clarify whether they are acquiring the land or unit directly, or purchasing shares in the holding company that owns it. Acquiring a company may entail assuming liabilities not reflected on the property's registry extract.

How the law defines the coastal zone

Law No. 6043 generally governs a 200-metre belt measured from the ordinary high-tide line. The first 50 metres constitute the public zone, and the adjoining 150 metres form the restricted zone. Concessions may be granted within this restricted zone, subject to statutory conditions.

This is a statutory definition, not an instruction to measure distances on an online map. Statutory exemptions and special zoning regimes exist. The boundaries and legal status of a specific parcel must be verified by a specialist using municipal records, registry entries, and documentation from relevant authorities.

What a buyer acquires through a concession

A concession entitles the holder to a specific use of the land for an agreed duration and under the conditions of the concession deed. The law establishes a term between 5 and 20 years; any renewal is not equivalent to indefinite ownership. The transaction economics include the canon, or concession user fee, alongside compliance with other obligations.

A transfer or change of concessionaire is not merely a private contract between buyer and seller. One must verify the requisite statutory approvals, the eligibility of the incoming holder, and whether the intended use complies with the applicable regulatory plan and the concession terms.

Foreign ownership restrictions cannot be bypassed with a company name

Article 47 of Law No. 6043 imposes restrictions on foreign natural and legal persons, including foreign nationals lacking the required term of residency and certain companies with foreign shareholding. It is therefore insufficient to assume that a Costa Rican company 'solves everything'. Legal counsel must examine the specific structure and ultimate beneficial owners.

Relying on a nominee local partner without genuine control on the part of the buyer introduces substantial risk: corporate governance disputes, inheritance issues, voting rights, and shareholder deadlock. Investors must understand the precise rights they are securing, rather than merely who executes the contract.

Impact on valuation and resale

There is no basis for the general assumption that every concession is cheaper or that all concessions offer identical liquidity. However, valuation heavily depends on the remaining term, renewal prospects, transfer approval requirements, the pool of eligible buyers, and permitted land use.

When comparing two opportunities, evaluate future fees and the time required for closing alongside the purchase price. Financing and exit strategies should be based on actual bank underwriting criteria and the specific terms of the concession, rather than the assumption that a future disposal will mirror that of a titled property.

Documents for concession due diligence

• The complete concession deed, registry records, and precise parcel identification.
• Expiry date, renewal conditions, and proof of paid canon fees.
• Applicable regulatory plan, permitted uses, and status of building permits.
• Prescribed transfer procedure and the eligibility of the prospective holder.
• Pending administrative proceedings, compliance breaches, and municipal liabilities.

When to postpone a decision

A critical red flag is an offer of 'direct beachfront ownership' where the vendor cannot substantiate the title type, or a concession nearing expiry marketed as a perpetual right. Withhold payment if a transfer is conditional on future regulatory approval yet the contract fails to address potential refusal. A prime location does not offset legal uncertainty.