Due Diligence process for purchasing land in Costa Rica

Our team of legal and professional consultants will perform a rigorous due diligence process to ensure your Costa Rica investment property is suitable for purchase. We have a 12 point checklist that needs to be satisfied in order to move to the acquisition phase.

Typically the period of due diligence lasts 30 days, but more time can be negotiated. During this time the deposit is refundable if any item included in the diligence were to return unsatisfactory results. The deposit is NOT refundable if the buyer decided to change their mind for some other reason.

Due diligence items for successfully buying land in Costa Rica may include:

1. Check title of property and search for any leans, encumbrances, pending legal cases from past workers etc. The attorney will perform this investigation of both the title and the holding corporation.The buyer realtor can do a preliminary title search and look up the property in the national registry.

2. A property survey completed by a topographer. This is optional and highly recommended if lines are unclean and not properly marked. This is an additional cost, which depends on the size of the property.

3. Soil test, which is usually only taken for a raw land property. Core samples of the soil are taken and determine the soils stability. $800 for the report in English and 3 core samples plus a peculation test for where a septic tank would go (if the property has a finished home, this part is not needed). One may choose to test the soil above or below a home, where potential future building could take place. Always inquire if the owners have preformed this test prior to building.

4. Home inspection, to assess the structure of the home, in order for the buyer to be fully informed of the condition of the home. This is not preformed in order to renegotiate the sales price based upon necessary repairs to the home. Homes are sold "as is". The cost of an inspection also depends on the size of the home, on average the cost is $800 for a single family home.

5. Open a holding corporation. Quite commonly the attorney will recommend a buyer to open a new holding corporation to take possession of the property “asset”. The majority of properties are in a corporation for liability reasons, ease of paying bills in the company name and ease of passing the shares to beneficiary if something were to happen. There also remains the option of transferring the shares of the existing corporation into the buyer’s name. The cost of opening a new corporation range from $350 to $700.

6. Prepare information for electric, phone, TV, internet bills and any insurance policies. Likely these services will be registered in the name of the existing holding corporation for the property.