Due Diligence Checklist for Buying a House in Costa Rica

Costa Rica's coastline from the high tide line inland 200 meters is called the Zona Marítimo Terrestre (ZMT) — the Maritime Terrestrial Zone. Within that strip:

• First 50 meters — zona pública. Nobody owns it. It belongs to the state and the public has a right of access. You cannot build on it. You cannot fence it. Selling "first 50" to a foreigner is flat-out fraud.
• Next 150 meters — zona restringida (concession zone). Owned by the state. A municipality can grant a 5-to-20-year concesión to use and build on the land. Foreigners can hold up to 49% of a concession; the remaining 51% must be held by a Costa Rican citizen or a company with majority Costa Rican ownership.

The first question to ask: is this property titled (propiedad titulada, fee simple, recorded at the National Registry with a folio real number) or is it a concesión marítima held under the Ley 6043? These are completely different animals. Americans buying a "beach property" at Tamarindo, Jacó, Nosara, Santa Teresa, or Dominical routinely discover they bought a concession without realizing it. Cody Gear & Associates' maritime zone investigation guide documents real cases of $770,000+ total losses.

If it's a concession:

• Is the concession current, or expired? Expired concessions revert to the state. Period.
• When does it renew? Renewal is discretionary and the municipality can refuse for environmental violations, unpaid fees, or political reasons.
• Who holds the 51% Costa Rican share? Is it a corporation with multiple shareholders, one local attorney, or a Tico family you'll never meet? If the 51% holder is a single local and the corporate structure lets them transfer their shares without your consent, you do not control the property.

If it's titled — congratulations, you're in much safer territory. A titled property 250+ meters from the beach is a normal fee-simple asset. A titled property inside the ZMT is legally ambiguous; in most municipalities titled land within the zone was grandfathered before the 1977 law and still functions, but some municipalities are slowly reclaiming disputed strips. Your lawyer should pull a cadastral overlay showing exactly where the ZMT boundary sits relative to the folio real. See our companion piece on Costa Rica's maritime zone rule for the legal background.

Every titled property in Costa Rica has a folio real — a unique identifier issued by the Registro Nacional (National Registry). The registry is fully digital and searchable online. Your attorney (or you, if you register for a free account) can pull:

• Current recorded owner
• Chain of title
• Any annotations — which is the critical part
• Liens, mortgages, easements (servidumbres), and court orders
• Outstanding debts, including unpaid property tax (impuestos municipales)

Annotations (anotaciones) are temporary liens or court orders — divorce proceedings, criminal cases, tax disputes, inheritance challenges. An active annotation means the title is contested. You cannot safely buy a property with an open annotation. Your attorney must pull a fresh registry certificate (certificación literal) within 72 hours of signing anything — not a month-old copy the seller provides.

Cost: $10-30 USD for a digital certification, $50-100 if your attorney pulls it for you. Skip this to save $30 and lose $300,000. TheLatinvestor's breakdown of Costa Rica property pitfalls walks through real cases where buyers ignored annotations.

The folio real tells you who the registry thinks owns the property. It does not tell you whether the property's physical boundaries match what the registry thinks they are. This is a problem specifically in rural Costa Rica (Guanacaste, Osa Peninsula, Nicoya, the Southern Zone), where:

• Surveys from the 1960s-80s were done by hand with variable accuracy
• Multiple overlapping fincas exist on the same patch of ground
• Squatter rights (usucapión / adverse possession) can vest after 10 years of uninterrupted possession under Costa Rican civil code. If a neighbor has been running cattle on your "back 40" for eleven years, your neighbor might legally own the back 40 now.

The defense: insist on a modern catastral survey (plano catastrado) registered with the Catastro Nacional. Older properties will have an old plano; if that plano is more than 20 years old or shows inconsistencies with neighboring plans, commission a new survey ($500-1,500 USD). A licensed Costa Rican topógrafo (topographer) walks the perimeter with GPS and files the updated plan.

This is table stakes for any rural property purchase and it catches a surprising number of problems. A thread on r/CostaRica about finca boundary disputes has the usual sad stories.

Costa Rica is water-rich but water rights in rural areas are not automatic. For anything off the municipal grid, you need a water source — a well, a spring (nacimiento), or a river concession — and registered permission to use it from the Dirección de Aguas at MINAE (Ministry of Environment).

For a property in a new gringo subdivision, the water comes from a communal well or pipeline owned by the desarrollador (developer) or an HOA. Read the water agreement. Who holds the concession? Who pays for the pump maintenance? What happens if the HOA dissolves or the developer walks? In multiple well-documented cases — one published by Tico Times — developers retained water concessions under a personal name and cut service to enforce disputed HOA fees years later. There is no legal recourse in Costa Rica for a water shutoff on disputed private infrastructure.

For a rural property with a well, ask:

• Is the well aforado (formally measured and registered with MINAE)?
• What is the permitted volume?
• Does it run dry in the February-May dry season? (This is the most commonly hidden defect in Guanacaste.)
• Who else uses the well and under what agreement?

An unregistered well is not necessarily fatal but it's a negotiating point and a small regulatory risk. Nanku Ecovillage's Costa Rica land buying guide emphasizes water rights in its due diligence section and is worth reading end-to-end.

Costa Rica has a well-deserved environmental reputation and an extensive protected area system. What Americans miss is that protections extend beyond the national parks. Under the Forestry Law and the Environmental Organic Law:

• You cannot clear primary forest. Period. Felling a single old-growth tree without a permit carries criminal penalties.
• Setbacks from rivers (áreas de protección de ríos) — typically 15 meters on each side in flat terrain, 50 meters on slopes — are off-limits for construction.
• Springs, wetlands, and certain slope thresholds have separate protections.
• SETENA (the Secretaría Técnica Nacional Ambiental) regulates development permits. Any construction above ~300 sqm or on steep slopes requires an environmental impact study.

Many rural Costa Rican properties advertised as "50 hectares, build anywhere" legally have maybe 5 hectares of buildable land once you pull the environmental overlay. Before buying land you plan to develop, pay $800-2,000 for a SETENA-registered environmental consultant to assess the buildable envelope. Skipping this is how "cheap land" becomes an expensive mistake.

Most foreign-owned property in Costa Rica is held through a Sociedad Anónima (S.A.) — a Costa Rican corporation. This is fine and common. It also means that when you buy the property you're usually buying the shares of the corporation, not the property itself. This changes the entire due diligence process.

You need:

• Personería jurídica — current corporate registration showing who the legal representative is
• Full share transfer history
• Corporate tax filings — is the S.A. current on its annual corporate tax (impuesto a las personas jurídicas, ~$120/year) and its Declaración Jurada de Transparencia y Beneficiarios Finales (the anti-money-laundering beneficial ownership filing, required annually)?
• Any corporate debts — if the S.A. has unpaid taxes, judgments, or contracts, those transfer with the shares when you buy the company

Buying shares is safer in one way (no transfer tax at the property level) and much riskier in another (you inherit all corporate liabilities). Your attorney must pull a full corporate file and, ideally, a Costa Rica national tax clearance. Our article on buying through foreign corporations goes deeper on this.

The Crespo Agency guide to avoiding rip-offs is the best plain-English primer on S.A. transfer mechanics I've found.

Obvious but skipped. Your attorney must confirm:

• The person signing is the actual legal representative of the corporation that owns the property, or the actual registered individual owner
• Their ID matches the registry
• For married sellers in Costa Rica, community property rules apply — both spouses must sign for a valid transfer in most marital regimes
• No inheritance proceedings are open on the property
• Power of attorney documents (if any) are valid, recorded, and not revoked

This feels paranoid until you read about the Tamarindo case where a seller had been divorced for two years, lost the property in the divorce settlement, and kept trying to sell it to Americans anyway. The US Embassy periodically publishes warnings about Costa Rica property fraud that reference exactly these cases.

Never, ever wire your deposit or your balance to the seller, the seller's attorney, or the real estate agent directly. Use a Costa Rican SUGEF-licensed escrow provider — SUGEF is the financial regulator and escrow providers licensed by it are subject to real AML and auditing requirements. Common ones include Stewart Title Latin America, Secure Title Latin America, Tierra Firma, First American Title Costa Rica, and a handful of bank-affiliated escrows.

Escrow fees in Costa Rica run $500-1,500 for a typical transaction plus 0.1-0.3% of the amount escrowed. A bargain. The paper trail alone is worth it — if something goes sideways at closing, your funds are in a regulated institution, not a lawyer's personal IOLTA.

Never skip this. The most common scam mechanism in Costa Rica is a seller's attorney who "escrows" funds in their personal operating account and then disappears for six months claiming bank delays. SUGEF-licensed providers are the firewall. Costa Rica Law has an explainer on SUGEF escrow requirements and is worth bookmarking.

Unlike most Latin American countries where title insurance barely exists, Costa Rica has a reasonably mature title insurance market — mostly through Stewart Title and First American. Premiums are 0.5% to 1% of purchase price, one-time, at closing.

Title insurance in Costa Rica specifically covers:

• Undisclosed heirs
• Forged documents in the chain of title
• Survey errors (but not all of them — read the exclusions)
• Fraudulent powers of attorney
• Some — not all — maritime zone reclassifications

It does not cover:

• Future expropriation (rare but possible)
• Environmental violations
• Adverse possession claims that were ongoing at closing
• Corporate liabilities transferred via share purchase (so if you're buying an S.A., you need different coverage)

On a $350,000 titled property, title insurance runs ~$2,500-3,500. Roughly 1% of the purchase price. Cheap hedge against the scenarios that otherwise destroy you. The Latinvestor on Costa Rica pitfalls cites this as one of the two most skipped protective measures.

Any one of these, in isolation, is enough to kill a deal. Two or more is a pattern and you should run:

• Seller pressures quick closing — "another buyer is waiting" is almost always a lie
• Seller refuses to provide fresh registry certification, water concession papers, or corporate tax clearance
• Concession property where the 51% Costa Rican shareholder is unknown or won't meet
• Dramatic discount to comparable listings — in Costa Rica, every 'too good to be true' deal has an explanation and it's never in your favor
• Deposit requested to a personal bank account
• Attorney chosen by the seller who refuses to provide references from other US buyers
• Survey more than 10 years old and the property has no recent catastral update
• Property held by an S.A. the seller can't produce current corporate filings for
• Ejido-equivalent vagueness about who "really" owns disputed parts of the parcel
• Any mention of "pending" legal issues — in Costa Rica, pending issues can pend for a decade

The good news: Costa Rica is not a country where buyers routinely lose money. It is a country where uninformed buyers routinely lose money. The difference is a careful attorney, an independent survey, a SUGEF escrow provider, and a willingness to walk away from anything that doesn't check out. If you do the work, you end up with a clean, titled property in one of the most stable democracies in Latin America. If you don't, you end up in one of those Tico Times stories.

For more on what you can actually buy in Costa Rica at a given price point, see our Costa Rica homes under $200K article, and for how Costa Rica compares to the other common Central American destination, read our Panama vs. Costa Rica retirement comparison and our Belize vs. Costa Rica article. Real current listings are at our Costa Rica country page broken out by city.