The most basic – and essential – part of any property due diligence is the title search. The goals of a title search are to establish the seller’s legal right to sell the property; and to find out if the property has any legal entanglements, like mortgages or rights-of-way. Remember, however, that Costa Rica operates under a Napoleonic system of law, not a common law system. So whereas title searches in common law places like the United States and Canada can be complicated – involving banks, credit companies, local government, state government, and everything in between – all the information you’ll need for a title search in Costa Rica can be found in the Registro Nacional, or National Registry.
Even so, title searches are complicated, especially when dealing with farmland that hasn’t changed hands in decades. The title search starts online, on the National Registry’s Web site (www. registronacional.go.cr). Anyone can review the status of any property in the country simply by entering the finca, or property, number (as explained in the previous chapter). If there are no obvious deal breakers found in that initial search, your lawyer will then visit the National Registry to dig into the stacks and stacks of documents there that trace the property’s history back to the early part of the 20th century. If the property is held by a sociedad anónima, or corporation – which is fairly common – your lawyer will also need to get documents that establish the property seller’s ownership or authority to dispose of the corporation’s assets. All of these are, of course, areas in which your attorney should take the reins.
An overview of the process and what your attorney or you should be looking for will be published in the next article.
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