III. Protecting The Real Estate Investment:

One of the greatest concerns of foreigners purchasing real estate in a foreign country is to ensure that the transaction will be executed legally and that the system can ensure a lifetime of enjoyment of the property. The Costa Rican legal system, if followed correctly, does give ample protection to investors, but if the transaction is not executed properly, loss can and does occur. To guarantee the security of any real estate investment, there are three things that should be present in any real estate transaction.

a. Adequate legal representation and experienced Notary – While a notary’s primary duty is to provide Public Faith to a transaction, his/her job is also to act as the legal representative of the buyer, providing legal advice and representation throughout the process.  

b. Escrow – Most buyers from the US understand Escrow service to include not only the managing of funds for a property purchase, but all of the administrative work required to execute a closing. In fact, in states where an attorney is not required for a real estate purchase, the escrow agent becomes the central party responsible for ensuring that all documentation is in order before the close. In Costa Rica, the escrow agent performs many of the same duties. The primary function is as a financial service to prevent manipulation or mishandling of funds prior to closing. The escrow agent is a neutral third party responsible for issuing checks and executing payments. This system provides confidence and security to all interested parties (e.g. attorneys, brokers, seller, buyer) that funds are protected during the buying process and that all funds will be disbursed appropriately to all parties at closing.

c. Title Guaranty: Why a Title Guaranty?

When you decide to buy a property, you must be certain that after the sale has been completed you will be the true owner of the property. You need to be confident that no liens, encumbrances or other impediments will prevent your free use and enjoyment of the property.

Guaranty For The Property Owner

The same way you purchase life insurance to protect your interests, a Title Guaranty should be purchased to protect your property title interests. Your real estate investment will probably be the biggest investment you will ever make and loss of this investment can be financially devastating. You need to be certain that you are financially protected from potential losses.

What Does A Title Guaranty Provide?

  • Protection against monetary losses, brought about by hidden ownership claims that may be made against the property title;

  • Payment of legal expenses if the company must defend your property title against a claim covered by the Title Guaranty in the local courts;

  • Payment of valid claims against your property title, up to the amount of the Title Guaranty.

Some Of The Risks Covered By A Title Guaranty

  • Invalid documents executed under expired or non- existent power

  • False assumption of identity of legitimate property owner

  • Falsification of documents, legal power, and other papers related to the transfer of property title.

  • Liens or other financial burdens charged to the previous property owner.

  • Non-registered property easements

  • Hidden heirs of previous property owners

  • Documents executed by minors of age

  • Invalid Documents delivered after death of previous owner

Peace Of Mind

Once acquired, a Title Guaranty remains in place as long as you own the property, giving you a lifetime of security and peace of mind backed not by a promise but by a company with financial stability. Because only one payment is required, a Title Guaranty is a cost-effective method of protecting your real estate investment and enhancing the value of your property.


The real estate buying process in Costa Rica need not be intimidating or confusing. By understanding the steps in the process and the pitfalls to avoid, a buyer can confidently invest in and enjoy their property for years to come.

We are willing to help you with these steps and get the contacts for!

Written by 

Ivan Madrigal #exitosoivan #ticomagnate ..is a costarican, meaning that I live in Costa Rica. Graduated as an industrial engineer and later worked for my father businesses before having the great opportunity to have a small internship in England, at the company Vinten Broadcast that manufactures equipment for the broadcasting industry. After that I decided to learn another language and tried French. However the unstable labor market here forced me to try other career paths like sales and marketing, which I now self-study or implement. Also developed more experience in Customer Service at several Call centers like at IBM Business Transformation, working as Payroll manager for a company that downsized me, named Dana Corporation... later at Fujitsu, where its big account BellSouth, moved to other country.. and finally Hewlett Packard within their biggest account: Pfizer. Because I didn't want to miss my experience at UK dealing with broadcasting, I studied this career at INA which graduates high level technicians for Central America. Nevertheless, I am trying to make multinational companies recognize my degrees, and get in a position were I can be more productive and creative. But the truth, the best way to show my potential is by owning my business and create presence by networking with people. That´s why I am here, because I need to move on, leave my country for many years, and challenge my skills using new languages that I can learn gradually. There seems to be many obstacles for me to achieve this, but I will deal with this using time management and other tools. I wonder, when will be the time when I recover completly from my motorcycle accident and win the trial, before walking normally with a cane and finally dance... dance with the wolves. The wolves that are in MySpace and Facebook, for example, where I am profiled.