Legal Due Diligence vs Technical Due Diligence

In general terms, due diligence refers to the process of investigating and verifying information regarding a property by vetting potential issues or risks that may affect the purposes of the investment later in time. Due diligence is perhaps the best decision that an investor and/or expat can make when deciding to purchase a property in the Costa Rica.

Why is due diligence such an important decision? Since Costa Rica has no title insurance, conducting a proper Due Diligence with a reputable and experienced real estate law firm is a step in the right direction toward a safe transaction as it will provide the information necessary to make the final investment decision.

What is the purpose of Legal Due Diligence? With the legal due diligence, the buyer can ensure the legal status of the property, the title’s transferability, and the non-existence of legal contingencies that may affect ownership, possession, and enjoyment.

During this process, the buyer’s counsel will collect and assess all the legal documentation and information regarding the property that is provided by the Seller’s legal representative and public institutions. The requirements vary depending on the nature of the property, whether it’s a house, a condo unit, a commercial establishment, a vacant lot, etc. However, they all have the common goal of making sure the buyer makes and informed decision, if to move forward with the purchase by knowing the real and current status of the property, and asses’ potential contingencies, if any.

When it comes to buying vacant lots or properties to be developed or remodeled, you not only need to consider that from a legal perspective, the property is in good standing but also to make sure that, technically, the property is suitable for the intention that is being potentially bought.

Hence, at Quatro Legal, we provide and recommend as part of our service running a Technical Due Diligence. This is a complementary report from the Legal Due Diligence.

What is the purpose of Technical Due Diligence? The Technical Due Diligence is a study conducted by an engineer primarily focused on evaluating the technical aspects of a property by confirming the feasibility of building on the property, the applicable limitations, usage, and development of the property.

The technical due diligence will give a clear and precise vision of the property’s potential use and characteristics.

By performing the technical due diligence, relevant information will be brought to purchaser attention. If you are planning to build or develop some specific kind of project, always remember to request a Technical Due Diligence.

For more information, please fill out the courtesy e-meeting form at the bottom. We will be glad to assist you!

Hillary Cruz Chaves
Hcc@quatro.legal