Jaco Real Estate Dictionary Costa Rica
Buyers Agents - Real Estate Agents that specialize in working with buyers and representing buyers interests. In Jaco Real Estate and for Jaco Buyers Agents this means that the real estate agent, like your agent with Oceanside Realty will go out of their way to make sure they give excellent service and put the buyers needs, wants, wishes and desires first. For first time buyers to Costa Rica or foreign buyers such as buyers from the United State and Canada it is important that you have carefully chosen a professional who represents the buyers interests.
Fee Simple - Fee Simple refers to the type of ownership of a Costa Rica or Jaco Property. Fee Simple is similar to the way most properties are bought and sold in the United States and Canada where the buyer owns the property free and clear of the government. You buy it. You own it. Other types of property ownership includes Concession Property (lease hold) and Right of Possession. You have the most rights when purchasing Jaco real estate that has fee simple ownership. Foreign buyers have the same rights as Costa Rican citizens when purchasing fee simple property. Oceanside Realty strongly recommends that most buyers purchasing property in Costa Rica purchase real estate that is fee simple.
Concession Property - Concession Property in Costa Rica is similar to lease hold property in the United States or Canada. Concession property is most common in Costa Rica's maritime zone or within 200 meters of the ocean on both coasts. Most property along Costa Rica's coast line or beaches is Concession Land. Concession Land is controlled by National Laws but administered through the local municipal governments. Owning a concession for a property gives the owner of that concession the right to use the property (similar to a lease). Unlike Mexico and most of Latin American properties that are concession property that have 99 year leases, Costa Rica concession properties have 20 year lease periods and the governments are not required to renew concessions which make ownering concession property a risky proposition.
National Registry (Registro Nacional) - Property in Costa Rica and Jaco is registered in a National Registry. The National Registry is a transparent system that allows buyers, real estate agents and attorneys to easily check on the ownership status of a property. The National Registry in Costa Rica will also show if a property has any lawsuits, leins, annotations, mortgages or other issues that could negatively affect ownership for a new buyer. It also shows the ownership of a property and the size and location of the property. In order to utilize the Costa Rican National Registry, one must have a plano (survey) number or folio real number. This information is found on a copy of a registered survey.
Escrow - an independent 3rd party account that temporarily hold funds for a transaction according to the instructions as described in the escrow agreeemnt. Escrow accounts in Costa Rica continue to face more and more government regulations. Legal escrow accounts in Costa Rica require a series of documents to be completed and kept on file by the escrow company. Escrow companies typical charge a small transaction fee for their services.
Closing or Settlement - The closing or settlement is the day when the documents are signed and notarized by a notary and is typically the day that escrow funds are released to the seller.
Notary - In Costa Rica a notary must first be an attorney, then after completing a series of classes and an exam, the attorney becomes a notary. The notary is very important in Costa Rica legal transactions. The notary records the legal filings and transactions in the notary books. Every time real estate in Costa Rica is transferred from one party to another, a notary is involved to record the transaction and file the appropriate documents to make the transfer public in the national registry.
Notary Books - Costa Rica notary books are official, legal documents and record of legal transactions. The notary keeps the books until they are full, then files them in the legal archives with the national government. Weekly summaries of the notary books are required to be filed with the national government until the books are full.
SRL (Sociedad de Responsabilidad Limitada) - Similar to an LLC or limited liability company in the United States, an SRL has similar protections of an SA (Sociedad Anonima) like a US C-corp, but the SRL is easier to set up and requires fewer members than does the SA. Check with a certified public accountant in Costa Rica to better understand the tax consequences. Also, if you are a foreigner, you should also consult your international tax accountant / lawyer in the US, Canada or the country in which you reside for tax consequences from earnings (or losses) from a Costa Rican SRL.
SA (Sociedad Anonima) - Similar to a C-Corp in the United States. A Costa Rican SA is a company in which the shareholders remain anonymous, but it requires a board of directors and a legal representative. Check with your attorney and tax accountant to learn if your corporation should be incorporated as a SA or SRL.
Holding Company - In Costa Rica, it is not unusual to own real estate in a corporation - either a SA or SRL. There are liability protections that are extended to the owners or shareholders of the property (corporation), which is one of the most popular reasons to own property in a corporation or as a means to transfer of ownership. By having the shares of the corporation transfer and not the actual property (the property stays in the corporation). Check with your legal advisor to see if purchasing or selling a property in Costa Rica should be done in a Costa Rica Holding Company.
Real Estate Transfer Tax - a Costa Rican tax that is assessed on the transfer of real estate. The fee is approximately 4% including the stamps and incidental fees. As always check with your legal advisors before buying or selling or transferring property in a Holding Company and to see what your actualy tax burden may be on your real estate transfer tax.
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