Yes, there is more paperwork
Real estate buyers need a good checklist to stay out of trouble when buying property in Costa Rica. However, most people forget about what needs to happen afterwards. Here is a checklist for after the closing.
First, the property needs to be transferred at the Registro Nacional. This is the notary’s job, but many do not rush to get it done. Many drag their feet for days, weeks and some even months. This is dangerous. An unscrupulous seller can sell a property to someone else, or even sell it repeatedly. Sure, that is illegal, but it happens, and the first buyer has hell to pay to get the property back. When property is purchased in Costa Rica, transferring it to the new owner immediately is a must.
The Registro has been a mess lately. Transferring property can take time. The most important step is to get the paperwork presented. In Costa Rica, the first in line is first in right. First in line, means, having the Registro stamp the paperwork with a date and a “tomo” and “asiento” number.
Yep, amazing but true, in a multiple property selling scam, the first to get the paperwork stamped at the National Registry is first in right. Go figure.
Second, when the property shows up transferred at the Registro and is in the name of the new owner, one needs to get four original certifications — five originals in case the property is part of a condominium — of a certificación literal and a catastro of the property and a personería of the owner, if the owner is a company. All property should be in the name of a company and not in the name of an individual. However, if the owner is an individual, a certified copy of the identification document used to purchase the property is required.
One copy of the documents goes to the electric company and another to the water company to change the names on the billing accounts. Many people never do this and find that one day they need to get the service changed or modified and they run into a brick wall because the institutions will not make changes to accounts not in the name of the correct owner.
The third copy goes to the municipality where the property is located to change the municipal account information. Municipalities collect property taxes and other fees on properties. At the municipality, it is necessary to fill out a form, too, updating the declared value of the property. Most people do not fill in the real value.
For a condominium, a copy needs to go to the condominium association so administrators can update their records.
Phone lines are a different story. Before Sept. 29, 1995, phone lines were an asset and owned. Now they are leased to users. It is difficult to get the phone company to change the name of an account. However, it can be done by filing a “gestoría de negocios” with the phone company.
If one buys a property with a phone line, he or she should get a special power of attorney from the previous owner of the line so changes can be made to the service.
Without a power of attorney, the phone company — in its wisdom — wants a new owner to turn in an existing line and be put on a waiting list — which can take years — to get a new line.
Most new property owners just keep the existing line under the name of the previous owner. It is a good idea to be put on the waiting list so when another line comes available, the new owner can get another line in the correct name.
The left over copy should be filed for future reference or for when one of the institutions calls and says they have lost their first set — which invariably happens. Its part of living in Costa Rica.