Introduction
Buying property in Costa Rica can be an excellent investment opportunity. The country attracts many foreign buyers each year, drawn by its paradise-like landscapes, pleasant climate, and attractive real estate market. However, as in any booming market, scams exist. Unfortunately, some buyers fall into traps that can cost them dearly, both in time and money.
In this article, we will review the most common real estate scams in Costa Rica and the precautions you should take to secure your purchase and avoid becoming a victim of fraud.
1. The Most Common Scams
1.1. Selling Properties Without a Valid Title
One of the most frequent frauds in Costa Rica involves selling land or homes without a valid title. Some dishonest sellers attempt to sell land that belongs to the government, indigenous communities, or third parties without their consent.
🔹 Example: A foreign investor buys beachfront land without verifying the title. A few months later, they discover that the land actually belongs to the municipality and they have no legal claim to it.
✅ How to avoid this scam?
- Check the National Registry (“Registro Nacional”) to ensure the seller is the legitimate property owner.
- Hire a real estate attorney to conduct the necessary verifications.
1.2. Fake Real Estate Agents
In Costa Rica, a license is not required to work as a real estate agent, opening the door to fraudulent practices. Some individuals pose as legitimate agents and scam buyers by collecting deposits without delivering any property.
🔹 Example: A Canadian couple pays a $50,000 deposit for a villa in nature, but the agent disappears with the money without completing the sale.
✅ How to avoid this scam?
- Work with reputable agencies and verify their credibility online (reviews, professional website, references).
- Request proof of accreditation from the Costa Rican Chamber of Real Estate Brokers (CCCBR).
1.3. Fake Documents and Identity Theft
Some individuals use forged documents to sell properties that do not belong to them. Scammers may falsify signatures and impersonate the legitimate owner to complete fraudulent sales.
🔹 Example: A French expatriate buys a house in San José but later discovers that the sales contract is based on a fake title, and the house still legally belongs to the original owner.
✅ How to avoid this scam?
- Verify the authenticity of the documents with the National Registry.
- Ensure the owner’s signature is authenticated by a notary public.
1.4. Properties in Protected Areas or Subject to Restrictions
Costa Rica has many protected areas where construction is limited or prohibited. Some dishonest sellers attempt to sell land in these areas without informing buyers of the restrictions.
🔹 Example: An investor buys beachfront land with plans to build a hotel, only to later discover that the land is within a nature reserve where construction is prohibited.
✅ How to avoid this scam?
- Check with the local municipality to determine if the land is suitable for construction.
- Consult a lawyer to review zoning laws that apply to the property.
1.5. Advance Payment Scams and Hidden Fees
Some sellers or real estate developers require large upfront payments to “reserve” a property, only to disappear or impose additional fees that were not disclosed initially.
🔹 Example: A buyer pays a $20,000 deposit for a pre-construction apartment. Once the transaction is underway, the developer adds unexpected fees and threatens to cancel the sale if the buyer doesn’t pay.
✅ How to avoid this scam?
- Never make payments without a clear, detailed contract signed before a notary.
- Research the developer’s reputation before making a payment.
2. How to Secure Your Real Estate Purchase in Costa Rica?
Now that we’ve identified the most common scams, let’s look at the precautions you should take to avoid bad surprises.
2.1. Always Work with a Lawyer
Hiring a real estate attorney in Costa Rica is essential. They can:
- Verify property titles.
- Review sales contracts.
- Confirm the authenticity of legal documents.
2.2. Verify the Property in the National Registry
Before purchasing, consult the National Registry to:
- Confirm the legal owner’s name.
- Ensure there are no debts or legal disputes related to the property.
- Check that the property is free of mortgages or liens.
2.3. Request a Clear and Detailed Sales Contract
The contract should include:
- The full names of both parties.
- A precise description of the property.
- The price and payment terms.
- Penalties for contract breaches.
2.4. Beware of Deals That Seem Too Good to Be True
If a deal appears too good compared to the market, be cautious. Compare prices in the same area and ask questions.
2.5. Verify the Seller or Developer’s Reputation
- Look for online reviews and contact previous clients.
- Check the company or developer’s history.
2.6. Avoid Paying in Cash
Payments should always be made through traceable bank transactions. Never pay the full amount before the final signing of the deed.
Conclusion
The real estate market in Costa Rica offers great opportunities, but it is also prone to scams that can cost unsuspecting buyers a lot of money. Taking the time to verify documents, working with trustworthy professionals, and avoiding suspicious transactions will ensure a secure investment.
If you’re considering buying property in Costa Rica, proceed with caution and surround yourself with experts to guarantee a smooth and safe transaction.
🔹 Do you have a real estate project in Costa Rica? Contact a qualified lawyer or real estate agent to guide you through your purchase! 🚀