Top 5 Legal Mistakes Foreign Buyers Make in Costa Rica (and How to Avoid Them)

Meta Description:Before you buy property in Costa Rica, learn the most common legal mistakes foreign buyers make - from unclear titles to concession land - and how to avoid them with proper due diligence in 2025.

Introduction

Buying property in Costa Rica is one of the smartest lifestyle and investment decisions many foreigners ever make. But as with any international purchase, the country’s legal and regulatory system has nuances that can be confusing for first-time buyers.

While Costa Rica welcomes foreign ownership and provides strong property protections, many buyers still stumble over preventable legal mistakes. These errors can cause financial loss, delays, or even voided ownership.

Here are the five most common legal pitfalls and how to steer clear of them — straight from the experience of attorneys and brokers who’ve guided hundreds of international buyers.

1. Skipping the Title Search

The most serious mistake is buying property without a formal title verification at the National Registry (Registro Nacional).

Every property in Costa Rica has a unique title number (known as a Folio Real), which contains vital details such as ownership history, liens, mortgages, boundaries, and easements. Some properties - especially rural land or older beachfront holdings - may have incomplete or unclear records.

Why it matters: If you buy a property without confirming clean title, you risk inheriting the seller’s debts or discovering later that the land legally belongs to someone else.

How to avoid it: Hire a licensed real estate attorney to conduct a title search directly through the National Registry. Never rely solely on the seller’s word or a real estate agent’s summary. A written legal report should confirm:

• The registered owner matches the seller’s ID or corporation.

• There are no liens, annotations, or pending legal claims.

• The title boundaries match the property survey (plano catastrado).

  
  

2. Confusing Concession Land with Titled Land

Costa Rica’s Maritime Zone Law governs the first 200 meters of land from the high tide mark along all coastlines. The first 50 meters are public land and cannot be owned or developed. The next 150 meters are concession land, meaning they are leased from the local municipality - not owned outright.

Why it matters: Foreigners who are not legal residents cannot hold majority ownership of a concession. Yet many buyers are unaware they are purchasing concession property rather than fully titled land.

How to avoid it: Ask your attorney to verify whether the property is titled or concession. If it’s concession land, request copies of the municipal concession agreement, zoning plans, and proof of valid lease payments. If you’re not a resident, ensure the ownership structure complies with residency restrictions before signing.

3. Buying Without an Independent Attorney

Developers and sellers often recommend their own attorneys to “simplify” the process. While this might seem convenient, it can lead to conflicts of interest if the same attorney represents both parties.

Why it matters: An attorney’s duty is to their client. If that client is the developer or seller, you cannot expect neutral legal advice - especially if issues arise later.

How to avoid it: Always retain your own independent bilingual attorney who specializes in real estate law. Confirm they are a licensed notary registered with the Colegio de Abogados de Costa Rica. Your attorney should oversee all due diligence, contract review, and closing documentation independently.

4. Not Using Escrow for Payments

In Costa Rica, every legitimate real estate transaction should use a regulated escrow account. Escrow ensures that funds are held securely by a neutral third party and only released when all legal and contractual conditions are met.

Why it matters:Paying directly to a seller or developer without escrow is risky. If the seller fails to deliver clear title or abandons the project, recovering your funds can be extremely difficult.

How to avoid it:Use only licensed escrow companies authorized by SUGEF, Costa Rica’s financial regulator. All deposits - from earnest money to full payment - should go through that channel. Request proof of regulation and a written escrow agreement outlining release conditions.

5. Overlooking Zoning, Water Rights, and Building Permits

Even after confirming clean title, some buyers forget that not all properties can be developed freely. Zoning plans (plan regulador), environmental regulations, and water access rights can limit what you can build or operate on the land.

Why it matters:You might purchase what appears to be a perfect ocean-view lot, only to learn it’s zoned agricultural or conservation - making residential construction impossible. Similarly, building permits cannot be issued without verified legal water access.

How to avoid it:Your attorney should review:

• The zoning certificate from the local municipality.

• The property’s water source permit (AyA or ASADA letter).

• Any environmental impact or building restrictions from MINAE or SETENA.

If you’re buying in a development, confirm that the master permits are already approved, not merely “in process.”

Bonus: Failing to Plan for Ownership and Inheritance

Many foreign buyers purchase property in their personal name without considering succession planning or asset protection. This can complicate future transfers or inheritance.

To streamline estate planning and reduce potential tax exposure, most investors purchase through a Costa Rican corporation (S.A. or SRL) or create a trust structure.

Discuss these options with your attorney early in the process to avoid restructuring later.

Quick Recap: The Smart Buyer’s Checklist

Before signing any property deal in Costa Rica, make sure you can check off all of the following:

•  Clean title verified at the National Registry

•  Titled, not concession, land (unless you’re a resident and fully informed)

•  Independent attorney representing you only

•  All funds handled through licensed escrow

•  Water rights and zoning approvals confirmed

•  Ownership structure optimized for your long-term plans

  
  

If you can’t confidently tick every box, pause the transaction until your attorney provides documentation.

Final Thoughts

Costa Rica’s legal system protects foreign buyers extremely well - when used correctly. Most property issues arise not because the law is unclear, but because buyers cut corners or trust unverified information.

By hiring qualified professionals, insisting on transparent documentation, and understanding your legal responsibilities, you’ll ensure that your purchase process is safe, compliant, and stress-free.

With proper guidance, Costa Rica remains one of the most secure and transparent places in Latin America to own property.

Want help finding the best property deals? 

Contact me directly for personalized listings, video walkthroughs, or a free consultation.

sabina@palmrealetsatecr.com| WhatsApp Me +506 8713 8080 | Based in Guanacaste, CR