Real Estate Law in Costa Rica: Contracts and Guarantees

Published on March 11, 2026 and written by Cyril Jarnias

Costa Rica, with its breathtaking landscapes and political stability, has become a sought-after destination for real estate investment, attracting numerous international buyers to explore its opportunities. However, navigating the waters of local real estate law requires a meticulous understanding of the contracts and guarantees that govern these transactions.

In this country, real estate agreements are governed by specific rules that protect not only buyers but also sellers, ensuring a transparent and structured market. By delving into the legal and procedural dimensions, this article aims to demystify the crucial elements that form the foundation of real estate exchanges in Costa Rica, offering essential information for any savvy investor.

Real Estate Law in Costa Rica: The Legal Basics to Know

Main laws and regulations governing real estate law in Costa Rica:

• Costa Rican Civil Code: Governs property, acquisition, and sale of real estate.
• General Law on Urban and Suburban Leasing (Law No. 7527): Regulates lease contracts for residential or commercial use.
• Maritime Zone Regulation: The first 200 meters from the shoreline are subject to special restrictions; these lands belong to the State, with possible concessions but never a classic private title.

Property Registration – Key Concepts:

Concept	Explanation
Registro Nacional	Centralized public registry where all titles must be registered to guarantee their validity. All legal information (mortgages, usufructs, easements) is recorded here.
Property Title	Legal document proving registered ownership at the Registro Nacional. Required for any official transaction.
Possession	Physical occupation of a property without an official title recognized by the Registro Nacional; it does not confer a secure legal right nor allow for an official sale.

Types of Properties Recognized by Costa Rican Law:

• Classic private property with a registered title.
• Property held via a commercial corporation (often used by foreigners).
• Concession in the maritime zone (never full private ownership).

Rights and Obligations of Owners and Tenants:

Owners

• Absolute right over their registered property except for regulatory exceptions.
• Obligation to pay the annual municipal property tax (0.25% of declared value).
• Mandatory reassessment every 5 years.

Tenants

• Rights protected via Law No. 7527 for residential/commercial uses.
• Written or verbal contract possible but a written version is highly recommended.

List of legal exclusions concerning leases:

• Hotels
• Hostels
• Leases under 30 days

Maritime Zones: Implications for a Purchase:

Zone	Legal Status	Main Restrictions
First strip – 50 m	Inalienable public domain	No private rights or concessions
Next strip – up to 150 m	Concessionable domain under strict conditions	Temporary renewable concession subject to municipal authorization; prohibition for majority foreign-owned corporations

Legal Procedures for Resolving Real Estate Disputes:

Main Steps

1. Mediation or amicable negotiation encouraged as a first recourse.
2. Filing with the competent civil court if amicable resolution fails; formal procedure requires official documents from the Registro Nacional.
3. Possible appeals to higher courts depending on the severity of the dispute.

Protections Offered to Foreign Buyers:

Essential Principles

Costa Rican law guarantees foreigners exactly the same rights as local nationals regarding the purchase/sale/possession of real estate.

Except in protected or maritime zones.

Practical Tips:

• Purchase recommended via a local commercial corporation to facilitate inheritance/tax transfer.

Contractual Requirements & Mandatory Guarantees in a Costa Rican Real Estate Transaction:

Minimum List:

• Written contract detailing all essential conditions;
• Prior verification of the cadastral plan;
• Mandatory consultation with a local lawyer before signing;
• Systematic registration at the Registro Nacional after signing;
• Explicit inclusion of:
  • Exact description of the property
  • Agreed price
  • Payment/transfer terms
  • Declaration of absence of mortgage/unreported restriction

All these elements must be present in the final contract for it to be legally enforceable.

Real Estate Purchase Contracts in Costa Rica: Key Elements

Main Legal Provisions Governing Real Estate Purchase Contracts in Costa Rica

The real estate purchase contract (purchase agreement or “opción de compra”) is subject to the Costa Rican Civil Code and must be in writing.

It is mandatory to use a Costa Rican public notary for the drafting of the final deed (“escritura pública”), which will be registered at the National Registry.

Property transfer is only effective after the deed is registered at the National Registry.

Main Obligations:

• Seller: guarantee the property is free of debts and mortgages, provide all legal documents (property title, cadastral plans, up-to-date tax certificates).
• Buyer: pay the agreed price, respect the payment schedule, settle acquisition taxes.

Key Steps in the Real Estate Transaction Process

Step	Description
1. Offer and Negotiation	Agreement on price, conditions, and signing of a purchase agreement (“opción de compra”)
2. Due Diligence	Legal, tax, cadastral, and environmental verifications
3. Signing of the Notarized Deed	In the presence of a public notary, drafting and signing of the final deed
4. Payment	Deposit of the balance of the price with the notary or via escrow
5. Registration	Registration of the deed at the National Registry
6. Handover of Keys	Effective transfer of the property to the buyer

Importance of Due Diligence

• Verification of the property title at the National Registry to ensure the absence of mortgage, dispute, or undeclared easement.
• Check of cadastral regularity (plans and areas).
• Verification of the absence of tax debts (property tax, luxury home tax).
• Review of building permits and compliance with local regulations.
• Analysis of service contracts (water, electricity) to ensure they will be transferable.

Foreigners’ Property Rights and Possible Restrictions

Foreigners enjoy the same rights as Costa Rican citizens to purchase and hold real estate in “fee simple” ownership, without the need for residency or special status.

Main restriction: the “maritime zone” (first 200 meters from the high tide line). In this zone, only residents of more than 5 years or local corporations can obtain a concession on the next 150 meters; the first 50 meters are inalienable and public.

Outside the maritime zone, no specific restrictions exist for foreigners.

Tips for Choosing a Lawyer

• Select a lawyer specialized in Costa Rican real estate law, registered with the local bar association (“Colegio de Abogados”).
• Ensure they do not also represent the seller (conflict of interest).
• Prefer a firm with expertise in transactions with non-residents and knowledge of due diligence practices.
• Request a detailed fee quote and an explanation of included services.

Guarantees Offered to Buyers

Title insurance possible via international companies, protecting against hidden title defects.

Registration at the National Registry provides strong legal security; any mortgage or encumbrance must be registered to be enforceable.

In case of dispute:

• Recourse before Costa Rican courts for annulment of sale, restitution of funds, or damages.
• Possibility of private arbitration if a specific clause is included in the contract.

Key Takeaway:

Real estate purchase in Costa Rica is secure for foreigners, provided the legal procedure is followed, thorough due diligence is conducted, and competent professionals (notary, specialized lawyer) are engaged.

Guarantees for Expatriates: Securing Your Real Estate Investment

Understanding local legal specifics is essential for any expatriate wishing to secure a real estate investment in Costa Rica. Costa Rican real estate law differs significantly from European or North American legislation, particularly regarding cadastre, property titles, and foreigners’ rights. Registration processes, transaction transparency, and parties’ obligations require heightened vigilance.

Legal and Financial Guarantees Available for Expatriates

• Title insurance: Protects against title defects, property-related disputes, or registration errors.
• Homeowners insurance: Covers natural risks (earthquakes, floods), theft, vandalism, and civil liability. It may be mandatory for a mortgage loan or optional for cash purchases.
• Bank guarantee: In the context of a mortgage loan, banks often require borrower insurance covering death, disability, or job loss of the purchaser.
• Insurance delegation: Allows subscription to international borrower insurance, subject to equivalence with local requirements.

Type of Guarantee	Main Purpose	Mandatory?
Title Insurance	Secure the validity of the property title	Recommended, rarely mandatory
Homeowners Insurance	Cover natural damage, theft, liability	Mandatory if financed, otherwise no
Bank Guarantee	Secure loan repayment	Mandatory in case of credit
Insurance Delegation	Choice of an international borrower insurance	Depends on the bank

Steps to Obtain These Guarantees and Role of Specialized Lawyers

• Select a lawyer specialized in Costa Rican real estate law, ideally bilingual, to verify document compliance and title regularity.
• Request an in-depth title study (due diligence), including verification of the property’s history, any possible easements or mortgages, and the validity of ownership.
• Subscribe to title insurance with a local or international insurer.
• In case of financing, obtain borrower insurance meeting the bank’s requirements.
• Finalize the transaction before a Costa Rican notary, who proceeds with the official registration.

Main Risks for Foreign Investors and Role of Guarantees

Real Estate Fraud: Fake sellers, falsified documents, multiple sales of the same property.

Land Ownership Issues: Lack of clear title, disputes over land boundaries, undeclared third-party rights.

Natural Disasters: Increased risks (earthquakes, floods) that can impact the property’s value or viability.

Legal and financial guarantees allow:

• Protection against loss of investment in case of title defect or litigation.
• Securing financing and ensuring loan repayment continuity.
• Obtaining compensation or indemnification in case of loss.

Practical Tips for Expatriates

• Check the seller’s background and reputation.
• Demand a detailed title study covering at least the last 30 years.
• Prefer transactions through recognized agencies or lawyers.
• Never pay a deposit before legal validation of the file.
• Ensure all taxes and charges related to the property have been settled.

Concrete Examples

A French expatriate avoided a major financial loss thanks to title insurance: after purchasing land, an unknown inheritance dispute emerged. The insurance covered legal fees and allowed for compensation of the invested amount.

Following an earthquake, a foreign investor received prompt compensation thanks to homeowners insurance covering natural disasters, thus avoiding total depreciation of their asset.

Key Takeaway:
Understanding local law, surrounding oneself with specialized professionals, and subscribing to appropriate guarantees constitute the best protection for any expatriate investing in real estate in Costa Rica.