Finding the perfect property in Costa Rica — What’s the Next Step?

Finding the perfect property in Costa Rica is exciting, but before you sign anything, it is crucial to follow the correct legal steps to ensure a safe and secure real estate transaction. Here’s a step-by-step guide on what comes next.

Step 1: Preliminary Title Check—DO NOT SIGN ANYTHING YET!

Once you have identified a property you want to buy, the first step is to have a real estate attorney conduct a preliminary title review at the Public Registry. This ensures that:

✔ The property is free of liens, encumbrances, or legal disputes.
✔ The seller is the legal owner and has the right to sell.
✔ There are no undisclosed easements or restrictions affecting the property.

⚠ Important: DO NOT sign any agreement or pay any money before your lawyer confirms that the title is in good standing.

Step 2: Drafting the Option to Purchase and Sale Agreement (OPSA)

Once the preliminary title check is clear, the next step is drafting the Option to Purchase and Sale Agreement (OPSA). This contract governs the entire transaction until closing and includes:

🔹 The agreed purchase price and payment structure.
🔹 The down payment amount (typically 10%-20%).
🔹 The escrow account details where the funds will be deposited.
🔹 The due diligence period (usually 30-60 days).
🔹 The closing date and conditions.

Why is the OPSA so important?
This document protects both buyer and seller, ensuring that all terms are clear before moving forward. A poorly drafted OPSA can lead to legal complications or financial risks.

Step 3: Opening the Escrow Account & Depositing the Down Payment

Once the OPSA is signed, the escrow account is opened to handle:

💰 The down payment (held securely until due diligence is approved).
⚖ Preliminary legal fees and closing expenses.

Why use an escrow account?
Costa Rican banks have strict anti-money laundering regulations, and sending large sums of money directly to a seller is risky. Escrow ensures a transparent and legally compliant transaction.

Step 4: Conducting Due Diligence (30-60 Days)

The due diligence process is the most critical step before closing. Your lawyer will:

🔎 Verify the legal status of the property at the Public Registry.
🏡 Check municipal permits, land use regulations, and environmental restrictions.
📜 Review the property’s tax and utility status (confirming no outstanding debts).
📑 Ensure that the seller has provided all required documentation.

This process usually takes 30-60 days, depending on how quickly the seller and their attorney respond to requests for information.

Step 5: Approving Due Diligence & Preparing for Closing

If everything checks out during due diligence, the buyer gives the green light to proceed with closing. At this stage:

✍ Closing documents are drafted, including the final transfer deed.
📅 The closing date is confirmed.
💰 The balance of the purchase price is prepared for transfer.

What happens if issues arise during due diligence?
If serious legal or structural problems are found, the buyer has the right to:

❌ Walk away from the deal and get the deposit refunded (if the OPSA allows it).
⚖ Renegotiate the terms with the seller (for example, a price adjustment or required fixes).

Step 6: Closing the Transaction

On closing day, both parties will sign the transfer deed before a Costa Rican notary public. The remaining balance is then transferred from the escrow account to the seller, and ownership is officially transferred.

Final Steps:
✔ The new owner’s title is recorded at the Public Registry.
✔ Any remaining taxes or fees are settled.
✔ The buyer receives possession of the property in Costa Rica.

Final Thoughts: A Safe and Secure Closing Process

Buying your perfect property in Costa Rica requires a structured legal process to protect your investment. The key takeaways are:

✅ DO NOT sign anything before a preliminary title check.
✅ A well-drafted OPSA is essential to avoid legal risks.
✅ Escrow accounts ensure a transparent transaction.
✅ Due diligence (30-60 days) is critical before finalizing the deal.
✅ An experienced real estate attorney will guide you through every step.

At LandCo, we specialize in real estate closings for foreign buyers. Contact us to ensure your transaction is smooth, legally sound, and secure.

📞 For more expert insights, visit our blog: www.landcolaw.com/blog or contact us.