Costa Rica Real Estate, from Coast to Coast, the Right Way!!!

By Attorney Roger Petersen for The Easy Times

 IV. Real Estate Commissions and Attorney Closing Fees

The Costa Rica Real Estate Agent should ensure that the real estate commission agreement is specified within the Buy Sell Agreement (also called option to purchase - sale agreement) signed by the Buyer and the Seller.

The agent should include provisions which contemplate a commission split in the event of a default by the Buyer. We also include a clause which authorizes the escrow agent to disburse the commission directly to the real estate agent simultaneously at closing.

 

The Attorney must abide by the Fee Schedule established by the Costa Rican Bar Association (Decreto Ejecutivo No. 32493) Compliance with the minimum fee schedule is mandatory for all Costa Rican Attorney´s / Notaries.

Costa Rica Notary Fees

For Costa Rica real estate transactions the current minimum fee schedule passed in November of 2005 is based upon the value of the transaction as follows:

First 10 Million Colones 2%
Excess of 10 to 15 Million Colones 1.5%
Excess of 15-30 Million Colones 1.3%
Excess of 30 Million Colones 1.0%

Bear in mind that this fee is for drafting and filing the property transfer deed. Any additional services including the drafting of purchase agreements, escrow and the like may carry additional fees.

In addition to the Notary Fee, the parties must deliver to the Notary the applicable transfer taxes and registry fees due on the transaction and these typically include:

(a) Property Transfer Tax of 1.5% (b) National Registry Fee of .5% (c)
Documentary Stamps of Approximately .6%

There is a common practice to transfer the stock of a corporation (S.A.) instead of the property itself to avoid the property transfer taxes. From our standpoint it is much cleaner to transfer the property outright since it involves one legal transaction filing.

To purchase a corporation involves in addition to the Costa Rican property title due diligence also some degree of corporate due diligence. Since there is no centralized corporate debt filings in Costa Rica there is no way to check for hidden liabilities. As such, when purchasing by way of a corporation the client must be advised and approve it accordingly.

V. Keeping the Transaction Smooth

If the Costa Rica closing attorney and the Costa Rica real estate agent follow the guidelines set forth above and work together during the entire closing process the closing should be smooth. We don´t like surprises at closings and neither do the parties to the transaction. By dealing with all issues up front and well in advance of closing we can address any problems that arise so that closing is limited to the exchange of funds and execution of the closing documents.

Attorney Roger Petersen is specialized in Costa Rica real estate and is fully Bi-lingual English and Spanish. As a foreigner, you will feel totally comfortable using him as a closing attorney. Roger is also the author of "The Legal Guide to Costa Rica". Feel free to contact him at roger.petersen@attyps.com

Roger is also the author of "The complete guide to Property Taxes and the New Luxury Home Tax in Costa Rica". If you purchase a property in Costa Rica, using your IRA or 401K, Roger is the expert attorney on this matter.

He also offers the following services:

Real Estate Closings
Property Title Searches
Due Diligence
Escrow Accounts
Development Planning
Residential and Commercial Leases
Title Insurance
IRA Investment Property Purchases
Purchase and Sale Agreements
Negotiations and any matter incidental to your real estate transaction in Costa Rica