Costa Rica real estate. What is the bundle of ownership rights?
Buying land in Costa Rica is a sound investment. Our country has no army, very nice people, and beautiful landscapes. We have a very secure legal system and Costa Rica is the oldest democracy in Central America. The right of ownership is guaranteed by the Costa Rican Constitution and secured by property laws. The first thing to do when you want to buy land in Costa Rica, is to perform due diligence. I have covered all of the steps you must take to own land in Costa Rica, on this website. So, when the estate property is transferred to your name, what are your land rights as a property owner? How do the laws of Costa Rica protect you as an owner? Did you know that the right of ownership (or dominium) comprises several individual property rights?
The bundle of property rights that protect your land in Costa Rica:
The right of ownership comprises several individual rights, which we call the “bundle of real estate rights.” So when you buy land for sale in Costa Rica, a home, property, or land in Costa Rica, your homeownership is composed of several individual rights, which are protected by law. These property rights are:
- The right of possession.
- Of use and enjoyment (usufruct).
- The right of transformation and disposition.
- Of defense and exclusion.
- And the right of restitution and indemnification.
What is the right of possession of land in Costa Rica?
The right of possession is the aptitude a person has to have a thing or asset under his will and power. It´s perfectly possible to own land but not have it under your possession. For example, when you rent your house to a third party. In this case, the tenant has a right to possess it for the duration of the rent agreement.
What is the right of use and enjoyment, or "usufruct"?
The right of usufruct, is in itself comprised of several land rights: of use and enjoyment, and to perceive it´s fruits. Use and enjoyment is very straightforward: you can use and enjoy the property and live on it. The right to perceive “fruits”, can be understood as:
- The right to perceive the ones produced by the land, as well as its agricultural proceeds and animals.
- Your right to perceive the “industrial fruits”, which are the ones that are perceived by work and cultivation.
- The right to perceive the “civil fruits”, which is the interest of money, and the monthly rent of land, housing, and building leases.
Like the right of possession, the “usufruct” may be given to a third person. The usufruct must be registered as an encumbrance on the property at the Public Registry by a notary public. It can be given for the remainder of the beneficiary´s lifetime, making this figure important for estate planning: the owner can transfer the property to the heir but keep the lifelong usufruct over it. Homeownership in the Public Registry is transferred to the heir, but the Usufruct is kept. You can even buy the right of usufruct, for a determined period of time, instead of purchasing the land for sale in Costa Rica.
What is the right of transformation and disposition?
The right of transformation is the power the owner has to modify, alter and even destroy his property. The right of disposition, gives the property owner, the right to dispose of it. You can dispose of it by a sale, a donation, or transfer it to a third party by any other means that are legally possible, per Costa Rican laws. It also gives the owner, the right to mortgage it, and place easements on it.
What is the property right of exclusion and defense? What is the right of restitution and indemnification?
The right of exclusion gives the property owner, the right to enjoy what he owns, over other people. As a derivative of this right, the owner can request his neighbors to proceed with the boundary demarcation between properties. It also gives you the right to place walls and fences around the perimeter of your property.
The right of defense gives you the right to repel acts that threaten your possession. It gives you the right to claim all of the bundle of real estate rights over the property via legal proceedings when these rights have been violated. Depending on the case, you can proceed with criminal action, in case of property fraud, or civil actions through injunctions when possession is compromised. If the property has been usurped or taken from you, the right of defense and restitution gives you the right to have your property restituted to you.
Sometimes, it´s best to proceed with a criminal action. In other cases, the way is through a civil action. In all cases, you have the right to indemnify, which is the right to request civil damages. All in all, there are many rights, you should be aware of, if you own land, own a home, or have the right of possession. These are things to keep in mind when you buy land for sale in Costa Rica.
Dr. Christopher Pirie Gil.