Avoid These Legal Mistakes When Buying Property in Costa Rica

Buying property in Costa Rica is an exciting step—whether you’re planning a luxury beachfront retreat, a smart investment, or a full-time move to paradise. But while Costa Rica welcomes foreign buyers and offers strong property rights, the legal side of real estate is where many buyers make costly mistakes.

Unlike North America, real estate transactions in Costa Rica work differently. There is no centralized MLS requirement, no mandatory title insurance, and legal protections depend heavily on proper due diligence and the professionals you choose.

Below, we break down the most common legal mistakes buyers make when purchasing property in Costa Rica—and how to avoid them so your transaction stays secure, compliant, and stress-free.

1. Skipping Proper Due Diligence

(One of the biggest legal real estate mistakes in Costa Rica)

Many buyers assume that if a property is listed, it must be legally sound. In Costa Rica, that assumption can be risky.

Due diligence in Costa Rica goes far beyond liking the home or trusting the seller. It includes:

• Verifying the property title in the National Registry

• Confirming property boundaries and cadastral maps

• Checking for liens, mortgages, or encumbrances

• Ensuring property taxes and municipal fees are current

• Reviewing zoning laws and land-use restrictions

Without this step, buyers can inherit unresolved legal issues—or worse, discover they don’t fully own what they paid for.

How to avoid it:Always work with an experienced local realtor who coordinates with trusted real estate attorneys and title professionals to perform full legal due diligence before any funds move.

2. Using the Seller’s Attorney

(A common conflict of interest)

It may sound convenient to “share” an attorney, but this is one of the most common legal pitfalls when buying property in Costa Rica.

In Costa Rican law, attorneys can represent both sides—but that doesn’t mean they should.

Why this is risky:

• The attorney may prioritize the seller’s interests

• Important contract protections may be softened or omitted

• Legal risks might not be fully disclosed

How to avoid it:Buyers should always have independent legal representation—an attorney who works exclusively for them, reviews contracts line by line, and ensures compliance with Costa Rican property laws.

This separation protects your investment and eliminates conflicts of interest.

3. Not Understanding Concession Land & Maritime Zone Laws

Beachfront property is one of Costa Rica’s biggest draws—but it also comes with unique legal rules.

Properties located within the Maritime Zone (Zona Marítimo Terrestre) are not owned outright. Instead, they are held under government concessions.

Mistakes buyers make include:

• Assuming concession property is fee simple ownership

• Not verifying concession validity or renewal terms

• Overlooking usage restrictions or transfer approvals

How to avoid it:Before making an offer, verify:

• Whether the property is titled or concession-based

• The remaining concession term

• Municipality approvals and zoning compliance

An experienced local expert will walk you through this clearly—before you commit.

4. Paying Deposits Without Secure Escrow

In Costa Rica, how and where funds are held matters just as much as the contract itself.

Some buyers unknowingly:

• Wire deposits directly to sellers

• Use informal holding agreements

• Skip escrow services to “save time”

This exposes buyers to unnecessary risk.

Best practice:All funds should move through secure escrow and title services with clear release conditions tied to contract milestones.

How to avoid it:Work with a team that coordinates:

• Licensed escrow companies

• Transparent timelines

• Written authorization protocols

This ensures your money is protected from offer to ownership.

5. Overlooking Corporate Ownership Requirements

Many buyers purchase property through a Costa Rican corporation (SRL or SA) for asset protection or tax planning. But doing this incorrectly can create legal and tax complications.

Common mistakes include:

• Buying a corporation with hidden liabilities

• Not updating shareholders or legal representatives

• Missing annual corporate filings

How to avoid it:Before purchasing through a corporation:

• Conduct full corporate due diligence

• Confirm clean financial and legal history

• Ensure compliance with Costa Rican corporate laws

This is especially important for investment and rental properties.

6. Signing Contracts Without Clear Exit Clauses

Not all purchase agreements are created equal.

Buyers sometimes sign contracts that:

• Lack clear contingency clauses

• Don’t specify timelines for due diligence

• Make deposits non-refundable too early

If legal issues surface later, the buyer may have limited recourse.

How to avoid it:Your purchase contract should include:

• Due diligence contingencies

• Clear closing timelines

• Defined exit conditions

A well-structured contract protects your leverage and gives you options—not pressure.

7. Assuming Costa Rica’s Process Works Like Home

One of the biggest legal mistakes buyers make is assuming the buying process in Costa Rica mirrors North America.

Key differences include:

• No mandatory title insurance

• Notaries play a central legal role

• Greater reliance on private due diligence

• Different escrow and closing structures

How to avoid it:Partner with professionals who specialize in the Costa Rican buying process and proactively explain every step—before surprises arise.

Buying Property Safely in Costa Rica Starts With the Right Team

Costa Rica offers incredible opportunities—but the legal side of real estate requires experience, transparency, and trusted professionals.

When handled correctly, buying property here can be:

• Secure

• Compliant

• Smooth

• Stress-free

When handled poorly, legal missteps can cost time, money, and peace of mind.

Work With a Partner Who Protects You From Day One

At Dawn Lane Luxury Real Estate, every transaction is built around protection, transparency, and trust.

From verified attorneys and secure escrow to full legal and title coordination, Dawn ensures every detail is handled properly—so nothing is left to chance.

No shortcuts. No surprises. Just clean contracts and peace of mind.

Ready to Buy Property in Costa Rica—Safely?

Whether you’re just starting your search or preparing to make an offer, expert guidance makes all the difference.

👉 Contact Dawn Lane today to get personalized guidance, vetted legal support, and a buying experience that protects your investment from offer to ownership.

Your future in Costa Rica deserves nothing less than clarity, confidence, and complete peace of mind.