Most Important Non-legal Services To Consider For Your Real Estate Investment

by Quatro Legal Real Estate Team | Mar. 01, 2024 | Article, Real Estate

The 3 Most Important Things You Need To Do Before Buying Property In Costa Rica

One of the most common mistakes foreigners make when acquiring property in Costa Rica is not doing a correct due diligence on the property.

The purpose of Due Diligence is to legally and technically confirm that the property is in good standing. Conducting a surveyor’s report, obtaining an inspection report, and securing construction and architectural support represent the three most critical non-legal services to complete during the due diligence period.

 

3 Non-Legal Services You Need Before Buying Property in Costa Rica

Don’t make avoidable mistakes before investing in Costa Rica real estate. Learn more about how to protect your investment with these three crucial non-legal real estate services:
 

1. The Surveyor Report

What is a surveyor report?

A surveyor report is a document prepared by a topographer, who conducts a study or survey of a specific piece of land. This report aims to offer detailed insights into the condition, boundaries, features, and other pertinent aspects of the surveyed area. Commonly utilized in real estate transactions, property development projects, land use planning, construction endeavors, and legal disputes concerning property boundaries, a surveyor report delivers crucial information related to the property.

What should a complete surveyor report for property in Costa Rica include?

When conducting a surveyor report, the topographer compares the information from the survey map, officially recorded at the Public Registry, with data gathered during an on-site inspection. This process verifies whether the property’s boundaries, area, and location match the recorded details.

A comprehensive surveyor report includes a detailed description of the property’s physical characteristics, boundaries, dimensions, fences, terrain, location, property lines, corner marks, any easements, encroachments, and existing structures.

It’s also crucial to recognize that approximately 25% of Costa Rica’s land is safeguarded by national parks, reserves, and wildlife refuges. Hence, a thorough report will confirm whether the property lies within a protected area or near or within a maritime zone, necessitating special consideration of zoning rules and regulations for building and development.

With advancements in technology, survey methods have become significantly more precise than they were in the 1980s, making a surveyor report essential for properties with outdated surveys. Based on the survey findings, the surveyor will offer conclusions, identify issues that require attention, and provide recommendations for the property.

How do I choose the right surveyor for my property in Costa Rica?

Before selecting a surveyor, it’s wise to ask for referrals from real estate agents or lawyers, ensuring that the candidates are familiar with your area of interest. A common mistake is to hire a surveyor who lacks experience in the location of the property. A surveyor knowledgeable about the area can offer guidance on how to proceed should any contingencies arise, drawing not only on general rules and regulations but also on the legal provisions of the municipality and the characteristics of surrounding buildings.

To put it another way…

A surveyor report ensures that you get exactly what you’re paying for in your Costa Rica property.

 

2. The Inspection Report

What is an inspection report?

An inspection report is a document summarizing the results of a comprehensive examination of a house, apartment, or building. This evaluation is usually conducted and compiled by a qualified engineer or architect, who assesses the condition, safety, and functionality of the construction in accordance with the Costa Rican building code.

Such reports are frequently utilized in real estate transactions and home purchases to determine the condition and safety of a property.

What should a complete inspection report include?

The inspection report should be conducted by an engineer or an architect and must encompass observations, assessments, and recommendations based on the findings of the existing construction.

The scope can vary depending on the type of inspection and may include structural integrity, electrical systems, plumbing, roofing, safety hazards, code compliance, and more. It’s important to note that an inspection report might not cover the assessment of structural deficiencies, which may necessitate special equipment, personnel, and additional time.

Should you need a particular element examined, it’s essential to ask if it’s part of the standard inspection process or if it incurs additional costs. For assistance in these matters, consulting a Costa Rica real estate lawyer can be very beneficial.

 

3. Architectural and Construction Support

What is architectural and construction support?

Architectural and construction support involves the assistance and collaboration of a professional during the purchase of a house under construction or remodeling, or when buying a lot for construction purposes.

This means the architect or engineer will assess whether the property’s zoning and building regulations align with your intended project. Once construction begins, they will conduct regular inspections to ensure the actual work corresponds with the blueprints, and that quality standards and milestones are being met.

A common mistake among clients purchasing newly built property in Costa Rica is to rely on close acquaintances, like a Costa Rica real estate attorney, to monitor construction progress, adherence to schedules, and quality maintenance. However, such individuals often lack the necessary construction knowledge, making their assessments less technical than required.

Clients who avoid the costs of engaging a professional to oversee their construction project’s progress may later face warranty or civil claim issues, or problems with budget execution. They might only realize after moving in that there are defects affecting the house’s functionality or that the project did not adhere to the planned schedule.

Why are these non-legal services important for your property in Costa Rica?

While it’s true that these three studies or reports incur costs, the expense is significantly lower than the potential financial losses of the following possible scenarios:

a) purchasing a lot advertised as 1000 square meters, only to find that just 200 square meters are suitable for construction

b) buying a house that, post-purchase, is discovered to have structural issues requiring repairs costing up to half the asset’s price

c) investing in a new house at a premium price that turns out to be dysfunctional, presents numerous operational problems, and could lead to a warranty claim process entailing various costs, including legal fees and expenses.

Unfortunately, these scenarios do happen with property in Costa Rica — but they are entirely avoidable if you take the right steps!

These reports deliver invaluable insights to buyers, sellers, property owners, insurers, and lenders, enabling them to make well-informed decisions about the property or asset in question. Remember, these are investments, not mere expenses!

Want to learn more about how Quatro Legal can offer holistic support for your Costa Rica real estate journey? Please fill out the courtesy e-meeting form and we will be happy to assist you!

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