Costa Rica Property Ownership Rights
Property Ownership Overview
Besides a few exceptions, Costa Rica has excellent ownership rights as in most cases foreigners enjoy the same property ownership rights as nationals do.
Ownership limitations regarding Ocean Front Property:
1. Fifty-Meter Coastal Zone
The first 50 meters from high tide at the beach is public property (Zona Publica). No permanent structure may be placed on this land, however it can be landscaped and temporary structures can be erected, for example in front of a hotel.
2. Municipal lease land - 150-meter zone
In the majority of the country, the next 150 meters from the 50-meter zone is owned by the municipality, and can only be leased. About 85% of Costa Rica's Coastline is until the 200 meter hightide line is not titled land - instead a concession from the government (for the right of use)
The law states that no private individual or corporations is allowed to build on or use for private purposes “any portion whatsoever”of the Public Zone. However, it’s possible to obtain a lease/concession on the Restricted Zone properties for private or business use. Understand when this happens, it isn’t a deed; it’s a “lease concession.” At first the lease is with the local municipality; later on, after a procedure, the lease is with the Costa Rica Tourism Institute. Beneficiaries of lease concessions are granted the use, occupation, and possession of the land, including the right to build.
more detailed information on coastal "concession" properties
Note This: According to law “No lease concessions are granted to non-Costa Ricans who have resided in the country less than five years, nor to foreign companies, nor to national companies with excess of 50% foreign owner ship.” Ironically the majority of the desirable Zona Restringida properties are held by Costa Rican corporations which are entirely owned by foreigners. This is, of course difficult to verify because ownership of a Costa Rican corporation is impossible to substantiate. It is therefore advisable to use a good lawyer that aids you to set up a company that will serve the investor's purpose, and meet the law. A foreigner cannot lease this land personally. There may be restrictions or zoning on the leased land. Ensure you have a lawyer check this before buying the rights to leased land. Leases (Concessions) are usually inexpensive, and the renewal fairly automatic provided the lessor keeps the lease in good standing.
These lease concessions can be transferred from one person or company to another, subject to the approval of the municipality is entitled to charge a small leasing fee. At the end of the leasing period, the lessee can apply for an extension of the lease concession, and extensions are normally granted with the previous approval of the Tourism Institute
The Golden Exceptions
3. Titled Beachfront property
Beach front land not regulated by this law can be found but represents less than 15% of the total coastal land mass of Costa Rica. Which the Surrounding Area of Flamingo has the highest concentration of the so called "Prime Land" meaning it is titled to the 50 meter high tide line.
Some beach front land isn’t regulated, because it was in use before the beach laws were passed. These exempt parcels are so-called “grandfathered” properties. However, be cautious; many people think that their property is grandfathered when it really is not. Be aware of claims of properties being grandfathered as often they are not
Land ownership to properties within 2 km of national borders is limited to citizens of Costa Rica
Not favorable are, Deposits,Options and contracts
Deposits are not common in Costa Rica, as there are few trust accounts. When a deposit is given to a lawyer or realtor, the money usually goes into his or her personal account. If the completion of the property purchase is to be on an agreed date in the future, an option can be taken which gives the vendor a sum of money for which he guarantees a right to purchase for a certain period of time. The Canada Costa Rica Trust Company Limited in Casa Canada will hold funds in a trust account for a real estate, business or other purchase.
Option and contracts to sell properties are legal, but cannot be registered at the Registry of Properties as a real right affecting a property. It is, therefore, possible that even if you have an option, a disreputable person could sell the land to someone else, leaving only the courts as recourse to recover the deposit.
Because trust and escrow accounts are rather difficult to find a lot of transactions are handled via personal accounts. In which lays one of the highest risks regarding property ownership transfers. Understand the Purchasing Process, Ensure clear title, do your due diligence on your lawyer, in Costa Rica it is very important to have a good lawyer that is honorable and professional. Otherwise Title insurances can be used to ensure the proper title transfer during the closing process.