Costa Rica due diligence. ☎️ Essential to buy property.
Foreign buyers must take careful steps to ensure a secure land acquisition in Costa Rica. Our due diligence services verify that the asset is free from legal and technical issues. This process includes title verification, zoning review, and confirmation that there are no impediments or restrictions affecting the parcel. If all conditions are met, the transaction can move forward.
Once the due diligence process confirms everything is in order, the transaction may proceed. For a full overview of the acquisition and closing process, we recommend reviewing our real estate legal guide. Our firm ensures each step complies with Costa Rican law and helps clients avoid future litigation and other legal disputes.
Due diligence in Costa Rica:
In Costa Rica, all titled land is registered in the Public Registry. This record shows the legal owner, historical transfers, current encumbrances, registered boundaries, and cadastral data. It serves as the foundation for verifying legal ownership and identifying any limitations affecting the asset.
Our due diligence service includes a detailed legal report with exhibits and a recommendation on whether to proceed with the transaction. This step is especially important for foreign buyers unfamiliar with Costa Rican regulations. We can provide you with these legal services, in any of the provinces of Costa Rica: San José, Alajuela, Cartago, Heredia, Guanacaste, Puntarenas, and Limón.
Legal Due Diligence in Costa Rica
Legal due diligence involves verifying that the asset can be lawfully transferred. This begins by identifying the registered owner through the Public Registry. The title may be held by a physical person, a corporation, or in trust. Confirming ownership structure is a necessary first step before any transfer. Foreign buyers should always engage an experienced notary-attorney to guide this process.
We also examine the property’s chain of title to ensure there are no irregularities or recent transfers that may indicate fraud. Verifying that all prior ownership changes were lawful helps prevent future litigation and protects against title theft. This step is especially relevant when the current owner acquired the asset recently.
Is it in the name of a person, or a corporation?
The Public Registry confirms whether the title is held by a physical person or a corporation in Costa Rica. If it is an individual, the record includes their full name, ID number, purchase date, and the reference to the deed used for acquisition. This foundational information is necessary to verify ownership before proceeding.
Corporate due diligence:
It is common for land to be held by a corporation. In such cases, the Public Registry identifies the entity and its legal status. We review the corporation’s bylaws and articles of incorporation to ensure it is authorized to sell and that its internal governance permits the transfer.
We also examine corporate representation. This includes verifying the current board of directors, identifying who holds legal authority to sign, and confirming that the shareholders have properly approved the sale. The corporate legal books are reviewed to confirm ownership and compliance with corporate formalities.
Does the owner have the full bundle of property rights?
It’s essential to confirm whether the seller has full and undisputed property ownership. This includes identifying any co-ownership, third-party claims, usufructs, or joint tenancy arrangements that may limit the transfer of title.
Second step: legal due diligence on the property itself.
Does the property have title restrictions or easements?
After confirming ownership, we examine title restrictions and easements. The National Registry reveals boundaries, area, and whether easements—such as rights of way or water access—affect the land. It’s crucial to identify their type, scope, and duration. A key point is whether the land borders a public road, which is often preferable to access via a private easement.
Are there encumbrances on the property?
The due diligence process includes identifying any encumbrances recorded in the National Registry. These may include mortgages, liens, judicial annotations, or seizure orders. If present, they may significantly affect the advisability of proceeding with the purchase.
Taxes, and municipal due diligence:
It´s vital to ascertain if the property is up to date with property taxes. Municipal due diligence includes verifying that all taxes are current. Every property in Costa Rica is subject to a 0.25% annual tax based on its registered municipal value. We obtain a certification from the local government confirming there is no outstanding tax debt—essential to ensure buyers don’t inherit liabilities from previous owners.
For high-value residences, we also review potential exposure to Costa Rica’s luxury home tax. These financial obligations must be evaluated before moving forward.
HOA and Condominium due diligence:
When purchasing within a condominium, we confirm that all HOA fees are current. These obligations are attached to the unit, not the individual owner, and unpaid dues may transfer to the buyer. We also review the condominium’s bylaws to evaluate any restrictions—particularly for short-term rentals like Airbnb.
Utilities due diligence and payment compliance:
Verifying utility access is essential to ensure a property is suitable for occupancy or development. As part of our due diligence process, we obtain the necessary certificates from utility providers:
Electricity: Service is confirmed with a certification from the relevant provider — either ICE (Instituto Costarricense de Electricidad) or CNFL (Compañía Nacional de Fuerza y Luz), depending on the location.
Water: There are three legal sources of water service:
AyA (Acueductos y Alcantarillados): The national water utility.
ASADAS: Community-managed water boards supervised by AyA.
Registered water wells: Supervised by the Dirección de Agua under MINAE. Wells must be registered to obtain building permits.
Sewer/Septic: If the property is in a serviced area, we confirm its connection to the public sewer system. Otherwise, we evaluate the presence and compliance of septic systems, especially for rural or coastal properties.
Internet and Telecommunications: Availability of fiber-optic or broadband service is sometimes critical for buyers, especially for remote work or tourism purposes. We assess whether providers like Kolbi, Tigo, Liberty, or Claro serve the area.
All certifications are reviewed to ensure the property is not in arrears with service providers. Based on the findings, we provide a clear legal recommendation on whether to proceed with the transaction.
What is technical due diligence?
We strongly recommend taking the additional step of technical due diligence. This process involves licensed professionals, such as a topographer or engineer, to assess the land’s physical and regulatory characteristics. For clients planning to develop the land, it is essential to confirm whether appropriate zoning permissions exist and whether the site is suitable for construction. Below are key components typically included in a technical due diligence review:
Topographic Due Diligence in Costa Rica:
When purchasing land in Costa Rica, it is crucial to confirm that the lot you were shown is the one you are actually acquiring. This is where topographic due diligence becomes essential. Each property has a cadastral plan filed in the Public Registry, but only an in situ inspection by a licensed topographer can verify that the registered coordinates match the physical land.
The topographer will also check for boundary overlaps with neighboring parcels, confirm the exact location and size, and identify any squatters or occupants. These steps ensure the property aligns with what was offered and help prevent future disputes.
Municipal zoning and Due Diligence in Costa Rica.
Zoning regulations are a critical part of any due diligence process. Before purchasing land in Costa Rica, it is essential to understand what the local zoning laws allow. Some areas are zoned exclusively for agricultural, commercial, residential, or mixed-use development, and these designations will directly impact what you can legally build or use the property for.
To determine this, we request a “Uso de Suelo” (land use certificate) from the local Municipality. This document clarifies whether you can build a home, develop a commercial project, or if the land is restricted to conservation or agricultural use.
For investors or buyers of high-end land, especially in coastal or high-value areas, zoning clarity is essential to avoid legal obstacles and protect your investment.
Hydrological due diligence:
Costa Rica experiences heavy rainfall for much of the year, making hydrological analysis an important part of due diligence—especially for land intended for development. A certified hydrological study can determine if the property is at risk of flooding, water accumulation, or poor drainage.
This step helps prevent future construction issues, protects your investment, and may be required to obtain building permits in certain cantons. For residential and commercial projects, confirming that the land is suitable for safe development year-round is not just recommended—it’s essential.
Forestry regulations:
Costa Rica places a strong emphasis on environmental protection, and forestry regulations can directly affect your ability to develop land. If your property includes significant tree coverage or protected species, permits may be required before clearing or altering the terrain.
As part of our due diligence, we determine whether the property falls under forestry restrictions regulated by MINAE (Ministry of Environment and Energy) or SINAC (National System of Conservation Areas). In cases where the proposed development may impact the environment, an additional review by SETENA (National Environmental Technical Secretariat) may be necessary to obtain environmental viability.
Understanding whether environmental permits or evaluations are required helps you avoid costly legal or permitting setbacks down the road.
Conclusion: Why Due Diligence in Costa Rica Matters
Whether you are purchasing a private residence, investment property, or raw land in Costa Rica, proper due diligence is essential. Our legal team performs both legal and technical reviews to ensure the property is suitable, free of encumbrances, and compliant with regulatory requirements.
From verifying title and zoning permissions to confirming utilities and environmental regulations, our job is to protect your investment. If any legal or technical issue is uncovered, we will provide a written legal opinion and advise whether to proceed with the purchase.
Once due diligence is complete, the next step is preparing your real estate agreement in Costa Rica. Our legal team will guide you through the contract and registration process.
Dr. Christopher Pirie Gil.