What Does A Technical Due Diligence For Buying Property In Costa Rica Entail?

Since Costa Rica has no title insurance, running proper Due Diligence is a key element when purchasing a property. Quatro Legal performs, as part of its services, Legal Due Diligence to confirm if there are any contingencies that could affect or jeopardize the purchase of a property or development of a project.

However, when purchasing a vacant lot or a property to develop a project, we always recommend our clients to perform a Technical Due Diligence (TDD), along with the Legal Due Diligence.

The TDD is performed by an engineer and their team and offers a technical perspective of the property’s status assessing all its technical aspects to confirm if the land is suitable to be developed, under what zoning terms it can be done, and if there are any applicable restrictions to its intended use.

Some of the items detailed and reviewed in a Technical Due Diligence are:

• Topography: This is especially relevant if planning to build or develop a property. Determining what type of topography exists on a property allows setting expectations for the scope and designs of the projects that can be performed in it.
• Tree Coverage: Estimating the tree coverage based on aerial photography and public maps is essential since depending on the amount of tree coverage, there might be some restrictions on the percentage of the land that can be developed and the ability to cut them down. Moreover, tree coverage may qualify as primary or secondary forest protected by Forestry Regulations which could lead to an area being considered patrimony of the State and therefore not usable.
• Hydrology: By researching the general hydrology of the area, it is possible to confirm if a property may be affected by rain and its draining conditions. Additionally, it could be determined the chances of flooding or if it is in an area considered of high flooding risks.
• Sewage: Confirming access to sewage availability and/or the feasibility of installing sewage infrastructure and septic tanks or treatment plants is key for development projects and building houses.
• Zoning plan: Existence of a zoning plan or not could imply specific restrictions to development, building and use capabilities. Therefore, a Technical Due Diligence could permit assessing the impact of a zoning plan to the development of a property.
• Wells: Assessing if wells or water bodies exist or are close to the property is important as they may affect its usage, enjoyment, and make it subject to significant setbacks.
• Oil pipelines: Confirming if there might be any risks associated with oil pipelines running close to the property it’s important to protect its use.
• Airports: Through TDD, civil aviation maps can be checked to determine the closeness of airports and if landing strips are located near the property. This can affect height restrictions for specific buildings.

The above items are part of the standard technical due diligence. As per the client’s request and per the nature of the project to be developed, the performance can be directed to uncover or discover specific limitations of the property.

As advisors want to make sure properties are in legal good standing but also that buyers can develop the project they intended to when they first placed an offer on it.

If wondering the difference and the scope between a technical and a legal due diligence, please see the article of Legal Due Diligence vs 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

Disclaimer: The information provided in this blog post is for general informational purposes only and is not intended to constitute legal advice. While we strive to ensure the accuracy and timeliness of the content, laws and regulations are subject to change. For the most accurate and up-to-date information, please contact our office directly. Some images may be AI generated.