Real Estate Fraud in Costa Rica ☎️ Protect your property.
Buying property in Costa Rica can be a rewarding investment, but it also carries legal risks if not carefully managed after closing. One of the most critical issues for foreign and absentee owners is real estate fraud, especially land title fraud involving forged documents or impersonation. Title theft is an issue in Costa Rica, especially with foreigners who don´t live here. Scams can occur anywhere, but in certain instances in Costa Rica, fraudulent signatures have been used to transfer properties. In a small percentage of cases, notary publics acted criminally as part of a scam in real estate fraud. In other cases, the scammers deceive the notary by impersonating the owner, providing them with fake identification. This page explains the main types of property scams, how to respond, and how to protect your property title in Costa Rica through practical and legal tools.
Real estate fraud is something to be aware of. Sometimes, the properties are transferred repeatedly, ending up in the name of innocent persons. These individuals acquired the real estate property in good faith, based on the Registry’s information. They acted in good faith because they were unaware of the property fraud. However, it is essential to note that property title theft is not a specific issue in Costa Rica. Property fraud can occur in any country, as criminal activity is a global issue. Nevertheless, you can take steps to protect your investment.
Why does this happen? How can I be safe when I buy land in Costa Rica?
Real estate fraud often involves transferring property or using it as collateral without the owner’s consent. In many cases, the scam begins when a criminal impersonates the rightful owner using falsified identification documents. These are presented to a notary public, who may be deceived — or in rare cases, may be complicit — in preparing a false escritura pública (deed of transfer).
The forged document is filed at the Public Registry, resulting in a fraudulent transfer of ownership or the recording of a mortgage on the property. When this happens, they take an additional step: the criminals usually transfer the property to individuals who have no involvement in the scheme. These people acquire the property in “good faith.” In other instances, the defrauders mortgage the property with a bank or a third party. When the actual owner checks the Registry, he finds that his land has been sold and even has a mortgage on it. We will cover what you should do if you find yourself in this situation. I will also give you some tips to prevent this from ever happening.
How to Protect Your Property Title in Costa Rica
There are several legal and practical tools to help you prevent title theft and detect fraud before litigation becomes inevitable:
1. Hire an indepedent attorney for due diligence and closings:
When buying property in Costa Rica, it’s essential to hire a reputable real estate agency and, more importantly, an independent and trusted attorney to perform legal due diligence and oversee the closing process. Realtors often suggest a lawyer “they work with,” but this can create a conflict of interest. As an independent attorney, my duty is to protect your interests exclusively. Visit my due diligence page to understand what a proper title review and initial research should include.
2. Request Registry Alerts ("Alerta Registral"):
Costa Rica’s Public Registry offers a free alert service that notifies property owners by email whenever someone files a document that affects their property.
You receive the alert within 24 hours
It allows you to act before registration is finalized
The alert does not block the transaction, but gives you time to intervene legally
You can enroll at the official Registro Nacional website or request that we handle the setup and monitoring for you
3. Conduct Regular Title Reviews:
Performing annual checks at the Public Registry helps confirm that:
The property remains under your name (or your corporation’s)
No unauthorized annotations or liens have been registered
Our law firm can provide a post-sale due diligence report to validate ownership and detect early signs of property fraud in Costa Rica.
4. Keep the social documentation with you if you purchase real estate property through a Corporation.
If a company were created to own your property, you should take extra steps of caution. Having the company´s books and shares in a secure location is the right thing to do. The most important books are the Book of Shareholders and the Book of Acts. You must also ensure that you, or your loved ones, are the only people with powers of attorney on the board of directors.
5. Create a Mortgage Bond (Cédula Hipotecaria)
Once the notary public registers your property to your name, you should have a clear title. To keep your property safe, I recommend constituting a mortgage bond. A mortgage bond is a title that gives the bearer the right to encumber the property for the specified amount. This is a physical title that you can keep in your safe, and the important thing is that the property gets encumbered with the mortgage. You can execute the mortgage bond if any fraudulent activity happens and the property is illegally transferred. The only person who can execute the mortgage bond is the bearer, in this case, yourself.
To be clear, the bearer must have the physical mortgage title to execute. The same is true to cancel the mortgage encumbrance on the property: the physical title must be presented to the Registry to do this, and it´s later incinerated. The downside is that you can´t lose the document, or the encumbrance won´t be lifted, nor will you be able to execute. Trust me; you want to keep the title in a safe place! The idea is to create a mortgage bond for the actual property price. So if it´s fraudulently transferred, it will return to you. All you need to do is execute. Constituting a mortgage bond is a great idea after you acquire the property; it acts as a type of “insurance.”
6. Schedule Site Inspections:
f you live abroad or visit infrequently, your property is more vulnerable to:
Squatting
Unpermitted construction
Boundary encroachment
We coordinate legal site inspections to detect unauthorized activity and ensure that the land remains secure. These actions can also support your legal position in court, should land title fraud occur.
A criminal action is what you should file in case of real estate title fraud.
If you discover that your property was transferred without your consent through fraudulent means, you must immediately come to Costa Rica and file a criminal action. You have just become a victim of real estate title fraud. The criminal action begins with a complaint filed at the State Attorney´s Office, the “Ministerio Público.” Penal Jurisprudence does not protect third-party individuals who acquire the property in “good faith.” So if the property was transferred illegally, and even if third parties are involved in good faith, or if it was mortgaged to an innocent third party, the criminal action will reverse everything back to you in a clean slate. After all, these acts are null and void since you didn´t consent to them. You must also consider that there is a statute of limitations: ten years after the fact. After ten years, your right crumbles against the passing of time.
Never file a civil action in case of property title theft
You should never file a civil action to restitute a property in case of title theft. A criminal action is the only way to be successful in asset recovery. This is because civil jurisprudence is opposite to criminal jurisprudence. Contrary to the penal courts´ position, civil jurisprudence protects people that have acted in good faith. So even though you didn´t consent, if the property was later transferred to an innocent third party, who acted in good faith under the publicity of the Public Registry, that third party is protected by the civil courts. This means you won´t get the property back. So be sure to file your claim through a criminal action.
Dr. Christopher Pirie Gil.