Legal Options for Owning Real Estate
This is part two of the series of real estate purchase process in Costa Rica. This time, we will review the title options for owning real estate in Costa Rica.
Under Costa Rican law, the following options are available to purchase and to own property titles in Costa Rica.
Fee Simple Absolute
It is the absolute title for a piece of land, free of any other claims against the title, which one can sell or pass to another by will or inheritance. This term is a redundant form of “fee,” but is used to show the fee (absolute title) is not a “conditional fee,” or “determinable fee,” or “fee tail”.
Tenancy in Common
This option allows two or more people to have title of a given piece of property, in which each has an “undivided interest” in the property and all have an equal right to use the property, even if the percentage of interests are not equal or the living spaces are different sizes.
One example is, two friends decide to purchase a hectare of land in the country or a house in the city. Their ownership is going to be defined in the deed according to their agreement. It can be in equal parts of 50% each, or any other proportion they see appropriate. Once the deed is recorded in the recorder of deeds (Registro Nacional) the records will show how much ownership each person will have for the property in question.
Tenancy by the Entirety
This is a variation of co-tenancy, in which there is joint ownership of title by husband and wife, and by which both have the right to the entire property.
Although, the recorder of deeds may not necessarily reflect the 50% ownership of both spouses, the reality is that under Family Law, each spouse is entitled to 50% of the assets of the other spouse. If during the marriage a couple purchases a home, lot, condo, etc, each spouse owns 50% of that property. Rarely, couples proceed to indicate in the deed the proportional ownership of the property, which as you may expect, will later result in legal battles in family court if they decide to get divorced.
Life Estates
A life estate is the right to use or occupy real property for one’s life. Often this is given to a person (such as a family member) by deed or as a gift under a will with the idea that a younger person would then take the property upon the death of the one who receives the life estate. Title may also return to the person giving or deeding the property or to his/her surviving children or descendants upon the death of the life tenant-this is called “reversion.”
Life estates are not very common. An example is when an owner wants to pass property to his/her children prior to death. The owner passes the ownership but retains the right to use the property until his/her death. Upon death, the possession and the right of use will be passed to the children.
As you can see, these options are very similar to the ones you can find in other countries. There is something that baffles me and bothers me about expats buying owning Costa Rica property ownership in Costa Rica in Costa Rica; they seem to forget about the rules they knew back home. I have seen it time and time again, when expats buy legal options for property in Costa Rica in CR, their common sense dissipates into thin air and disaster happens. For instance, I have repeatedly seen instances where expats “buy” how to buy property in Costa Rica and do not get any type of title to the property, they believe it is normal because they are in another country and they believe this is the way things work, and they believe that because their attorney told them, or the Costa Rica property legal requirements agent told them, or they found it in a blog.
