Due Diligence Checklist for Costa Rica Property Purchases

Due diligence is the single most important step in any Costa Rica real estate transaction. Unlike some countries where title insurance is standard and government registries are fully digitized, Costa Rica’s legal system requires hands-on verification by a qualified attorney. Skipping or rushing due diligence is the most common cause of costly disputes for foreign buyers.

This checklist covers every area your legal team should investigate before you commit to closing.

Why Due Diligence Matters Here

Costa Rica operates under a civil law system with distinct rules that may surprise buyers from common law countries:

• Title insurance is not standard. While it exists through select providers, most transactions rely on attorney-conducted title searches.
• Squatter rights are legally recognized. Under Costa Rican law, individuals who occupy land openly, peacefully, and continuously for ten years may claim possessory rights. Physical inspection of the property is not optional.
• The National Registry is the definitive source of title, but errors, outdated surveys, and unrecorded agreements can create problems that only thorough investigation reveals.

1. Title Verification

Search the Registro Nacional (National Registry) to confirm:

• The seller is the registered owner of the property (finca).
• The complete chain of title is clean, with no gaps or irregularities.
• There are no liens, mortgages, or encumbrances recorded against the property.
• No annotations (anotaciones) exist that could indicate pending legal disputes, court orders, or third-party claims.
• The property is not subject to any expropriation proceedings.

2. Property Survey (Plano Catastrado)

The plano catastrado is the official registered survey map filed with the Cadastral Registry. Your attorney should verify:

• The survey is registered and current (not expired or superseded).
• The boundaries and area on the survey match the physical property and the National Registry records.
• There are no encroachments from or onto neighboring properties.
• The survey reflects any easements or rights of way that affect the land.

If the existing plano is outdated or questionable, commission a new survey from a licensed topographer before closing.

3. Municipal Compliance

Visit the local municipalidad (municipality) to confirm:

• Property taxes (impuesto de bienes inmuebles) are current, with no outstanding balances.
• All existing structures have valid building permits (permisos de construccion).
• The property complies with local land use and zoning regulations (plan regulador).
• There are no municipal restrictions, demolition orders, or code violations on file.

4. Environmental Review

Costa Rica has robust environmental protections. Your due diligence should include:

• Determining whether the property is near a protected area, wetland, river buffer zone, or biological corridor that triggers environmental restrictions.
• Obtaining a water availability letter from AyA (Acueductos y Alcantarillados) or the local water association (ASADA) confirming water service capacity.
• Checking for forest cover restrictions under the Forestry Law, which prohibits clearing native forest even on private property.
• Identifying whether an environmental impact assessment (EIA) is required for your intended use of the property.

5. Condominium Due Diligence

If the property is within a condominium regime (horizontal property), additional review is needed:

• Obtain and review the HOA financial statements for at least the past two years.
• Check for any special assessments approved or pending.
• Review the bylaws (reglamento) and condominium charter for restrictions on use, rentals, pets, construction, and voting rights.
• Confirm common area maintenance is adequate and no major deferred maintenance issues exist.
• Verify the seller is current on all HOA fees.

6. Corporate Ownership Review

When the property is held in a Sociedad Anonima (S.A.) or S.R.L., verify:

• The corporation is in good standing with the Registro Nacional (active status, annual filings current).
• Review the corporate books (libros legales) including shareholder registry, board minutes, and capital stock records.
• Confirm the person signing has legal authority to sell on behalf of the corporation.
• Check for any corporate debt or tax liabilities that could encumber the shares or assets.

7. Maritime Zone (ZMT) Check

Determine whether any portion of the property falls within the 200-meter Maritime Zone:

• If yes, confirm the concession status and its expiration date.
• Verify the concession has been properly granted by the municipality and is transferable.
• Confirm the buyer qualifies to hold a ZMT concession (residency and nationality requirements apply to foreigners).

8. Seller Verification

• Confirm the seller’s identity through government-issued identification.
• Verify legal capacity to sell (age, mental competency, no court-ordered restrictions).
• If the seller is married under community property (sociedad conyugal), obtain written spousal consent for the sale.
• If the seller is a corporation, verify the authorized representative through corporate records.

9. Water and Utilities

• Obtain a water availability letter confirming the property can be connected to or is served by AyA, an ASADA, or a private water system.
• Confirm electricity service is available through ICE or the local cooperative.
• Verify internet and telecommunications availability if relevant to your use.

10. Access Verification

• Confirm the property has legal road access via a public road or a recorded easement.
• If access depends on an easement (servidumbre), verify it is registered at the National Registry and review its terms.
• Physically inspect the access route to confirm it is passable year-round, especially during the rainy season.

Timeline: The 30-60 Day Due Diligence Period

A well-structured due diligence period typically unfolds as follows:

• Days 1-7: Initiate title search, order updated plano catastrado, request municipal records.
• Days 7-21: Receive and review registry results, conduct physical inspection, obtain environmental and water letters.
• Days 21-45: Resolve any issues identified, request additional documents, review corporate books if applicable.
• Days 45-60: Final review, confirm all conditions are satisfied, proceed to purchase agreement signing.

Red Flags That Should Stop a Transaction

Halt the purchase and seek further counsel if you encounter any of the following:

• Title defects such as gaps in the chain of ownership or unresolved annotations.
• Boundary disputes or surveys that do not match physical occupation.
• Evidence of squatters or unauthorized occupants on the property.
• Unpaid taxes or liens the seller refuses to clear before closing.
• Missing or forged building permits.
• Environmental violations or pending enforcement actions.
• Seller unable or unwilling to provide documentation requested during due diligence.
• Pressure to close quickly and skip due diligence steps.

Any one of these issues can result in significant financial loss or prolonged litigation. Walking away from a problematic deal is always better than inheriting someone else’s legal problems.

Protect Your Investment With Professional Due Diligence

At Funes & Matthys, due diligence is not a formality — it is the foundation of every transaction we handle. Our team conducts comprehensive property investigations covering every item on this checklist and more, giving you the confidence to close your purchase knowing your investment is secure.

Contact Funes & Matthys today to discuss due diligence for your Costa Rica property purchase.